Berkshire Hathaway Bought 75 Million Additional Apple Shares in Q1 2018

Discussion in 'Mac Blog Discussion' started by MacRumors, May 4, 2018.

  1. MacRumors macrumors bot

    MacRumors

    Joined:
    Apr 12, 2001
    #1
    [​IMG]


    Berkshire Hathaway bought 75 million additional Apple shares in the first three months of 2018, CEO Warren Buffett told CNBC on Thursday, signaling the billionaire investor's continuing confidence in Apple.

    In February last year, Buffett revealed that his holding company held around 133 million shares in Apple prior to the company's record-breaking earnings results on January 31, 2017, worth over $17 billion at the time. Today it holds 240.3 million shares worth $42.5 billion.

    [​IMG]
    Historically, Buffett has shied away from investing in technology companies, but the business magnate has suggested he sees Apple more as a consumer company. Reuters reports that Berkshire's latest Apple investment serves as a way of reducing the corporate group's $116 billion in cash and equivalents, without having to acquire a whole company.

    Apple posted revenue of $61.1 billion and net quarterly profit of $13.8 billion in the first quarter of the year, up from revenue of $52.9 billion and net quarterly profit of $11.0 billion in the year-ago quarter. Apple said it will start a new share buyback authorization of $100 billion following the record revenue and profit numbers.

    Article Link: Berkshire Hathaway Bought 75 Million Additional Apple Shares in Q1 2018
     
  2. Krayzkat Suspended

    Joined:
    Apr 22, 2011
  3. Lone Deranger macrumors 68000

    Lone Deranger

    Joined:
    Apr 23, 2006
    Location:
    Tokyo, Japan
    #3
    Tragically astute observation. Yet here we are.
    Thanks Cook-bama!
     
  4. Constable Odo macrumors 6502

    Constable Odo

    Joined:
    Mar 28, 2008
    #4
    It's really odd how some old guy like Warren Buffett understands how Apple is being run and he's not even into tech. I know he was saying that he's not buying Apple stock just for quarterly iPhone sales. He's looking at a longer term picture. Yet, there's always these analysts and investors fretting and crying over how many iPhones are being sold and consider it some sort of financial disaster if Apple comes up a million short in a single quarter. Shouldn't most companies be judged by product sales for a full year and not just quarter to quarter.

    I realize Apple might not perform like the FANG stocks do when it comes to share gains. Apple doesn't appear to have any double-digit growth in revenue. Maybe those times are gone forever. Still, there's no reason for analysts to be telling people to dump Apple stock and buy FANG stocks. Saying something like that is so stupid. Apple gives out pretty decent dividends. Most companies don't have double-digit revenue growth so it's like analysts are telling investors not to invest in companies that can't provide double-digit revenue growth and that's most of the companies on the planet.

    For the most part, Buffett seems like a rather smart and conservative investor who buys stock based on a company's fundamentals instead of just quarterly sales. He seems like he's into Apple for the long haul and I hope he is. It will be interesting to see if Apple is able to outlast any of the FANG stocks that Wall Street constantly praises.
     
  5. Superhai macrumors 6502

    Superhai

    Joined:
    Apr 21, 2010
    #5
    I have no idea how much or not Buffett understands, but no matter, he does not live in vacuum, or in a remote cabin outside a remote village. He has a dozen analysts, but also family and friends who certainly are able to inform about any subject he may not be too familiar about.
     
  6. FatherJack1980 macrumors regular

    FatherJack1980

    Joined:
    Dec 31, 2015
    #6
    I was very surprised when I first read that Berkshire Hathaway had bought shares in Apple, because I knew Buffett had never bought even a single stock in Microsoft, despite that Bill Gates is his friend; found even a source to back me up.
    (source: https://seekingalpha.com/article/4107130-can-learn-buffetts-decision-invest-microsoft).

    So I found out that two employees of Berkshire Hathaway are probably behind buying Apple's stock - but I very much assume with Buffett's approval.
    (source: https://www.fool.com/investing/2016/05/26/why-berkshire-hathaway-bought-into-apple.aspx)
     
  7. djcerla, May 4, 2018
    Last edited: May 4, 2018

    djcerla macrumors 68000

    djcerla

    Joined:
    Apr 23, 2015
    Location:
    Italy
    #7
    “Nobody buys a farm based on whether they think it’s going to rain next year” may be the only quote you need in order to invest successfully in AAPL. Buffett is spot on.

    The first 10M shares stake was bought by an unnamed employee. The rest of the huge 235M shares investment was bought by Buffett himself. It’s by far Berkshire’s biggest asset, and it paid back handsomely so far.

    “For the quarter, Apple posted revenue of $61.1 billion compared to revenue of $52.9 billion in the year-ago quarter.”

    Definitely double-digit growth (16% YOY).
     
  8. kingalexthe1st macrumors 6502

    kingalexthe1st

    Joined:
    Apr 13, 2013
    #8
    Well said. Apple's P/E ratio is wonderfully low, and the fact it posts gains as it does for a $920 billion company is extraordinary. I think it's undervalued, and the only reason I'm not buying AAPL is because I'm already exposed to the tech sector and don't want to indulge.
     
  9. macfacts macrumors 68040

    macfacts

    Joined:
    Oct 7, 2012
    Location:
    Cybertron
    #9
    The story quotes him as saying he isn't buying Apple stock because he believes in the tech, he is buying because he believes in the consumers buying more Apple products.

