Buffett Sold Apple and Bought a Mystery Stock
Berkshire Hathaway has filed its transactions for Q4 2023.
The most surprising move was the sale of Apple shares. It is well-known that Buffett has been a loyal shareholder and an ardent supporter of the company, so few would expect him to sell, especially when Apple and the rest of the 'Magnificent 7' have performed well.
Berkshire Hathaway sold about 10 million shares, worth approximately $1.8 billion based on its average sale price.
It might seem a lot, but shareholders of Apple shouldn't be too alarmed because the amount sold was just 1% of its holdings. Berkshire Hathaway still holds Apple as its largest position in the portfolio, accounting for half of it.
I believe Buffett and his lieutenants are just looking to limit the portfolio's exposure to Apple to prevent it from becoming too large. It appears to me that they would like to keep it at about half of the portfolio. Thus, I don't think we can assume that Buffett is seeing something negative in Apple.
If Buffett indeed loses confidence in Apple, we will likely see more significant selling in future quarters.
Apple wasn't the only stock Berkshire Hathaway sold. By the end of December 31, 2023, four stocks were completely sold off: the Brazilian-based payments company StoneCo (STNE), insurance companies Markel (MKL) and Globe Life (GL), and homebuilder D.R. Horton (DHI).
Berkshire Hathaway made gains on these stocks, except for StoneCo:
Globe Life: +177%
D.R. Horton: +18%
Markel Group: +7%
StoneCo: -22%
Berkshire Hathaway is still betting on the homebuilder industry, considering that it still holds shares in NVR and Lennar. This suggests that they believe D.R. Horton is not as promising as the other two.
As for the insurance sector, it seems Berkshire Hathaway is reducing its stakes. Besides exiting Globe Life and Markel Group, Berkshire also trimmed its stakes in Aon in Q3 2023. While it still holds many bank stocks, Aon remains the only insurance stock in its portfolio, along with GEICO as a private company. This trend suggests to me that insurance is a sector to be cautious about.