By Karen Langley
Warren Buffett's Berkshire Hathaway established new positions in consumer companies Domino's Pizza and Pool Corp. while mostly selling stocks in the third quarter.
The Omaha, Neb., company also slashed its recently established stake in Ulta Beauty and cut its holdings of Capital One Financial and Charter Communications, according to a regulatory filing made public after the market closed Thursday.
Berkshire had already revealed that it continued selling down its flagship position in Apple during the quarter and reduced its big stake in Bank of America.
The disclosures in a Form 13F filing with the Securities and Exchange Commission give details of what was already clear: Berkshire has been selling stocks and building up its mountain of cash.
Buffett's company sold a net $127 billion of stocks in the first nine months of the year, according to its financial statements. In the third quarter, it sold $36 billion of stocks and purchased $1.5 billion.
The sales helped drive the company's cash pile to a record $325 billion at the end of September. (Some Berkshire observers reduce the cash total by subtracting a payable on the company's balance sheet for purchases of Treasury bills. That would leave the cash at about $310 billion -- still easily eclipsing the previous high.)
The new stock positions disclosed Thursday are relatively modest, at least by Berkshire's standards. The Domino's holding was worth about $549 million at the end of September, while the Pool. Corp stake was worth about $152 million.
Neither stock has been caught up in the rally that has lifted the S&P 500 25% this year. Domino's shares have risen 5.8% in 2024, while Pool Corp. shares have declined 10%.
Domino's and its rivals benefited in the early stages of the pandemic from a flood of delivery and carryout orders, but that bump faded after many restaurants pivoted to takeout options and diners eventually started going out more.
Pool Corp. shares soared during the pandemic as homeowners invested in amenities like swimming pools to improve their stay-at-home lifestyles. More recently, high borrowing costs have weighed on demand for home repairs and renovations, dinging shares of companies in related industries.
Institutional investors who manage at least $100 million in U.S. stocks and certain other equities are required to reveal their holdings as of the end of each quarter in the Form 13F filing. Investors have 45 days to submit the filings, so the glimpse they provide of stock portfolios may well be out-of-date.
But Buffett's reputation as a legendary stock picker means many investors are still eager for any clues about what he and his deputies have been buying and selling. Lately, Berkshire's move toward cash has some observers wondering whether Buffett has grown cautious.
One factor that may be at play for the price-conscious investor: The stock market is looking increasingly expensive. The S&P 500 traded in recent days at 22.3 times its projected earnings over the next 12 months, above a 10-year average of 18.4 times, according to FactSet.
"It's hard to find bargains," said Jerry Beyke, a longtime Berkshire shareholder and senior investment analyst at Scharf Investments. "Buffett, before he puts money to work in a new idea, he wants a bargain."
Berkshire shook up its investment portfolio by slashing its Apple position. The company held 300 million shares of the iPhone maker on Sept. 30, down from slightly more than 900 million Apple shares at the end of 2023. The position remained Berkshire's largest stock position, worth $69.9 billion when the third quarter ended.
Berkshire's Class B shares have rallied 31% this year, outpacing the S&P 500.
Write to Karen Langley at karen.langley@wsj.com
(END) Dow Jones Newswires
November 14, 2024 17:08 ET (22:08 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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