Sold out of our entire Apple position as tariffs are no-win scenario, says Clockwise's James Cakmak
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2 minutes ago
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After Sitting on the Sidelines For 14 Months, Warren Buffett Could Be Buying One of His Favorite Stocks Again
Key Points Warren Buffett has been a net seller of stocks in each of the last 11 quarters. While he doesn't time the market, Buffett won't buy stocks if they don't trade below his estimate of intrinsic value. This stock's price has come down from its all-time high while its financials improve, making it a more appealing value right now. 10 stocks we like better than Berkshire Hathaway › Warren Buffett hasn't seen a lot to like in the stock market recently. In fact, he and his team of investment managers at Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) have been net sellers of stocks for 11 straight quarters. Buffett's stock sales have accelerated over the past five quarters. That includes monster sales of Berkshire's stakes in Apple and Bank of America. In the meantime, he's stopped buying one stock investors had seen him buy consistently each quarter since mid-2018. As a result, Berkshire's cash pile has climbed to a whopping $344 billion. But the market may be offering Buffett an opportunity to start buying his favorite stock again, and investors should consider doing the same. Buffett isn't timing the market Buffett's big stock sales over the last few years and his lack of purchases may be seen by some as the Oracle of Omaha trying to predict the future and time the market. While it might look like market timing, Buffett is merely sticking to what's worked for him as an investor for the last 60 years or so. "We try to price, rather than time, purchases," Buffett wrote in his 1994 letter to shareholders. The same could be said of Berkshire's stock sales. If the market is offering a massive premium on one of Berkshire's holdings, Buffett ought to sell it, pocket the cash, and look for opportunities in stocks trading well below their intrinsic value. That could even include buying Berkshire Hathaway shares themselves. In fact, the board of directors updated its share repurchase policy in 2018, allowing Buffett to buy back shares of the company as long as it traded below its intrinsic value, conservatively determined. Buffett quickly went to work buying back shares following that change, indicating that the stock looked like a bargain. Between 2018 and May 2024, Buffett spent $78 billion buying back shares of Berkshire Hathaway. Over the last 14 months, however, Buffett hasn't spent a single dollar buying back the stock based on Berkshire's quarterly earnings reports. He holds himself to the same high standards he expects of the CEOs of all the companies Berkshire invests in. "All stock repurchases should be price-dependent. What is sensible at a discount to business-value becomes stupid if done at a premium," he wrote in his 2023 letter to shareholders. But Berkshire shares have fallen considerably since Buffett announced he would step down as CEO at the end of the year during the company's annual meeting in May. And after a further sell-off sparked by its second-quarter earnings report, shares are starting to look a lot more appealing. That could open the door for Buffett to start buying back Berkshire's stock. Will Buffett start buying again? Berkshire Hathaway's earnings disappointed many investors, leading the market to sell off the stock. After a stellar 2024, the insurance business is back to more normalized operations, including big payouts earlier this year due to the California wildfires. That's led to a drop in underwriting profits, which pushed the conglomerate's total operating earnings down nearly 4% last quarter. It's worth noting, however, that Berkshire faced significant foreign exchange headwinds last quarter, which negatively affected operating earnings. Berkshire also wrote down its Kraft Heinz investment by $5 billion. That follows a $3 billion impairment charge it took in 2019. That further negatively affected reported earnings. Nonetheless, Buffett has seen the book value per share of Berkshire Hathaway climb, including a 2.1% gain from the first quarter, and a 10.9% increase from a year ago. Combined with the declining stock price over the last three months, Berkshire Hathaway shares now trade for a price-to-book ratio of about 1.5. That's an important valuation, because when Buffett last repurchased shares of Berkshire, the stock traded below that valuation. The stock has rarely dipped below that price since last May. But shares are certainly more attractive after the sell-off. A couple of factors could keep Buffett from buying at the current price. First, Berkshire's marketable equity portfolio is a significant factor in its book value. Buffett may still see most of the stocks in the portfolio as overpriced, especially as stocks continued to climb over the past year. That would push him to require a lower multiple for Berkshire stock, since repurchasing Berkshire shares would also mean purchasing a small piece of its equity portfolio. The other factor is that he may want to use a significant chunk of cash to bolster the railroad business in the near future. Union Pacific and Norfolk Southern have agreed to a merger, threatening the competitiveness of Berkshire's Burlington Northern Santa Fe. When you consider the strength of Berkshire's balance sheet and that it's not relying on insurance float for any capital at this point, it should trade for a higher price-to-book value ratio than it has historically. With shares trading around 1.5 times book value, the stock finally looks to be trading near its intrinsic value again, making it worth buying. Should you buy stock in Berkshire Hathaway right now? Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Bank of America is an advertising partner of Motley Fool Money. Adam Levy has positions in Apple and Union Pacific. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends Kraft Heinz and Union Pacific. The Motley Fool has a disclosure policy. After Sitting on the Sidelines For 14 Months, Warren Buffett Could Be Buying One of His Favorite Stocks Again was originally published by The Motley Fool
Yahoo
25 minutes ago
- Yahoo
Here Are 3 Bullish Reasons Why JPMorgan Sees S&P 500 Rallying Much Higher
JPMorgan remains bullish on U.S. stocks even as some observers warn that the economy is beginning to pay the price for President Donald Trump's tariffs. The investment banking giant forecasts that the S&P 500, Wall Street's benchmark index, will yield a "high single-digit return over the next 12 months," driven by three key factors. One of the main reasons for optimism is that markets don't care about signs of an economic slowdown. Instead, traders are focused on resilient corporate earnings and the subsequent economic recovery. Since President Trump fired the first tariff salvo on April 2, economists have downgraded full-year U.S. growth forecasts from 2.3% to 1.5%. Still, the S&P 500 has gained over 28% in the four months. The index has held steady despite recent economic data revealing softness in the labour market and consumption, as well as stickiness in manufacturing and service sector inflation. While the macro analysts' warning is concerning and likely playing out in the background, corporate earnings in the U.S. are ignoring the slowdown risks, at least in the short term, making it the second catalyst for JPMorgan's bullish thesis. Over 80% of S&P 500 companies have recently reported their Q2 earnings, with 82% surpassing earnings expectations and 79% beating revenue forecasts—the strongest performance since the second quarter of 2021. The winners and losers According to JPMorgan, while Wall Street analysts initially projected earnings growth below 5%, the index is now on pace for an impressive 11% growth rate. This robust showing supports the ongoing bullish trend in the stock market. "The full-year earnings expectations for both this year and next have already started to turn higher," analysts at JPMorgan's wealth management said in a market note on Friday, adding that the market is increasingly differentiating between the winners and losers of the Trump trade war. Additionally, the market is now figuring out and pricing in which companies are getting hit most by U.S. tariffs. So far, it looks like mega corporations will be just fine. This could bolster the case for further positive sentiment in the markets. JPMorgan analysts explained that consumer-facing and smaller companies with restrained bargaining power against their trading partners and rigid supply chains are facing a stagnant earnings outlook. This ties to JPMorgan's last catalyst: Trump's tariff bark is proving worse than its bite for large firms, which are managing to secure exemptions and even turn the tariff policies, aimed at sparking a manufacturing boom, into a tailwind. "The latest example is President Donald Trump's suggestion that imported semiconductors would be taxed at a 100% rate unless the companies commit to relocating production to the United States. Another sign? Apple products are exempted from the latest tariff rates on Indian goods. Indeed, the company also announced an additional $100 billion investment in U.S. manufacturing facilities. The stock gained almost 9% this week. Tariffs are not happening in a vacuum," analysts explained. Big firms gain an additional advantage from the One Big Beautiful Act (OBBA), under which firms can claim 100% bonus depreciation for purchases of qualified business property and immediate expense of domestic research and development costs. According to some analysts, the depreciation policy could increase free cash flow for some by over 30%, which could incentivize more investment. The bank added that its investment strategy remains focused on large-cap equities, particularly in the technology, financials, and utilities sectors, which it believes are best positioned to navigate this new economic environment. The crypto angle JPMorgan's positive outlook for stocks could bode well for cryptocurrencies, as both tend to move in tandem. The digital assets market has plenty going on for itself, with the Trump administration appointing pro-crypto officials to key regulatory positions. Recently, the U.S. Securities and Exchange Commission (SEC) ruled that liquid staking, under certain conditions, falls outside the purview of Securities Law. The ruling has raised hopes for staking spot ether ETFs winning regulatory approval. Ether has rallied over 13% to over $4,200, reaching levels last seen in 2021. Prices surged nearly 50% last month, CoinDesk data show. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25 minutes ago
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Is Apple Still a Smart Investment After Its Surge?
