Warren Buffett's Berkshire Hathaway sold a net $2 billion of stock last quarter - and boosted its share buybacks to $7.6 billion
- Warren Buffett's Berkshire Hathaway sold a net $2 billion of stock in the third quarter.
- The investor's company boosted its share buybacks to $7.6 billion in the period.
Warren Buffett's Berkshire Hathaway ramped up its buying and selling of stocks and accelerated its share buybacks in the third quarter, signaling the famed investor and his team made some tweaks to their equity portfolio, and saw value in Berkshire shares.
Buffett's conglomerate - which owns scores of businesses including See's Candies and Geico, and holds multibillion-dollar stakes in Apple, Coca-Cola, and other public companies - spent $1.4 billion on stocks and sold $3.4 billion worth in the period. For comparison, it bought about $1 billion worth and sold $2.1 billion of stock in the second quarter.
The latest transactions mean Berkshire sold about $2 billion of stock on a net basis last quarter, lifting its net stock sales for the nine months to September 30 to $7 billion, its third-quarter earnings show.
Berkshire also spent $7.6 billion on share repurchases last quarter, after slowing its rate of buybacks from $6.6 billion in the first quarter to $6 billion in the second quarter. It repurchased just over $20 billion of its stock in the first nine months of this year.
Despite the more aggressive buybacks, the company's cash pile swelled to a record $149 billion, up from $144 billion in the second quarter. Meanwhile, Berkshire's revenue climbed 12% to about $71 billion as many of its businesses rebounded from the pandemic. However, a sharp decline in investment and derivative gains meant its net income slumped by almost two-thirds to below $11 billion.
Buffett said at Berkshire's annual shareholder meeting in May that he would happily deploy around $80 billion of Berkshire's cash. Yet near-record stock prices, fierce competition for acquisitions from private-equity firms and SPACs, and Berkshire's rising stock price making buybacks less enticing, have come together to make it tricky for him to find compelling investments over the past 18 months.
Buffett and his team have reacted to the challenge by broadening their horizons. Over the past year and a half, Berkshire has invested in technology companies such as cloud-data platform Snowflake and Brazilian fintech Nubank, a quintet of Japanese trading companies, and a basket of pharmaceutical companies.
On the other hand, Berkshire has concentrated its portfolio. It has sold its stakes in JPMorgan, Goldman Sachs, the "Big Four" US airlines, and several other companies since the market crashed in spring 2020. It will reveal the contents of its US stock portfolio as of September 30 later this month.