Berkshire Hathaway recently announced a $2.65 billion investment in Delta Air Lines and a new stake in Macy’s, alongside a strategy shift involving the sale of various smaller stock holdings, including those in Amazon, UnitedHealth Group, and credit card companies Visa and Mastercard. This portfolio adjustment comes after Greg Abel’s promotion to CEO, succeeding Warren Buffett.
In a regulatory filing, Berkshire revealed that it increased its stake in Alphabet, Google’s parent company, to approximately $16.6 billion, making it one of the firm’s largest investments. Additionally, Berkshire more than doubled its ownership in the New York Times, now holding around 9% of the company’s stock. The portfolio update reflects Berkshire’s US-listed stock holdings as of March 31, which comprise a total of about $288 billion.
During the first quarter, the company reported stock purchases totaling $15.94 billion, while sales amounted to $24.09 billion. Most of the transactions are believed to have been directed by Abel, who oversees the majority of Berkshire’s equity portfolio. Earlier this year, Abel stated that he managed 94% of the portfolio, with investment manager Ted Weschler handling the remaining 6%. Notably, Berkshire previously held an 11% stake in Delta, but divested during the early stages of the pandemic when Buffett indicated significant changes in the aviation sector.
Following the announcements, Delta’s shares increased by 3.2% in after-hours trading, signaling investor confidence attributed to Berkshire’s backing. Macy’s shares also rose by 5.9% after news broke of Berkshire’s acquisition of a 3-million-share stake valued at approximately $55 million.
Why this story matters
- Indicates Berkshire Hathaway’s strategic investment approach under new leadership.
Key takeaway
- Berkshire is shifting its portfolio with significant investments in Delta Air Lines and Macy’s while divesting from several tech and healthcare stocks.
Opposing viewpoint
- Some analysts may argue that Berkshire’s increased investment in airlines contradicts earlier concerns about the aviation industry’s long-term stability.
