warren buffett

Berkshire Hathaway (NYSE: BRK.B), which is led by the legendary value investor Warren Buffett, has released its 13F for the second quarter of 2022. It was a muted quarter for the company and there were no major surprises in the filling.

Berkshire Hathaway net bought $3.8 billion worth of stocks in the second quarter. While it is the second consecutive quarter when the conglomerate was a net buyer of stocks, the volumes were quite lower as compared to the first quarter when the company net bought $41 billion worth of stocks.

Notably, Berkshire was a net seller of stocks in five quarters before Q1 2022 and Buffett spent almost $50 billion on share buybacks between 2020 and 2021 amid a lack of investment opportunities. After spending billions on buying stocks in 2022, Buffett has gone slow on repurchases and the company repurchased $3.2 billion of its shares in the first quarter and $1 billion in the second quarter.

Looking at Berkshire’s second quarter 13F, it exited Verizon and Royalty Pharma in the quarter. While Verizon was a long-time holding, Royalty Pharma was a new purchase. Buffett invested in several pharma companies including Merck and Pfizer in 2020 but has since sold most shares. While the “Oracle of Omaha” is known to be a long-term investor, he has exited several stocks within a short span over the last three years.

Among other stock sells, Buffett trimmed stakes in Store Capital, Kroger, and General Motors. Berkshire was buying Kroger until 2021 but sold shares in the first quarter of 2022. There has been a slowdown in retail spending in the US amid rising inflation and a slowing economy. However, the fiscal Q2 2023 earnings of Walmart showed that things are not as bad as feared. Walmart stock is trading higher today after the earnings beat.

Warren Buffett Buys More Apple Stock

Apple is by far the largest holding for Berkshire Hathaway and Buffett has praised the company on multiple occasions. Buffett bought $600 million worth of Apple shares in the first quarter of 2022, which was his first purchase of the iPhone maker since the third quarter of 2018.

Buffett bought 3.9 million shares of Apple in Q2 2022 which took the total stake to 895 million. Berkshire is the second-largest stockholder in Apple, the world’s largest company by market cap.

Buffett, who mostly stays away from tech stocks, sees Apple as a consumer product company and has appreciated its products as well as its leadership. Apple is the best-performing FAANG stock of 2022 and has almost recouped all of its 2022 losses.

The company posted better than expected in the June quarter. It posted revenues of $83 billion which were 2% higher than the corresponding period last year and ahead of the $82.81 billion that analysts were expecting. It was a new June quarter record for the company, despite currency headwinds and the exit from Russia.

Wall Street Analysts Are Also Bullish on Apple Stock

While Apple did not provide quantitative guidance for the current quarter, it did provide some color and said, “Overall, we believe our year-over-year revenue growth will accelerate during the September quarter compared to the June quarter despite approximately 600 basis points of negative year-over-year impact from foreign exchange.”

Wall Street analysts were also impressed with the company’s earnings. While Goldman Sachs reiterated the stock as neutral, Morgan Stanley reiterated the stock as overweight and advised investors to buy Apple stock. Morgan Stanley termed Apple as “resilient” and said that it remains its top pick while maintaining its $180 target price.

Buffett Adds More Ally Financial Shares

Berkshire also added more shares of Paramount Global Occidental Petroleum, Chevron, Celgene, and Ally Financial in the quarter. Buffett had financed Occidental’s acquisition of Anadarko and invested in its preferred shares that had warrants attached. Berkshire now has a nearly 30% stake in Occidental after accounting for the warrants.

The Occidental investment is paying off well for Buffett as the stock has soared this year. While it is off its 2022 highs after the crash in oil prices, it is still up significantly for the year. Wall Street analysts are quite divided over the outlook for oil prices. While some like JPMorgan see them moving higher, Citi has forecast that oil prices would fall more from these levels.

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