Berkshire Hathaway (BRK.A, Financials) has cut its stakes in Apple (AAPL, Financials) and Bank of America (BAC, Financials) by more than 20% during the third quarter, according to its recent quarterly filing.
Under Warren Buffett (Trades, Portfolio)'s direction, the conglomerate said that, at the conclusion of Q3, the fair value of its Apple stake dropped from $84.2 billion in Q2 to $69.9 billion. This decline implies that Berkshire cut its Apple ownership by around 100 million shares, therefore lowering its position to roughly 300 million shares—a drop of almost 25%.
Likewise, Berkshire's ownership in Bank of America dropped; the fair value dropped to $31.7 billion at the end of Q3 from $41.1 billion in Q2. This shows a decline of over 230 million shares, therefore bringing its holdings to roughly 800 million shares—a drop of almost 23%.
These divestments helped Berkshire's cash reserves—which had been $276.94 billion on June 30—reach a record $325.21 billion as of September 30. Purchasing just $1.5 billion, the corporation sold $36.1 billion in equities during the quarter, ninth straight as a net seller of stocks.
Apple remains Berkshire's biggest equity investment, at $69.9 billion, notwithstanding these cuts. The corporation broke with past practice by not doing any stock buybacks throughout the quarter.
Operating profit for Berkshire for the quarter dropped by 6% to $10.1 billion, mostly owing to underwriting losses connected to insurance and effects of hurricanes. Some divisions, notably Geico and BNSF railroad, recorded earnings gains, nevertheless.
Focusing on liquidity and risk management, these calculated actions indicate Berkshire's cautious attitude among the state of the market.
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