por admin » Lun May 16, 2016 7:58 am
Buffett’s Berkshire Hathaway Takes $1 Billion Position in Apple
An image of Warren Buffett, chairman and chief executive of Berkshire Hathaway, is displayed on a sign ahead of the firm’s annual shareholders meeting in Omaha last month. ENLARGE
An image of Warren Buffett, chairman and chief executive of Berkshire Hathaway, is displayed on a sign ahead of the firm’s annual shareholders meeting in Omaha last month. Photo: Bloomberg News
By
Lauren Pollock
Updated May 16, 2016 8:53 a.m. ET
Warren Buffett’s Berkshire Hathaway Inc. took a new $1 billion position in Apple Inc. in the first quarter, a move that comes as the technology giant’s shares have been battered amid a slowdown in iPhone sales.
The legendary investor’s firm reported owning 9.81 million shares of Apple as of March 31, worth about $1.07 billion. But the value of that investment has already dropped significantly after the company reported its first quarterly revenue decline since 2003 last month.
Mr. Buffett, who for years had avoided technology stocks, previously professed to not understand the sector and has argued that it is difficult to defend the competitive advantages of the companies. Mr. Buffett’s investment track record has been built on investments in insurers, financial companies and industrial businesses, including household names like Coca-Cola Co. and American Express Co.
He hasn’t avoided technology completely, however, taking a position worth more than $10 billion in International Business Machines Corp. in 2011. Berkshire slightly increased that stake again in the first quarter.
In Apple, Mr. Buffett likely saw a buying opportunity as the shares are off sharply from last summer’s highs as the company struggles to maintain the sales surge that followed the introduction of its larger-screen smartphones in late 2014. The 2015 successors to those initial big-display models haven’t garnered as much enthusiasm from consumers.
Apple traded above $130 a share last July and ended the first quarter at $108.99. The shares, meanwhile, got a bounce premarket on the investment, rising 1.8% to $92.10.
Mr. Buffett’s positions were disclosed in a 13F filing with the Securities and Exchange Commission, a quarterly requirement for investors managing more than $100 million. The report indicates the number of shares held and the value of each stake at the end of the quarter, so it isn’t clear if Mr. Buffett has continued buying the stock since the quarter ended.
Mr. Buffett’s investment in Apple follows the exit of another well-known investor, Carl Icahn, who said last month he had sold his big position. He told CNBC at the time that Apple is a great company but no longer a “no-brainer” as an investment choice. Mr. Icahn made his initial investment, reported to be worth about $1.5 billion, in 2013. He subsequently bought more shares and called for the company to boost its stock buybacks.
As for IBM, Berkshire bought 198,853 shares in the first quarter, bringing the total value of its position to $12.3 billion. IBM is one of Mr. Buffett’s big four investments, along with Kraft Heinz Co. , Wells Fargo & Co. and Coca-Cola Co. Those three positions were unchanged in the first quarter.
Berkshire, meanwhile, eliminated its position in AT&T Inc., which the firm had pared in the previous quarter as well. Mr. Buffett had been a large investor in DirecTV, which AT&T bought last July.