Warren Buffett-led company Berkshire Hathaway Inc. made investments in drug, telecom, and oil companies, at the same time shedding its Apple stake by 6%. According to the U.S. Securities and Exchange Commission, Berkshire cut its Apple Inc. stakes down to 887 million shares in the last quarter.
Berkshire has also made investments in AbbVie Inc. by 20%, Bristol-Myers Squibb Company by 11%, and Merck & Co by 28%, at the same time increasing its exposure to T-Mobile US and Verizon Communications Inc. to a significant 3.5%. The Telecom giant is now making a significant 3% of Warren Buffett's portfolio.
As a result, Verizon shares closed 3.05% up last week, while Apple went down nearly 1.6% and fell even more in the after-hours session, spinning around $130. Berkshire Hathaway Inc., led by Buffett as a CEO since 1970, has provided an update to its portfolio after selling 9.81 million shares of Apple for $1.1 billion, moving their class A shares up by 1.23%, while class B shares closed up 1.15% higher.
The first acquiring of the Apple stock by Berkshire began in 2016 when they purchased the same amount of shares they sold now. Previously, in the fourth quarter of 2019, Buffett already has sold $800 million in Apple stock, keeping them in $111.7 billion value.
According to this, Warren Buffett's conglomerate portfolio consists of 43% Apple stocks, unlike the previous 48% about half a year ago. But, considering the fact that 43% is still $277 billion, and that Apple stock was worth around $130 in the fourth quarter vs. $115 at the end of the third, Berkshire's investment in Apple actually increased.
Warren Edward Buffett, son of a United States congressman, started his career when he was only 11, buying his first stock. He became known as one of the most successful investors of all times, running Berkshire Hathaway Inc, a giant conglomerate that owns more than 60 companies, while his net worth is estimated at $91.8 billion.
The businessman and philanthropist founded the Giving Pledge with Bill Gates, trying to persuade other billionaires to donate half of their wealth to charities of their choice. “First, my pledge: More than 99% of my wealth will go to philanthropy during my lifetime or at death. Measured by dollars, this commitment is large. In a comparative sense, though, many individuals give more to others every day,” said Buffett. He committed to eventually give all of his Berkshire Hathaway stock to the charity.
The rumor spread that 90-year-old Warren, known as the “Oracle of Omaha,” could even pass the CEO torch, and it is assumed to be Berkshire's vice chairman Greg Abel. Buffet could remain a chairman, supervising Berkshire's $270 billion-worth portfolio, giving the space to Abel to gain further experience in the company.
Although nothing has been confirmed so far, the billionaire continues to give hints in the annual reports. So far, Berkshire Hathaway has expanded its board and appointed Ajit Jain and Gregory Abel as vice-chairs of the board. While Ajit Jain has made more money for the company than anyone else including Buffett himself, the advantage is on the side of the 59-year-old Canadian simply because he is younger.
There is no secret -- when Warren makes a move, the market trembles. That is why Apple stock is the main finance topic of the year. According to Barron, whose stock predictions often change the market movements, Apple is still among the top investments for 2021, with plans to increase production by 30% in the first half of the year.
On the other side, there is Kiplinger, another powerhouse finance magazine which anticipation for the Apple stocks is less flattering -- according to them, the company barely made the list of the top 15 tech stocks in 2021, taking the last place. With the release of the first version of Apple's virtual reality headset, the price might be too high, resulting in sales predictions of only one per day.
Meanwhile, Apple continues to be successful in sales, delivering impressive growth results with iPad and iPhone as their bestsellers. Since it was founded in 1976, the company has grown steadily, but the main question for the Apple stockholders is whether their stocks reached their peak.
The analysts predict that the newest 5G connectivity will lead to massive iPhone 12 upgrades, as Wedbush Analyst Daniel Ives said: "With our estimation that 350 million of 950 million iPhones worldwide are currently in the window of an upgrade opportunity, we believe this will translate into an unprecedented upgrade cycle for Apple."
This indicates that the biggest factor of the further growth for sure will be the iPhone 12, including the first-ever iPhone mini, while Apple continues to be the biggest Berkshire Hathaway equity investment. With $1 billion in profit, Buffett will have more than enough funds for new stocks, like Bristol-Myers Squibb and Merck, while cutting his stake in Pfizer.