Warren Buffett’s Berkshire Hathaway recently released its 13F filing for the second quarter, revealing the stocks the firm bought and sold during this period. While Berkshire was a significant seller of stocks, Buffett did take positions in two new names: Heico and Ulta Beauty. Heico is an aerospace and defense supplier focused on creating niche replacement parts for commercial aircraft and components for defense products.
The company is in a strong financial position, typically carrying little debt and generating significant free cash flow. However, Morningstar currently values Heico stock at $173, and shares are trading well above that level, making the stock appear overvalued. On the other hand, Ulta Beauty is the largest specialized beauty retailer in the United States.
While Ulta’s high-growth phase may be over, it continues to open new stores in the US and abroad, expand its e-commerce business, and build out shops within Target locations. These initiatives are expected to help Ulta attract new customers and increase its share of customers’ annual beauty spending. Morningstar values Ulta stock at $405, and shares are trading slightly below this estimate, making Ulta a more attractive buy than Heico.
Buffett’s aggressive accumulation of Sirius XM Holdings is one of his most significant moves. He expanded his stake from 36.68 million to 132.88 million shares, a massive vote of confidence in the satellite radio company.
Berkshire’s new stock acquisitions
His holdings were valued at $376 million at the end of the second quarter. In typical Buffett fashion, many of his core holdings remain untouched. He continues to maintain substantial positions in stalwarts like Bank of America, Coca-Cola, Kraft Heinz, American Express, Citigroup, and Moody’s.
These consistent holdings reflect his long-term confidence in these companies’ ability to generate value over time. Perhaps the most surprising moves were his complete exits from Paramount Global and Snowflake Inc. Buffett had earlier highlighted that his stake in Paramount was a rare bet that went wrong, and he admitted to selling all shares in the company for a loss.
The sell-off of Snowflake shares underscores a potential reassessment of the data warehousing company’s growth prospects. Buffett’s decision to drastically reduce his stake in Apple from 789.37 million shares to 400 million is noteworthy. Although he had disclosed part of this sale earlier, this massive trimming signals a more cautious approach toward one of his most iconic holdings.
Additionally, he reduced positions in Chevron, Capital One, Floor & Decor, Louisiana-Pacific Corporation, and T-Mobile US. Among Buffett’s recent buys, Ulta Beauty appears to be the more attractive stock based on Morningstar’s valuation, while Heico currently seems overvalued. Investors should consider these valuations and the long-term prospects of both companies before making any investment decisions.
