Warren Buffett’s Berkshire Hathaway on Tuesday announced two major new investments, which revealed a $ 8.6 billion stake in telephone company Verizon Communications and a $ 4.1 billion stake in oil company Chevron.
The investments were disclosed in a regulatory dossier detailing Berkshire-listed shares listed in the United States on December 31st.
Berkshire also revealed a new $ 499 million stake in professional services company Marsh & McLennan.
To make room, Berkshire reduced its investments in several companies, including Apple, although with about $ 121 billion, the iPhone maker remains by far its largest shareholding.
Verizon shares rose 3 per cent, Chevron rose 2.2 per cent and Marsh did not change in trading after hours after Berkshire’s presentation.
Tuesday’s presentation signals where Buffett and his portfolio managers, Todd Combs and Ted Weschler, see value, though Buffett typically manages larger investments.
It also shows that Berkshire is finding ways to deploy its cash deposit, which amounted to $ 145.7 billion as of September 30th.
The Omaha, Nebraska-based conglomerate owns more than 90 companies, including Geico Car Insurance, BNSF Railroad and Dairy Queen Ice Cream, but it has been five years since its last major takeover, with a purchase of $ 32.1 billion from Precision Castparts.
Berkshire had begun investing in Verizon, Chevron and Marsh in the third quarter of last year and had obtained permission from the Securities and Exchange Commission to delay the disclosure of the shares.
Over the years, the SEC has allowed Berkshire to invest quietly in companies, to prevent investors from living up to Buffett’s bets and raising corporate stock prices before Berkshire’s purchase ends. .
Tuesday’s presentation showed Berkshire, a major Bank of America investor, cutting back on smaller banking rivals, reducing its stake in Wells Fargo and leaving out JPMorgan Chase, M&T Bank and PNC Financial Services Group Inc. .
Berkshire also invested more in drug manufacturers Abbvie, Bristol-Myers Squibb and Merck & Co. while selling a small stake in vaccine maker COVID-Pfizer Inc. He also launched the mining company Barrick Gold Corp.
Doug Kass, managing partner of Seabreeze Capital Investment in Palm Beach, Florida, said Verizon’s stake “makes sense” for Berkshire, reflecting the phone company’s dividend payments and prospects for wireless revenue growth.
Reduced bank holdings may reflect Buffett’s concern about persistent low interest rates and coronavirus-related loan losses, Kass added.
Berkshire should provide more details on its investments when it publishes year-end results and Buffett’s annual shareholder letter on 27 February.