Latest news with #TedWeschler
Forbes
a day ago
- Business
- Forbes
Berkshire Hathaway's Second Quarter 2025 Portfolio Moves
"The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot, and if people are yelling, 'Swing, you bum!' ignore them." – Warren Buffett in the HBO Documentary 'Becoming Warren Buffett' (2017) Berkshire Hathaway's (BRK/A, BRK/B) second-quarter 13F was filed after the market closed on August 14. This regulatory filing gives us a quarterly opportunity to observe what Warren Buffett and his investment team of Todd Combs and Ted Weschler are doing within Berkshire's publicly traded equity portfolio. Berkshire has a large stable of wholly-owned entities, but this report provides us with the details of the US publicly traded stock portion of their investments. Berkshire's second-quarter earnings report, which contains information about the extensive portfolio of wholly-owned operating companies, was released on Saturday, August 2. Berkshire Hathaway's Top Ten Holdings Berkshire's $257.5 billion investment portfolio consists of 41 companies, five more than reported for last quarter. Berkshire was a net seller of publicly traded stocks during the quarter. The top five holdings, in order of the size of holding, are Apple (AAPL), American Express (AXP), Bank of America (BAC), Coca-Cola (KO), and Chevron (CVX). The top 5 holdings account for 70% of the total portfolio. The investment portfolio remains very concentrated, with 87% of assets in the top ten holdings. Berkshire Hathaway's Portfolio By Sector Before the 2024 sales, Apple stock comprised over 50% of its publicly traded portfolio, but it remains the most significant holding at around 22%. The Berkshire portfolio was overweight technology due to its massive Apple stake, but the selling since 2024 has taken technology to an underweight. While Berkshire Hathaway had no change in its Apple (AAPL) position for the first quarter, it was trimmed again in the second quarter. Despite continued trimming of Bank of America (BAC) in the second quarter, the financial sector is the most significant overweight in the portfolio at 39% of assets. Due to its top five holdings, plus Occidental Petroleum (OXY) and Kraft Heinz (KHC), the portfolio remains considerably overweight in consumer staples and energy relative to the S&P 500. Berkshire controls 28.1% of the outstanding shares in Occidental, which, combined with Chevron, leads to a significant energy sector overweight. A deeper analysis of the probable reasons behind the Occidental purchase can be found here. Berkshire has two small holdings in the industrial sector: Heico-A (HEI/A), which was added to in the quarter, and Allegion PLC (ALLE), which was a new addition to the portfolio. Allegion provides security products, systems, and services and is based in Ireland. Within any recollection, the portfolio has had no real estate companies, but that changed in the second quarter with the purchase of Lamar Advertising-A (LAMR). Lamar is not a typical real estate company, as it owns and operates outdoor advertising. Berkshire continues to own no publicly traded utilities. However, Berkshire's wholly-owned entities include a large railroad, Burlington Northern Santa Fe (BNSF), and multiple regulated utilities and pipelines via Berkshire Hathaway Energy (BHE). Because the 13F does not include international stocks, Berkshire Hathaway initially announced the acquisition of about 5% of five Japanese trading companies at the end of August 2020. These holdings are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd., and Sumitomo Corp. According to regulatory filings in March 2025, Berkshire now has 8.5% to 9.8% ownership in these trading companies. In Buffett's 2024 annual letter, he noted that all five companies had agreed to relax the previously agreed-upon 10% ownership ceiling. At the recent annual meeting, Buffett said he 'won't give a thought' to selling them and expects Berkshire to own them for fifty years or more. Portfolio Changes In the first quarter, Berkshire requested and received confidential treatment for 'one or more holding(s)' from the Securities and Exchange Commission (SEC). Typically, this means Buffett or another investment professional is attempting to continue to add to the holding, and disclosure would likely drive the price higher. It was revealed along with the second-quarter filing that the three secret holdings were Nucor (NUE), Lennar-A (LEN), and D.R. Horton (DHI). Nucor is a steel maker. Lennar and D.R. Horton are builders of single-family homes. While single-family home sales are well off their recent peak and even 2005 levels, these homebuilders have remained profitable. There is a case that the US needs more housing stock, and our current homes are aging, which could provide a long-term opportunity, despite the short-term industry challenges of affordability and high mortgage interest rates. The UnitedHealth Group (UNH), provider of healthcare insurance, was also added to the portfolio in the second quarter. Berkshire added to its positions in Constellation Brands (STZ), Domino's Pizza (DPZ), Pool Corporation (POOL), Chevron (OXY), Lennar-B (LEN/B), and Heico-A (HEI/A). Berkshire added to its previously held position in the Lennar B-shares. Berkshire eliminated its T-Mobile (TMUS) positions. As noted previously, Berkshire reduced its positions in Apple (AAPL) and Bank of America (BAC). Charter Communications (CHTR), Liberty Media—Formula One (FWONK), and Davita (DVA) were also trimmed. Notably, the Davita sales were related to a 2024 agreement in which Davita will buy back shares quarterly from Berkshire when its stake rises above 45%. Portfolio Valuation Metrics This analysis looks at the Berkshire portfolio across a host of measures, including 12-month forward estimated: price-to-earnings (P/E), price-to-sales (P/S), return-on-equity (ROE), enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), price-to-book (P/B), dividend yield, current debt-to-EBITDA, current free cash flow yield, current operating margin, and long-term earnings-per-share growth consensus estimates. Overall, the Berkshire portfolio analysis reflects a cheaper price-to-earnings valuation than the S&P 500 while having superior returns on capital as measured by return on equity with similar debt levels. The long-term (next 3 to 5 years) consensus earnings-per-share growth rate is expected to be lower than the S&P 500. Notably, Buffett's preference for high-quality companies that generate significant cash flows is evident from the superior return on equity combined with an exceptional free cash flow yield. Summary Berkshire was a net seller of $3 billion in publicly traded stocks in the second quarter, the eleventh straight quarter of Berkshire Hathaway's net sales of stocks. Berkshire bought $3.9 billion of stocks while selling $6.9 billion. Driven by earnings and continued stock sales, Berkshire has amassed a massive cash pile on an absolute basis and relative to the company's size. Buffett and his associates have been unable to find enough attractive acquisition targets in his circle of competence and at a valuation he is willing to pay. At the annual meeting, Buffett said that Berkshire 'holds a lot more cash and Treasury bills than I would like.' He always looks for investments, but 'things don't come along in an orderly fashion.' Berkshire's price-to-book ratio remained elevated during the second quarter, so share repurchases were suspended. Berkshire only intends to repurchase shares when the 'repurchase price is below Berkshire's intrinsic value, conservatively determined.' The price-to-book ratio remains a reasonable proxy for gauging Berkshire's intrinsic value. The stock repurchases in the first quarter of 2024 were likely done at around 1.4-1.5 times book value. Berkshire's stock reached almost 1.8 times book in May 2025, so a lack of repurchases in the quarter wasn't unexpected. Despite the lack of enough compelling publicly traded stock opportunities, following the decline in its own shares, Berkshire's valuation is nearing a level where repurchases might restart. Share repurchases of Berkshire stock had been off the table at the elevated valuations, but an additional lever for Buffett to create value might soon return.
Yahoo
a day ago
- Business
- Yahoo
UnitedHealth Group shares climb as Buffett's Berkshire Hathaway discloses stake in the insurer
Shares of UnitedHealth Group are surging before the market open Friday as Warren Buffett's Berkshire Hathaway disclosed that it recently purchased shares of the beleaguered insurer. Berkshire Hathaway bought around 5 million shares of UnitedHealth last quarter, according to a regulatory filing. The stake was valued at about $1.57 billion. Buffett plans to retire as CEO at the end of the year after six decades of building Berkshire Hathaway. Many investors comb through Berkshire's filings every quarter because they like to follow Buffett's moves. The filing doesn't make clear who at Berkshire handled the investment. Besides Buffett, Ted Weschler and Todd Combs also pick stocks, but they generally handle smaller portfolios and Combs also serves as Geico's CEO. Besides stocks, Berkshire owns dozens of companies in a variety of industries including Geico insurance, BNSF railroad, several major utilities and an assortment of manufacturing and retail companies. The Omaha, Nebraska-based company's holdings include many well-known brands like See's Candy and Dairy Queen. UnitedHealth has been dealing with a series of difficulties. Last month the company said that it was cooperating with federal criminal and civil investigations involving its market-leading Medicare business. The health care giant said at the time that it had contacted the Department of Justice after reviewing media reports about investigations into certain elements of its business. Earlier this year, The Wall Street Journal said federal officials had launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for its Medicare Advantage, or MA, plans. Those are privately run versions of the government's Medicare coverage program mostly for people ages 65 and over. The company's UnitedHealthcare business covers more than 8 million people as the nation's largest provider of Medicare Advantage plans. The business has been under pressure in recent quarters due to rising care use and rate cuts. The Journal said in February, citing anonymous sources, that the probe focused on billing practices in recent months. The paper has since said that a federal criminal health care-fraud unit was investigating how the company used doctors and nurses to gather diagnoses that bolster payments. UnitedHealth Group Inc. runs one of the nation's largest health insurance and pharmacy benefits management businesses. It also operates a growing Optum business that provides care and technology support. UnitedHealth's stock has mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company's annual investor meeting. A suspect, Luigi Mangione, has been charged in connection with the shooting. In April, shares plunged some more after the company cut its forecast due to a spike in health care use. A month later, former CEO Andrew Witty resigned, and the company withdrew its forecast entirely, saying that medical costs from new Medicare Advantage members were higher than expected. UnitedHealth's stock jumped more than 12% in premarket trading on Friday. Still, the stock has lost roughly half its value in the past year. 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
Associated Press
a day ago
- Business
- Associated Press
UnitedHealth Group shares climb as Buffett's Berkshire Hathaway discloses stake in the insurer
