During Warren Buffett’s last quarter as CEO, Berkshire Hathaway sold more equities than it bought, continuing to whittle away at its big Apple and Bank of America stakes and slashing its already modest Amazon.com holding.
Berkshire significantly increased its stakes in Chevron and Chubb in the three months ending December 31 and added a small position in shares of The New York Times Compan, six years after selling its dozens of newspaper holdings.
Berkshire has sold Apple shares in each of the last three quarters and in seven of the past nine three-month periods, reducing its shares by a bit more than 75% since the summer of 2023.
Even so, Apple remains Berkshire’s biggest equity stake with a value of $60.3 billion based on Friday’s close.
The Apple sales, however, have helped #2 American Express close the gap from almost $150 billion to just under $8 billion.
It’s six straight quarters of sales for Bank of America, reducing that stake’s shares by 75% since the middle of 2024.
Berkshire’s Amazon.com stake was valued at $2.2 billion at the end of the third quarter. It’s now down to $478 million after the sale of 7.7 million shares during the fourth quarter, a cut of 77%.
In 2019, when Amazon first appeared in Berkshire’s portfolio with an $860 million position, Buffett went out of his way to tell CNBC’s Becky Quick it wasn’t his decision, he didn’t think it was a significant holding, and no big “personality change” had reversed his traditional aversion to tech stocks.
Barron’s suggests it was portfolio manager Todd Combs who bought the shares and the big reduction may be related to his December departure to join JPMorgan Chase.
Investors were not deterred by Berkshire’s sales of the three stocks. They all ended higher on the week.
Buying oil and insurance
Berkshire increased its share stake in Chevron by 6.6% during the fourth quarter, adding another $1.2 billion to the position based on the oil giant’s year-end stock price.
That’s the biggest boost for any Berkshire stock in Q4, but there haven’t been any especially significant changes in the Chevron position over the past three years.
Higher crude oil prices have helped lift Chevron’s share price by 20.7% since the beginning of the year, putting the current value of the stake at almost $24 billion, up from $19.8 billion on December 31.
It is #5 by value among Berkshire’s stock holdings.
Chubb was the second biggest buy of the quarter with a 9.3% share increase adding about $910 million to the value of the position based on the insurer’s December 31 stock price.
Berkshire’s 34.2 million shares are currently valued at almost $11.4 billion, making it the eighth largest holding in Berkshire’s equity portfolio.
Berkshire takes small step back into the newspaper business
The only stock added to Berkshire’s portfolio during the fourth quarter was a relatively small stake in The New York Times Company.
It is currently valued at $395 million, up from $352 million as of the end of the year thanks to a 12.4% jump for the newspaper’s share price.
Buffett’s love of newspapers goes way back. He delivered The Washington Post and other DC newspapers as a child, bought a very profitable Post stake for Berkshire in the 1970s, had a close friendship with Post publisher Katherine Graham, and worked closely with the editor of a small Berkshire-owned Omaha weekly that won a Pulitzer Prize in 1973.
But in 2020, Berkshire sold its newspaper holdings, including Buffett’s hometown daily, The Omaha World-Herald, and The Buffalo News, a Berkshire property since 1977, to Lee Enterprises for $140 million.
Based on the relatively small size of the Times stake - it accounts for 0.1% of the value of Berkshire’s equity portfolio - it almost certainly was not a Buffett purchase, with either portfolio manager Ted Weschler, or Todd Combs (before he departed) making the decision to buy.
While the Times purchase is almost spare change by Berkshire standards, it is more than the $250 million Jeff Bezos paid for The Washington Post in 2013, a price that was thought at the time to be four times what the newspaper was worth.
The current market value of the Times Company is $12.6 billion, giving Berkshire a 3.1% stake.
Berkshire’s vote of confidence appeared to add to the Times’ momentum, with shares ending the week with a 6.9% gain at an all-time closing high near $78.
A complete list of Berkshire’s U.S. holdings as of December 31 appears below.
Berkshire utility settles federal wildfire claims
Berkshire Hathaway’s PacifiCorp took two significant steps this week to deal with the enormous liability claims it faces over wildfires in the West.
On Friday, the Justice Department announced the utility has agreed to pay $575 million to resolve damage claims lodged by the U.S. government over six fires in California and Oregon in 2020 and 2022.
The government says PacifiCorp’s electrical lines “negligently” started all six fires. Its news release notes the “claims resolved by this settlement are allegations only and there has been no determination of liability. PacifiCorp continues to deny liability for these fires.”
A DOJ official is quoted as saying the agreement “strikes a balance by addressing the government’s significant fire-suppression costs and loss of natural resources without preventing PacifiCorp from offering electricity at fair prices.”
A PacifiCorp statement says the company has now settled “nearly 90% of known claims” for more than $2.2 billion, “providing certainty for customers and progress toward a financially healthy utility.”
On Tuesday, PacifiCorp said it is selling $1.9 billion of assets in Washington State to Portland General Electric Company to “improve the company’s financial stability while simplifying our operations to support our long-term commitment to customers in each of our remaining states.”
The utility faces more than $50 billion of potential liability from private claims that its failure to shut down power lines during windstorms In September of 2020 caused damaging wildfires in Oregon.
Earlier this month it asked the state’s Court of Appeals to decertify class action litigation over those fires.