Warren Buffett has been a selective buyer of stocks for nearly two years.
Update: Berkshire Hathaway sold another $383 million of Bank of America (BAC) on October 3, 4 and 7 at an average price of $40.02. It has now sold 24% of its BAC stake for $10 billion since mid-July. https://t.co/qJGV3aXv3l #Buffett $BRK.A $BRK.B $BAC
— David Kass (@DrDavidKass) October 8, 2024
His latest filings reveal a pattern of net stock sales totaling close to $132 billion over the last seven quarters. Despite these sales, Buffett has selectively increased holdings in companies such as integrated energy company Occidental Petroleum and property and casualty insurer Chubb.
However, none of these holdings are Buffett’s “most beloved stock.” That title belongs to Berkshire Hathaway itself.
Berkshire Hathaway now owns 100% of BHE, but the utility giant has been a weak spot for the conglomerate https://t.co/f2jBj103qD
— David Kass (@DrDavidKass) October 7, 2024
Since July 2018, when Berkshire’s board amended its buyback policy, Buffett has been actively repurchasing shares of his own company. This amendment allowed Buffett to buy back stock as long as Berkshire had at least $30 billion in cash, cash equivalents, and U.S. Treasuries, and if Buffett believed the shares were intrinsically cheap.
Warren Buffett's Berkshire Hathaway has now dumped more than $10 billion worth of Bank of America $BAC shares pic.twitter.com/0q08At7IV6
— Barchart (@Barchart) October 8, 2024
Buffett’s most cherished investment
With Berkshire’s cash pile ballooning to an all-time record of $276.9 billion as of the end of June, Buffett has more than enough capital to continue these buybacks. Since the amendment in July 2018, Berkshire has repurchased almost $78 billion worth of its own shares.
Buffett is a significant advocate for buybacks because they incrementally increase the ownership stakes of patient investors. As the outstanding share count declines, each remaining share holds a fractionally larger stake in the company.
JUST IN 🚨: Warren Buffett Indicator hit 197%, the highest level in history, surpassing the Dot-Com Bubble and the Global Financial Crisis. pic.twitter.com/H5RpYHJtvP
— Barchart (@Barchart) October 8, 2024
For businesses with steady or growing net income, reducing the share count can make these companies fundamentally more attractive to investors.
While Buffett remains bullish on companies like Occidental Petroleum and Chubb, his largest and most beloved investment remains Berkshire Hathaway itself.