Shares of UnitedHealth Group are surging before the market open Friday as Warren Buffett's Berkshire Hathaway disclosed that it recently purchased shares of the beleaguered insurer. Berkshire Hathaway bought around 5 million shares of UnitedHealth last quarter, according to a regulatory filing. The stake was valued at about $1.57 billion. Buffett plans to retire as CEO at the end of the year after six decades of building Berkshire Hathaway. Many investors comb through Berkshire's filings every quarter because they like to follow Buffett's moves. The filing doesn't make clear who at Berkshire handled the investment. Besides Buffett, Ted Weschler and Todd Combs also pick stocks, but they generally handle smaller portfolios and Combs also serves as Geico's CEO. Besides stocks, Berkshire owns dozens of companies in a variety of industries including Geico insurance, BNSF railroad, several major utilities and an assortment of manufacturing and retail companies. The Omaha, Nebraska-based company's holdings include many well-known brands like See's Candy and Dairy Queen. UnitedHealth has been dealing with a series of difficulties. Last month the company said that it was cooperating with federal criminal and civil investigations involving its market-leading Medicare business. The health care giant said at the time that it had contacted the Department of Justice after reviewing media reports about investigations into certain elements of its business. Earlier this year, The Wall Street Journal said federal officials had launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for its Medicare Advantage, or MA, plans. Those are privately run versions of the government's Medicare coverage program mostly for people ages 65 and over. The company's UnitedHealthcare business covers more than 8 million people as the nation's largest provider of Medicare Advantage plans. The business has been under pressure in recent quarters due to rising care use and rate cuts. The Journal said in February, citing anonymous sources, that the probe focused on billing practices in recent months. The paper has since said that a federal criminal health care-fraud unit was investigating how the company used doctors and nurses to gather diagnoses that bolster payments. UnitedHealth Group Inc. runs one of the nation's largest health insurance and pharmacy benefits management businesses. It also operates a growing Optum business that provides care and technology support. UnitedHealth's stock has mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company's annual investor meeting. A suspect, Luigi Mangione, has been charged in connection with the shooting. In April, shares plunged some more after the company cut its forecast due to a spike in health care use. A month later, former CEO Andrew Witty resigned, and the company withdrew its forecast entirely, saying that medical costs from new Medicare Advantage members were higher than expected. UnitedHealth's stock jumped more than 12% in premarket trading on Friday. Still, the stock has lost roughly half its value in the past year.
Yahoo
17-06-2025
- Business
- Yahoo
Berkshire Sells Major Healthcare Holding After 10+ Years
Berkshire Hathaway Inc. (NYSE:BRK-B) is among the 11 Best Financial Services Stocks to Buy Right Now. It has restarted sales of DaVita, selling 200,010 shares between May 22 and May 27, 2025. A team of insurance professionals in a boardroom overlooking a city skyline. The deal comes after Berkshire Hathaway Inc. (NYSE:BRK-B) made a $116 million sale of 750,000 shares in February. Despite the sales, the firm still has 35.14 million shares in DaVita, making it the company's largest institutional investor. The healthcare stock, which it originally purchased in 2011, is still the conglomerate's tenth-largest position. The new disposal comes after DaVita's share price skyrocketed, quadrupling since 2011, while the company's operational difficulties grew. Ted Weschler, the portfolio manager, is believed to have spearheaded the purchase because he valued DaVita's effectiveness and shareholder-friendly approach. Berkshire Hathaway Inc. (NYSE:BRK-B) is a holding company with numerous subsidiaries engaged in various operations. The company's primary business is insurance, which is mostly handled by Geico, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group. It is among the best financial stocks. While we acknowledge the potential of BRK-B as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025. Disclosure. None.
Yahoo
17-06-2025
- Business
- Yahoo
Berkshire Sells Major Healthcare Holding After 10+ Years
Berkshire Hathaway Inc. (NYSE:BRK-B) is among the 11 Best Financial Services Stocks to Buy Right Now. It has restarted sales of DaVita, selling 200,010 shares between May 22 and May 27, 2025. A team of insurance professionals in a boardroom overlooking a city skyline. The deal comes after Berkshire Hathaway Inc. (NYSE:BRK-B) made a $116 million sale of 750,000 shares in February. Despite the sales, the firm still has 35.14 million shares in DaVita, making it the company's largest institutional investor. The healthcare stock, which it originally purchased in 2011, is still the conglomerate's tenth-largest position. The new disposal comes after DaVita's share price skyrocketed, quadrupling since 2011, while the company's operational difficulties grew. Ted Weschler, the portfolio manager, is believed to have spearheaded the purchase because he valued DaVita's effectiveness and shareholder-friendly approach. Berkshire Hathaway Inc. (NYSE:BRK-B) is a holding company with numerous subsidiaries engaged in various operations. The company's primary business is insurance, which is mostly handled by Geico, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group. It is among the best financial stocks. While we acknowledge the potential of BRK-B as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025. Disclosure. None.
