Berkshire Bites into Domino's Pizza and Reduces Position in Ulta Beauty

Warren Buffett's Berkshire Hathaway Inc. took out a new position in Domino's Pizza Inc. during the third quarter, while also establishing a stake in Pool.

That sent both stocks higher, with Domino's up 8% in premarket trading on Friday and Pool Corp.'s up 0.2%.

Berkshire Hathaway's 13-F filing for the third quarter revealed that it opened a position of 1.28 million Domino's shares, worth $549 million at the end of the period. Investment outfits have to disclose their holdings 45 days after a quarter's end, giving investors periodic glimpses into their investment strategies, albeit with some delay.

The filing also showed Buffett buying up 404,057 shares of Pool Corp., worth $152 million at the quarter's end.

Both stocks have been laggards this year, with Domino's shares up about 6% over the course of 2024 to date and Pool Corp.'s off 8%. The S&P 500 has risen 25%.

Domino's stock has been kept in check due to spending pressures among lower-income consumers while Pool Corp.'s has been weighed down by sluggish demand for pools in an environment where people are more cautious on discretionary spending.

Berkshire previously signaled in its earnings report that it further unwound its Apple stake in the third quarter. Buffett's Apple position fell by a quarter in the period, and it's down by two-thirds over the course of this year.

The moves come as Buffett has been building cash through stock sales generally. Berkshire's cash and equivalents plus short-term U.S. Treasury investments came out to $325.2 billion in the third quarter, relative to $276.9 billion at the end of the second quarter. The strategy has made some bulls nervous, with stocks having hit records in recent days.

While Berkshire has been reducing its stakes in big names like Apple and Bank of America, it's also initiated some smaller positions in new names, like the ones revealed in this latest filing, as well as Ulta Beauty Inc., which was a second-quarter pickup.

That said, Buffett sold most of that Ulta position in the most recent quarter, Thursday's 13-F showed. Berkshire's stake amounted to about 24,000 shares at the end of the third quarter compared with 690,106 at the end of the second quarter.

ulta beauty's stock was down 5% in premarket trading on Friday.