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Forbes
3 days 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
3 days 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
3 days 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.
Globe and Mail
09-06-2025
- Business
- Globe and Mail
3 Reasons Warren Buffett Wouldn't Touch Palantir Stock With a 10-Foot Pole
What's the hottest mega-cap stock on the market right now? Palantir Technologies (NASDAQ: PLTR). Shares of the artificial intelligence (AI)-powered software provider have skyrocketed more than 70% year to date. No other stock with a market cap of at least $200 billion has delivered anywhere close to that gain. While many investors have hopped aboard the Palantir bandwagon, Warren Buffett isn't one of them. Don't expect the multi-billionaire to become a fan of the stock anytime soon, either. Here are three reasons why Buffett wouldn't touch Palantir stock with a 10-foot pole. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » 1. Palantir isn't in Buffett's wheelhouse I seriously doubt that Buffett has even looked at Palantir's financials. Why? The company's business isn't in Buffett's wheelhouse. The legendary investor was asked at Berkshire Hathaway 's annual shareholder meeting last month if he anticipated being able to put the conglomerate's hefty cash stockpile to use soon. Buffett replied that he'd be willing to invest $100 billion in a company if it met several criteria. First on the list was that he understands the business. Granted, Berkshire's portfolio has included software companies in the past. Snowflake is a great example. However, CNBC noted shortly after Berkshire invested $800 million in the AI cloud software provider, "It's widely speculated that Buffett lieutenants Todd Combs and Ted Weschler orchestrated the Snowflake bet." I think it's a safe bet that this take is correct. Buffett has readily acknowledged that he doesn't understand AI. I suspect Palantir's AI-focused business is enough reason by itself for the legendary investor to avoid buying any shares. 2. Buffett couldn't reasonably estimate Palantir's earnings growth Let's suppose, though, that Buffett didn't shy away from investing in Palantir because of its business. I still don't think he would buy the stock for another critical reason: He couldn't reasonably estimate the company's long-term earnings growth. Buffett wrote to Berkshire Hathaway shareholders in 2014 that his first step in evaluating a stock (or business) he's considering buying is to try to estimate its future earnings for at least the next five years. He stated, "If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects." I seriously doubt that Buffett would be able to project Palantir's earnings growth because so much of the company's business stems from U.S. government contracts. How much federal money Palantir might receive depends in large part on which way the political winds are blowing over the next few years. Buffett's nickname is the "Oracle of Omaha," but even he probably wouldn't try to predict what will happen in Washington, D.C. 3. Buffett would find Palantir's valuation shocking Buffett studied under Benjamin Graham, who is widely recognized as "the father of value investing." Although Buffett isn't as much a purist value investor now as he was in the past, he still looks closely at stock valuations before investing. I'd bet that Buffett would find Palantir's valuation shocking. Actually, I think many investors would find it shocking. We're talking about a stock that trades at roughly 103.9 times trailing 12-month sales and more than 238 times forward earnings. The only way those metrics would be justifiable is if Palantir were generating truly spectacular growth. To be sure, the company is growing rapidly -- 39% year over year in the first quarter of 2025. But is this growth rate sustainable? Probably not. Palantir's own revenue guidance for full-year 2025 reflects expected somewhat slower growth of around 36%. The consensus Wall Street estimate is for even more of a slowdown in revenue growth next year. Could I be wrong that Buffett wouldn't touch Palantir stock with a 10-foot pole? Maybe. But with the AI software company's stratospheric valuation, I'd be comfortable making it a 20-foot pole. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies 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 $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%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 June 2, 2025
Forbes
16-05-2025
- Business
- Forbes
Berkshire Hathaway's First Quarter 2025 Portfolio Moves
Warren Buffett's Berkshire Hathaway added one new stock to its portfolio and added to a few more ... More recent new purchases. On the other hand, he continued to reduce his bank holdings. (Photo by: David A. Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images) You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long, dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing. – Warren Buffett in 'Supermoney' (1972) Berkshire Hathaway's (BRK/A, BRK/B) fourth-quarter 13F was filed after the market closed on May 15. 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 U.S. publicly traded stock portion of their investments. Berkshire's first-quarter earnings report, which contains information about the extensive portfolio of wholly-owned operating companies, was released on Saturday, May 3. The annual meeting was held on the same day, with further discussion about Berkshire Hathaway's operations and the momentous announcement of Buffett's retirement as CEO at the end of the year. Berkshire's $258.7 billion investment portfolio consists of 36 companies, down two from 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), Coca-Cola (KO), Bank of America (BAC), and Chevron (CVX). The top 5 holdings account for almost 71% of the total portfolio, down from 76% in the first quarter of 2024. The investment portfolio remains very concentrated, with 89% of assets in the top ten holdings. Percent Of Berkshire Hathaway 13F Portfolio - 1Q 2025 Before the 2024 sales, Apple stock comprised over 50% of its publicly traded portfolio, but it remains the most significant holding at around 26%. The Berkshire portfolio was overweight technology due to its massive Apple stake, but the selling in 2024 has taken technology to a slight underweight. Berkshire Hathaway had no change in the Apple (AAPL) position for the first quarter. Despite the elimination of Citigroup (C) and Nu Holdings (NU) and the trimming of Bank of America (BAC) and Capital One Financial (COF), the financial sector is the most significant overweight in the portfolio at almost 40% 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 almost 27% 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 only one small holding in the industrial sector and no real estate companies or 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). Berkshire Hathaway 13F Portfolio By Sector 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. Berkshire added a new secret holding. It 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 is likely one new stock since the value is estimated at $1 to $2 billion when comparing the 13F filing with earlier first-quarter earnings disclosures via the 10Q filing. Berkshire added to its positions in Constellation Brands (STZ), Domino's Pizza (DPZ), Pool Corporation (POOL), Occidental Petroleum (OXY), Verisign (VRSN), Sirius XM Holdings (SIRI), and Heico-A (HEI/A). Within financials, Berkshire jettisoned its Citigroup (C) and NU Holdings (NU) positions, while continuing to trim its Capital One Financial (COF) and Bank of America (BAC) shares. Warren Buffett is regarded as one of the greatest bank stock investors ever. Hence, the continued reduction in exposure to the banking sector is notable, but almost 40% of the stock portfolio remains in financial companies. Berkshire also reduced its positions in T-Mobile (TMUS), Charter Communications (CHTR), Liberty Media—Formula One (FWONK), and Davita (DVA). 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%. 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. Berkshire Hathaway 13F Portfolio - Valuation Measures 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. 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. Berkshire Hathaway: Cash Berkshire was a net seller of stocks in its portfolio for the tenth quarter in a row, with relatively modest net sales of $1.5 billion in publicly traded stocks. Driven by earnings and continued stock sales, Berkshire has amassed a record cash level on an absolute basis and relative to the company's size. Buffett and company 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.'
