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Key Takeaways
- Warren Buffett’s Berkshire Hathaway revealed in a regulatory filing that the ‘mystery stock’ the conglomerate has been buying is insurer Chubb.
- The quarterly 13F also confirmed that Berkshire sold around around 116 million shares of Apple in the first quarter, while also jettisoning most of its stake in Paramount Global.
- Berkshire sold all of the nearly 23 million shares it owned in HP Inc., while adding slightly to its stake in Occidental Petroleum and significantly boosting its holdings in Liberty Media.
Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) has revealed that insurer Chubb (CB) is the mystery stock that the conglomerate had started building a position in last year but had asked regulators to keep under wraps.
In its quarterly 13F filing with the Securities and Exchange Commission released late Wednesday, Berkshire said that it ended the first quarter with nearly 26 million shares of Chubb valued at about $6.72 billion.
It’s unclear why Berkshire had omitted Chubb from its filings for the third and fourth quarters, when it said that it had requested confidential treatment from the SEC for one of its holdings.
The news that Chubb had become part of the Oracle of Omaha‘s portfolio sent shares of the company sharply higher in after-hours trading Wednesday. Chubb shares were up 8% at around 8:00 p.m. ET.
Insurance is a core business for Berkshire, which owns companies such as GEICO, General Re as well as a number of Berkshire-branded insurance businesses that provide coverage across the spectrum—from auto, to business and home insurance. One illustration of the importance of insurance to Berkshire: Ajit Jain, head of the company’s insurance business, was one of only two executives seated at the table with Buffett during Berkshire’s annual shareholders meeting.
Apple and Paramount Cuts Were Expected
Berkshire confirmed in the 13F that it sold a large portion of its stake in Apple Inc. (AAPL) and most of its stake in Paramount Global (PARA) in the first quarter. Berkshire had previously disclosed the amount of the cut in its Apple stake, and Buffett had discussed the changes in both holdings at the annual shareholders meeting on May 4.
In the case of Apple, Berkshire cut its stake to around 790 million shares at the end of the first quarter, from 905 million at the end of the fourth quarter. While the cut was significantly more than the 10 million-share reduction in the fourth quarter, Buffett told shareholders that his views on Apple as an investment hadn’t changed and that company would continue to be Berkshire’s largest holding.
Berkshire sold almost 56 million shares of Paramount, leaving it with about 7.5 million shares as of the end of the first quarter. Some investors had interpreted remarks Buffett made at the shareholders meeting to suggest that the company had exited its Paramount position entirely.
Added to Liberty Media, OXY Stakes, Exited HP
Buffett, known for his buy-and-hold approach to investing, only rarely changes his existing positions in companies.
Among the positions that increased in the first quarter, Berkshire added nearly 22 million shares of Liberty Media’s Series C SiriusXM shares and 12.5 millions shares of Liberty Media’s Series A SiriusXM shares, for a total of 35 million additional tracking shares of Sirius XM (SIRI). Sirius XM and Liberty Media announced last December that they will convert the tracking shares to SIRI shares, with the conversion expected to complete June 30, 2024.
The only other prior stake that Berkshire increased in the first quarter was Occidental Petroleum Corp. (OXY). Berkshire added about 4.3 million shares in that period, bringing its end-of-quarter total to just over 248 million shares.
Berkshire closed out just a single name in its portfolio in the first quarter: the firm sold off all of its nearly 23 million shares of HP. At the end of the fourth quarter, that stake was worth about $688 million.