Berkshire has been a big buyer of Apple over the last two years, though its purchases slowed more recently as the stock rose. It will report its investment activities for the third quarter later this month. As of the end of June, Berkshire was Apple’s second biggest holder, with 5.22 percent.
The fair value of its investments as of Sept. 30 was $207 billion, up from $179 billion at the end of June and $170 billion as of the end of last year. Its portfolio is concentrated in five companies: Apple, American Express, Bank of America, Coca-Cola and Wells Fargo. Apple is up nearly 20 percent this year, while the banks have lost ground. Wells Fargo is down nearly 11 percent.
Berkshire signaled it was prepared to buy back its own stock in July, when it loosened the rules Buffett and his longtime lieutenant Charlie Munger use to decide whether to purchase the stock. With a cash pile of more than $100 billion and few opportunities to buy companies at a price Buffett is willing to pay, buying back the company’s own stock was seen as a good option.
“Better late than never,” said David Rolfe, chief investment officer of St. Louis-based Wedgewood Partners, a longtime owner of Berkshire Class B shares. Now that Berkshire is willing to buy its own shares, it might be less tempted to make a big acquisition with its cash that doesn’t pan out, he said. “It speaks to me of a significantly derisked position,” Rolfe said.
“If Plan b is to buy back our own shares, shareholders should feel very comfortable.”
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