Berkshire Hathaway's mystery stock could be revealed Thursday. Filings offer clues.

Mint

a day ago

Berkshire Hathaway's latest mystery-stock investment could be revealed on Thursday.
There is a good chance it is an industrial company. And the total size of the holding could be almost $5 billion, based on clues in the conglomerate's 10-Q reports for the first and second quarters.
Berkshire also could disclose that it made further sales of Bank of America stock in the second quarter. It reduced the size of that holding by almost 40% to 631 million shares, now worth around $28 billion, from July 2024 through the first quarter.
The disclosures are expected because the 45-day deadline for the company to disclose its U.S.-listed equity holdings as of June 30, via a Form 13-F with the Securities and Exchange Commission, is on Thursday. Berkshire normally waits until the final possible day to make its filing.
In mid May, when Berkshire reported its equity holdings as of March 31, it disclosed that it requested confidentiality on one or more holdings that it accumulated in the first quarter. At the time, Barron's speculated that the new equity holding—we are assuming it is just one stock—was an industrial stock based on information in the first-quarter 10-Q.
The mystery stock could be the highlight of the new 13-F report. Berkshire was a light buyer of stocks in the second quarter, purchasing nearly $4 billion, while selling about $7 billion, indicating it continued to pare its equity portfolio, based on information in the 10-Q for the period.
In its 10-Q filings, Berkshire discloses its top five stockholdings–Apple, American Express, Coca-Cola, Chevron and Bank of America–as well as sizable investments in Kraft Heinz and Occidental Petroleum. But it doesn't disclose smaller equity investments.
Instead, it divides its nearly $300 billion of equity holdings into three buckets: financial, consumer, and a broad category called 'commercial, industrial and other." In the first quarter, the commercial and industry cost basis rose by nearly $2 billion, but the May 13-F disclosure didn't include any notable purchases in that category for that period.
In the second quarter, the cost basis in the commercial and industrial category rose by $2.8 billion. Together, the two increases in the cost basis suggest the total mystery stock purchase could be as much as $4.8 billion.
Berkshire CEO Warren Buffett periodically has requested confidentiality from the SEC when the company is building a position in a stock over more than one quarter and doesn't want to tip off other investors about the company's identity. Such a disclosure might boost the stock price and make it more expensive for Berkshire to buy. Many investors follow Berkshire and the disclosure of a new equity holding typically results in a rise in its stock price.
It's possible that Berkshire might seek a second quarter of confidential treatment for the mystery stock, as it did when it was accumulating shares of the insurer Chubb in late 2023 and early 2024. The Chubb holding totaled about $7 billion when disclosed in May 2024.
Chubb was the most recent Berkshire mystery stock. Berkshire also sought confidential treatment when it was buying Chevron and Verizon Communications shares in late 2020 and early 2021.
Other clues in the second-quarter 10-Q report indicate Berkshire may have continued to pare its Bank of America investment. Details pointing to the size of Berkshire's realized equity gains in the period are a sign that Berkshire might have sold another $4 billion or so of Bank of America in the second quarter, Barron's estimates.