Berkshire Hathaway Discloses Increased Stake in Apple
February 14 2017 - 7:12PM
Dow Jones News
By Nicole Friedman
Warren Buffett's Berkshire Hathaway Inc. increased its stake in
Apple Inc. by more than 200% in the fourth quarter, just before the
iPhone maker rallied to an all-time high.
The purchases expanded Berkshire's stake in the technology giant
to $6.6 billion as of Dec. 31. Its 57.4 million shares as of that
date would be worth about $7.7 billion based on Tuesday's closing
price.
Better-than-expected iPhone sales, building anticipation for the
next edition of the phone and hopes for a U.S. tax cut on overseas
profits have all helped to boost Apple's stock in recent weeks.
Apple rose 1.3% Tuesday to $135.02, a record closing high. The
company is now worth $700.5 billion based on Tuesday's closing
price, more than any other company world-wide.
Berkshire first bought Apple shares in May 2016 when prices were
near two-year lows. One of Berkshire Chairman Warren Buffett's
investing lieutenants, either Ted Weschler or Todd Combs, was
responsible for the company's initial Apple investment.
Apple shares rose 3.7% the day Berkshire's initial stake was
revealed, and have largely been on an upward trend since that
time.
Mr. Buffett historically has shunned technology investments,
saying they are outside his "circle of competence," or areas of
expertise. But Mr. Combs and Mr. Weschler, who are slated to take
over all the investing duties at Berkshire whenever Mr. Buffett
steps aside, have shown a willingness to wade into corners of the
market that Mr. Buffett himself won't touch.
Mr. Weschler explained the investment in a June interview with a
German magazine, though he wouldn't confirm whether it was his
position or Mr. Combs's. Apple's ecosystem keeps consumers loyal to
its products, like a subscription model, Mr. Weschler told Manager
Magazin.
Berkshire's A shares rose 0.8% Tuesday to $250,419, their first
close above $250,000.
Separately, Berkshire also added a $2.2 billion stake in
Southwest Airlines Co. during the fourth quarter and increased its
holdings in American Airlines Group Inc., Delta Air Lines Inc. and
United Continental Holdings Inc.
Berkshire's third-quarter 2016 investments in American, Delta
and United surprised followers of Mr. Buffett. The billionaire
investor has criticized airlines for decades as money-losers.
However, he told Charlie Rose in a January interview that investing
in airlines was "in large part my decision."
Mr. Buffett declined to comment through an assistant.
Write to Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
February 14, 2017 18:57 ET (23:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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