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Apple Is Now Warren Buffett's Largest Investment

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Warren Buffett’s Berkshire Hathaway added over 31 million Apple shares to its portfolio in the December quarter per WhaleWisdom.com. With a total of 165 million shares, worth $28 billion, Apple comprises 14.6% of Berkshire’s $191 billion of assets as of December 31. This made it the firm’s largest investment, barely passing Wells Fargo by $200 million. (Note that I own Apple shares and have sold put options).

The filing, released after the market closed on Wednesday, revealed that Apple is Berkshire’s largest holding is probably one of the reasons that Apple’s stock has risen almost $3, or 1.7%, on Thursday morning vs. the NASDAQ’s 0.2%.

Berkshire’s history with Apple

Warren Buffett is well known for not investing in technology companies since he hasn't felt comfortable that he would understand them well enough and that they don’t have a “moat” to fend off competition. Which means Berkshire’s purchase of Apple shares has probably been done by Todd Combs and/or Ted Weschler, two of Berkshire's portfolio managers.

Berkshire added Apple to its portfolio in the March 2016 quarter by buying 9.8 million shares. After adding 5.4 million more in the June 2016 quarter, for a total of 15.2 million, it waited until the December 2016 quarter to almost quadruple the total number of shares it owned to 57.4 million.

In the March 2017 quarter Berkshire made its largest buy of Apple shares (72 million), more than doubling its holdings to 129 million. It made a small purchase, under 1 million shares, purchase in the June quarter and then added 3.9 million in the September quarter. By buying 31 million shares in the December 2017 quarter it now has 165 million, making it the firms' largest holding in terms of market cap.

Where Berkshire ranks vs. other institutional investors

While Apple is the firm’s largest holding based on market cap, it is only the fourth largest institutional investor in the company. For Berkshire’s second to fifth largest investments it is the largest or potentially the second largest (in Bank of America) institutional investor in those companies.

  • Apple: 4th largest holder with just over 3% of the shares
  • Wells Fargo: Largest holder with over 9% of the shares
  • Kraft Heinz: Largest holder with almost 27% of the shares
  • Bank of America: Largest or second largest with 6.5% of the shares
  • Coca-Cola: Largest holder with over 9% of the shares

Berkshire Hathaway's Top 5 Holdings

WhaleWisdom.com

Buffett is well known for holding onto his investments for a very long time and having a substantial ownership in those companies. It is fairly amazing that in the course of just under two years that Apple is now Berkshire’s largest investment.

I have annotated on the chart below the first quarter and the three quarters of Berkshire’s largest Apple purchases to try and give a feeling on how well they have been timed.

Warren Buffett purchases of Apple over the past two years.

StockCharts.com