Warren Buffett attends the Forbes 100th Anniversary Gala at Pier Sixty in New York on Sept. 19, 2017.Andy Kropa/The Associated Press
Warren Buffett’s Berkshire Hathaway Inc. on Tuesday announced two major new investments, revealing an US$8.6-billion stake in the phone company Verizon Communications Inc. and a US$4.1-billion stake in oil company Chevron Corp.
The investments were disclosed in a regulatory filing detailing Berkshire’s U.S.-listed stock holdings as of Dec. 31.
Berkshire also disclosed a new US$499-million stake in the professional services company Marsh & McLennan Cos.
To make room, Berkshire pared its investments in several companies including Apple Inc., though at approximately US$121-billion the iPhone maker remains by far its largest common stock holding.
Verizon shares rose 3 per cent, Chevron rose 2.2 per cent and Marsh was unchanged in after-hours trading following Berkshire’s filing.
Tuesday’s filing signals where Mr. Buffett and his portfolio managers Todd Combs and Ted Weschler see value, though Mr. Buffett normally handles larger investments.
It also shows Berkshire is finding ways to deploy its cash hoard, which totalled US$145.7-billion as of Sept. 30.
The Omaha-based conglomerate owns more than 90 businesses including Geico car insurance, BNSF railroad and Dairy Queen ice cream, but has gone five years since its last big takeover, a US$32.1-billion purchase of Precision Castparts.
Berkshire had begun investing in Verizon, Chevron and Marsh by last year’s third quarter, and had won U.S. Securities and Exchange Commission permission to delay revealing the stakes.
The SEC has several times over the years let Berkshire quietly invest in companies, to avoid having investors piggyback on Mr. Buffett’s wagers and drive up the companies’ stock prices before Berkshire is done buying.
Tuesday’s filing showed Berkshire, a major investor in Bank of America Corp., cutting back on smaller banking rivals, reducing its stake in Wells Fargo & Co. and shedding JPMorgan Chase & Co., M&T Bank Corp. and PNC Financial Services Group Inc.
Berkshire also invested more in drugmakers Abbvie Inc., Bristol-Myers Squibb Co. and Merck & Co. while selling a small stake in COVID-19 vaccine-maker Pfizer Inc. It also shed mining company Barrick Gold Corp.
Doug Kass, managing partner of Seabreeze Capital Investment Inc. in Palm Beach, Fla., said the Verizon stake “makes sense” for Berkshire, reflecting the phone company’s dividend payouts and prospects for wireless revenue growth.
The lowered bank stakes may reflect Mr. Buffett’s concern about persistent low interest rates, and loan losses related to the coronavirus, Mr. Kass added.
Berkshire should provide more details on its investments when it releases year-end results and Mr. Buffett’s annual shareholder letter on Feb. 27.
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