Warren Buffett’s Berkshire Hathaway on Tuesday revealed billion-dollar stakes in telecom company Verizon and oil and gas wholesaler Chevron, investments it had previously kept confidential.
The investment conglomerate announced it had bought 58.3 million shares of Verizon in the third quarter of 2020 and an additional 88.4 million in the fourth quarter, bringing its stake to $ 8.6 billion, one of its largest equity holdings. .
According to Securities and Exchange Commission filings, the Omaha, Nebraska-based company also bought 48.5 million shares of Chevron in the second half of 2020 worth $ 4.1 billion, as well as 4.3 million shares of insurance broker late last year. Marsh. & McLennan estimated at $ 499.3 million.
Berkshire, which owns the BNSF railroad and Geico insurer, has not said why it asked US securities regulators for permission to keep stock purchases confidential in its third-quarter filings. It did not respond to a request for comment.
Buffett has partnered with his deputies Todd Combs and Ted Weschler in allocating the $ 245 billion equity portfolio. It was not clear who made the decision to invest in Verizon and Chevron.
Verizon stock was up 3 percent and Chevron was up 2.5 percent in out-of-hours trading after news of the investments. The purchases made Berkshire one of Verizon’s top five shareholders, with about 3.5 percent of the telecom company, according to data provider Bloomberg.
Darren Pollock, a portfolio manager at Cheviot Value Management, said the Verizon and Chevron purchases “make perfect sense” as both were “relatively undervalued and offer high dividend yields.”
“At stock prices in recent months, both Verizon and Chevron are available with a significant margin of safety – limited downside risk, while generating significant income and moderate impairment potential,” Pollock said. “At worst, they are a relatively safe parking lot for more than $ 12 billion of Berkshire’s growing cash balance.”
Omaha’s so-called Oracle has made efforts over the past year to reframe the company’s portfolio and shift its investments as the coronavirus crisis shook much of the business world.
Berkshire has reduced its stake in several bank stocks and sold the remaining shares in JPMorgan Chase, PNC Financial Services and M&T Bank in the fourth quarter.
The company also reduced its position in Apple by 57.2 million shares, although a 14.6 percent increase in the iPhone maker’s shares in the fourth quarter meant the value of Berkshire’s stake increased. Apple remained the largest equity investment, valued at just under $ 118 billion at year-end.
Berkshire has adjusted its investments in several drug manufacturers over the period. It increased its stake in AbbVie, Bristol-Myers Squibb and Merck, but sold Pfizer.
Investors await Mr. Buffett’s annual letter to shareholders for guidance on how the 90-year-old doyen of the investment world plans to use Berkshire’s approximately $ 146 billion in cash. Berkshire’s letter and annual results will be released later this month.