    He is also buying Apple shares because Apple is big so that he can invest a lot without having to buy the whole company and thus avoid having to do more work like running the company as well.


    Historically, Buffett has shied away from investing in technologycompanies, but the business magnate hassuggested he sees Apple more as a consumer company. Reuters reports that Berkshire's latest Apple investment serves as a way of reducing the corporate group's $116billion in cash and equivalents, without having to acquire a whole company.​
     
  10. RichTeer macrumors member

    RichTeer

    Joined:
    Aug 13, 2014
    Location:
    Kelowna, BC, Canada
    #10
    Agreed. Buffet has stated in the past that he tends to invest for the long term, which is why (unlike some other investment companies) he's less concerned about quarterly-to-quarterly performance, and more concerned about the long term prospects. Alas, my meagre 10 shares won't make (or lose) me much money, but it's fun to play!
     
  11. adamjackson macrumors 68000

    Joined:
    Jul 9, 2008
    #11
    Lol and at the peak, Carl Icahn held 3 million shares, right? Goes to show how different these investors are. Berkshire buys 75 million, doesn't tell Apple how to run the show. Icahn holds 3 million and every week spouts off about how badly Apple is being operated.
     
  12. Jacquesass macrumors regular

    Joined:
    May 6, 2003
    #12
    240.3M shares, paying a $.73/share quarterly dividend. That’s $700M in annual dividend payments to Berkshire Hathaway.

    It may be a tech stock, but that move is classic Buffett.
     
  13. Nunyabinez macrumors 68000

    Nunyabinez

    Joined:
    Apr 27, 2010
    Location:
    Provo, UT
    #13
    That has been the secret to Buffet’s success. He buys companies that are doing awesome and then lets the people who got them there keep running them.

    If a company needed help making decsisons, Buffet wouldn’t take a second look at them.
     
  14. Rogifan macrumors Core

    Rogifan

    Joined:
    Nov 14, 2011
    #14
    Stock reached an all time high today. CNBC will have a nervous breakdown if Apple gets to 1T before Amazon does.
     
  15. IJ Reilly macrumors P6

    IJ Reilly

    Joined:
    Jul 16, 2002
    Location:
    Palookaville
    #15
    Mainly, but not always. He prefers not to be an activist investor but he's done it on occasion.
     
  16. KellyJ macrumors newbie

    KellyJ

    Joined:
    Oct 10, 2017
    #16
    I know first hand how detrimental it can be for employee moral if Buffet buys a company. Be careful what you ask for, investors. Besides, Buffet owned a lot of IBM stock too. How did that work out?
     
  17. Solomani macrumors 68040

    Solomani

    Joined:
    Sep 25, 2012
    Location:
    Alberto, Canado
    #17
    Dear Mister Buffet, Your Awesomeness, Pre-eminent Duke of Apple:

    Please bring back the Mac Pro. Please tell your company (AAPL) that they cannot keep ignoring those beautiful Macs. Please tell your company to make Siri a lot better, and more competitive. We gave up on Cook, but maybe you could Make Apple Great Again, sir! Thank you for listening. :p

     
  18. dwman macrumors 6502

    dwman

    Joined:
    Nov 15, 2007
    Location:
    San Francisco
    #18
    As the spouse of an Apple employee who has RSU's, this is welcome news! :apple::D
     
  19. DeepIn2U macrumors 603

    DeepIn2U

    Joined:
    May 30, 2002
    Location:
    Toronto, Ontario, Canada
    #19

    Thank you Mr Buffet ... record stock highs.

    Buffet is a meat and potatos' investor the globes very best! It's about fundamentals he sees.
     
  20. anson42 macrumors 6502

    Joined:
    Mar 13, 2014
    Location:
    Oakland, CA
    #20
    Step 1. Buy tons of Apple shares
    Step 2. Sell them back to Apple during buyback
    Step 3. Profit!

    Granted, BH buys and holds a ton of shares, though I do wonder of they sell some to realize gains.
     
  21. 69650 Suspended

    69650

    Joined:
    Mar 23, 2006
    Location:
    England
    #21
    Buffet is pumping the stock beyond its true value.
     
  22. ipponrg macrumors 68000

    Joined:
    Oct 15, 2008
    #22
    Buffet's strategies also involved investing in dividend stocks. He and his team might have suspected the raise in dividends, which would encourage the additional share purchase.

    Keep in mind that finance is a very grey world. It's comical how people always think the stock market is black and white.
     
  23. IJ Reilly macrumors P6

    IJ Reilly

    Joined:
    Jul 16, 2002
    Location:
    Palookaville
    #23
    What are you trying to say?
     
  24. Falhófnir macrumors 68040

    Falhófnir

    Joined:
    Aug 19, 2017
    #24
    Hmm, when these real professional type investors get involved it’s generally detrimental to ordinary shareholders - they’d much rather the stock cycled between $150 and $180 so they can buy and sell for a profit than it just keep going up...
     
  25. IJ Reilly macrumors P6

    IJ Reilly

    Joined:
    Jul 16, 2002
    Location:
    Palookaville
    #25
    This has never been Buffett's style. He's been a buy and hold "value" investor for decades, this is how he made his reputation and his billions. Now, suddenly he's a pumper and dumper? No, probably not.
     

Share This Page

28 May 4, 2018