Warren Buffett’s investment company, Berkshire Hathaway, has sold a large portion of its Apple stock. The company sold 67% of its shares in Apple over the past year. This reduced Berkshire’s stake in the tech giant by 615.56 million shares.
Buffett has been a net seller of stocks for eight quarters in a row. Berkshire Hathaway has sold $166.2 billion worth of stocks during this time. Apple is still Berkshire’s biggest holding by market value, but the company’s investment strategy seems to be changing.
Buffett said one reason for selling Apple’s stock was its high valuation. Apple’s stock is trading at 38 times its earnings over the past 12 months. This is a historically high valuation that has raised worries about Apple’s potential for future growth.
Also, sales of Apple’s physical products, such as iPhones, Macs, and iPads, have not been growing much. However, Apple’s subscription services are still doing well. While selling Apple shares, Berkshire Hathaway has made some specific purchases.
A notable buy in the third quarter was a $550 million investment in Domino’s Pizza.
Buffett shifts strategy with stock sales
This amounted to 1,277,256 shares.
Domino’s stock has performed extremely well since its IPO in 2004, rising over 7,000%. Domino’s recent plan, called “Hungry for MORE,” aims to improve how the company operates and boost customer loyalty. It plans to do this through a revised menu, its own technology, a rewards program focused on value, and enhancing brand value through franchisees.
Buffett likes companies that own their successes and failures. He appreciates Domino’s clear and effective marketing strategies seen over the past decades. Domino’s also has a strong approach that benefits shareholders.
It consistently raises its annual dividend and buys back shares. This aligns well with Berkshire’s investment philosophy. Though Domino’s forward P/E ratio of 27 suggests it isn’t a cheap stock, its steady performance and strategic plans make it an attractive addition to Berkshire’s portfolio.
Investors closely watch Warren Buffett’s strategic moves. They examine his changes for potential market trends and future investment opportunities. It will be interesting to see if Berkshire increases its stake in Domino’s in the coming quarters.
