Now we know Warren Buffett's $1.8 billion secret
Investors have been on tenterhooks since May, when a 13F filing revealed that Warren Buffett's Berkshire Hathaway had been buying mystery stocks. Now, at last, we know what they are.
From time to time, prominent investors seek permission from regulators to withhold certain details of their trading activity — a move that allows them to quietly build large positions.
If you're Warren Buffett, people tend to follow your lead. And if they were to catch even a whiff that you're building a large stake in a company, copycat traders could spark a premature price spike and make your purchase more expensive.
Berkshire's assets may be worth over $1 trillion, but Buffett still likes a good bargain.
Since that May filing, his mystery bet has been the talk of Wall Street.
Could it be FedEx? UPS? Caterpillar? I bet it's Caterpillar.
Buffett's headline move last quarter was a $1.6 billion bet on an industry that is home to something he once described as "the tapeworm of American economic competitiveness." He bought more than 5 million shares in UnitedHealth.
UnitedHealth's stock had plummeted since its CEO, Brian Thompson, was fatally shot in December. Along with other major US health insurers, the company has also been grappling with an unexpected rise in medical costs. In April, it missed profit forecasts for the first time in over a decade.
Few saw Berkshire's move coming. Perhaps there were signs only the "Oracle of Omaha" could read. One thing's for sure, he practises what he preaches: "Be fearful when others are greedy, and be greedy when others are fearful."
And, as usual, when Buffett makes a move, the market moves with him. UnitedHealth shares are up nearly 13% in premarket trading.
Oh, and UnitedHealth wasn't the secret stock.
This isn't just any old filing; this is Berkshire's filing. Investors pick at it, pore over it, and pull it apart. It's a map of how one of the world's most disciplined investors is navigating a world of economic uncertainty.
The wait is over. Drum roll, please ...
The secret stocks were steelmaker Nucor and homebuilders D.R. Horton and Lennar. These are companies tied to real assets like housing and infrastructure. Less hype, more resilience. At the end of June, Berkshire's stakes were worth a combined $1.8 billion.
These may be among Buffett's final moves as CEO before he steps down at the end of the year. Approaching 95, he seems to be positioning Berkshire for the long term. For the 11th straight quarter, the firm was a net seller. While it built some positions, it pruned others — including its crown jewel, Apple.
Berkshire is still building up its war chest to weather what's ahead, but it sees pockets of value worth acting on now.
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