Warren Buffett’s investment company, Berkshire Hathaway, has made significant changes to its portfolio in recent months. SEC filings show that from October 2022 to June 2024, Berkshire sold about $132 billion more in stocks than it bought. One of the most notable changes was the reduction in Berkshire’s stake in Apple.
Over a three-quarter period, Berkshire’s holding in Apple declined by more than 515 million shares, or 56%, to 400 million shares. Buffett has praised Apple’s strong branding and customer loyalty, but the company’s growth has stalled, especially in sales of its physical devices over the past two years. Instead, Buffett and his team have turned their attention to Sirius XM Holdings, a satellite-radio operator that completed a reverse stock split this year.
Sirius XM merged with Liberty Media’s Sirius XM tracking stock, consolidating its shares and completing a 1-for-10 reverse split, lifting its share price from the mid-$2s to the mid-$20s.
Berkshire’s shift to Sirius XM
Berkshire Hathaway now holds over 110 million shares, almost a third of Sirius XM’s outstanding shares.
Buffett appreciates Sirius XM’s unique market position as the only licensed satellite-radio company, affording it a legal moat and significant pricing power. The company derives 77% of its net sales from subscriptions, making its revenue streams more predictable than those reliant on advertising. Sirius XM’s cost advantages and relatively static operational expenses could lead to margin expansion if the company grows its subscriber base.
Additionally, Sirius XM shares offer a compelling value proposition, trading at 8 times forward-year EPS with a nearly 4% dividend yield. As the stock market remains historically pricey, Sirius XM stands out to Buffett as a solid investment in a sea of expensive stocks. Berkshire Hathaway’s recent moves suggest that Buffett is positioning his portfolio for potential market turbulence while seeking value in underappreciated companies like Sirius XM.