After a sharp 12% rally in just five trading days, the Apple stock is still down nearly 6% year-to-date. The question now is whether Apple's underlying strengths are enough to sustain this momentum and drive its share price higher. Let's take a closer look: From Asia to America: Inside Apple's Shift Amid Tariff Pressure The Trump administration has escalated its push for American technology manufacturing, announcing a plan to impose roughly 100% tariffs on all semiconductor chips imported into the United States. However, tech companies committing to domestic production will be exempt — a significant reprieve for Apple and other electronics manufacturers that have long relied on global supply chains. For years, Apple's assembly lines and component sourcing have been concentrated in China, India, and Vietnam. The administration is unequivocally warning that companies must reshore production or be subjected to steep new trade barriers. The political backdrop is also shifting, with Trump recently increasing tariffs on India — a country where Apple assembles most of the iPhones sold in the U.S. In response, Apple has pledged to dramatically scale up its U.S. presence, committing $600 billion in domestic investment over the next four years. This $100 billion plan builds on an earlier $500 billion commitment made earlier this year. Central to the initiative is a new American Manufacturing Program, aimed at fostering the repatriation of production by Apple's suppliers and partners. Apple anticipates this program will directly result in 20,000 new jobs and indirectly support additional employment throughout its extended supply network. CEO Tim Cook underscored Apple's commitment, stating, 'We're going to keep making investments right here in America, keep hiring in America, and keep building technologies at the heart of our products right here in America because we're a proud American company, and we believe deeply in the promise of this great nation.' Part of Apple's plan is to create a U.S.-based chip supply chain. The company expects to produce more than 19 billion chips in 2025, manufactured across 24 factories in 12 states. This is a strategic move to secure critical components against future trade shocks and aligns with Washington's push for semiconductor independence. Apple plans to expand its U.S. manufacturing effort with companies like Corning, Texas Instruments, and Amkor Technology among others. However, the challenges are considerable. Industry experts warn that large-scale electronics assembly in the U.S. is hindered by higher labor costs, a shortage of skilled manufacturing workers, and the fact that many key suppliers remain in Asia. Fully assembling iPhones in the United States is unlikely in the near term. Instead, Apple will focus on manufacturing high-value components domestically while continuing to assemble final products overseas — a compromise the Trump administration appears to accept for now. Despite the hurdles, Apple's exemption from Trump's reciprocal tariffs — including the newly announced 25% levy on Indian imports — shields the company's most important product line from immediate cost increases. For investors, the shift could mark the beginning of a long-term strategic repositioning, potentially strengthening Apple's political standing in Washington while reshaping its global supply network. Services Shine, iPhones Surge, but Apple's Growth Story Faces New Hurdles Apple's latest quarterly results helped cement the momentum behind its remarkable 12% share price jump over just five trading days, fueled by renewed optimism in the U.S. market. The June quarter showcased a powerful, if complex, performance story. iPhone sales surged more than 13%—their strongest growth in years—as U.S. consumers rushed to buy devices ahead of potential price hikes from looming tariffs. The introduction of a more affordable iPhone earlier this year (the iPhone 16e) added extra fuel to demand. This demand push brought quarterly revenue to $94 billion, up about 10% year-on-year, easily beating Wall Street forecasts. The tariff impact—20% on imports from China—did take a bite out of profitability, but Apple mitigated the hit by accelerating shipments from India. Gross profit margins came in above expectations, and China, a market where sales had been declining, posted a 4% revenue rebound. Beyond hardware, Apple's services segment continued to deliver solid results, growing 13% to $27.4 billion. This arm of the business, covering the App Store, iCloud, paid apps, advertising, and search royalties, has grown fivefold since 2015 and now generates gross margins above 70%, compared to around 30–40% for hardware. Bank of America analysts note that Apple's decision to break out services performance in financial reports helped investors justify paying a higher earnings multiple for the stock. Still, challenges remain. The very factors that bolstered iPhone sales this quarter—tariff fears and aggressive promotions—may not repeat. Growth in services has also moderated after its pandemic-era surge, while regulatory clouds are forming. Apple faces a potential earnings hit if Google's lucrative default-search contract in Safari is altered or removed, as well as pressure to allow alternative payment channels for apps, potentially undercutting App Store revenue. Meanwhile, the company has yet to present a convincing AI strategy that can match rivals like Microsoft and Meta, both of which are already showing tangible AI-driven revenue gains. With a new, slimmer iPhone rumored for September at a higher price point, Apple is clearly looking to support margins and sustain its growth narrative. Whether that is enough to maintain the stock's upward momentum will depend on how well it navigates its regulatory challenges and AI positioning in the months ahead. Sources: Apple, The White House, CNBC, CNN, The Wall Street Journal, ActivTrades This article was originally posted on FX Empire More From FXEMPIRE: Is Apple Still a Smart Investment After Its Surge? Navigating Uncertainty in the Crude Oil Market Eye Outliers Like Synopsys Early with Money Flows EU's Sluggish Economy Faces Moderate Growth Slowdown from US Trade Tensions Identify Winners Like Vistra Early with Money Flows Buy Like Big Money: Toast Sees First Outlier Inflows
