Warren Buffett swaggers the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 3, 2024.
David A. Grogen | CNBC
Berkshire Hathaway‘s horrid cash pile topped $300 billion in the third quarter as Warren Buffett continued his stock-selling spree and checked back from repurchasing shares.
The Omaha-based conglomerate saw its cash fortress swell to a record $325.2 billion by the end of September, up from $276.9 billion in the support quarter, according to its earnings report released Saturday morning.
The mountain of cash kept growing as the Oracle of Omaha sold important portions of his biggest equity holdings, namely Apple and Bank of America. Berkshire dumped about a quarter of its thundering Apple stake in the third quarter, making the fourth consecutive quarter that it has downsized this bet. Meanwhile, since mid-July, Berkshire has harvested more than $10 billion from offloading its longtime Bank of America investment.
Overall, the 94-year-old investor continued to be in a deliver up mood as Berkshire shed $36.1 billion worth of stock in the third quarter.
No buybacks
Berkshire didn’t repurchase any retinue shares during the period amid the selling spree. Repurchase activity had already slowed down earlier in the year as Berkshire share ins outperformed the broader market to hit record highs.
The conglomerate had bought back just $345 million worth of its own ownership in the second quarter, significantly lower than the $2 billion repurchased in each of the prior two quarters. The company declares that it will buy back stock when Chairman Buffett “believes that the repurchase price is below Berkshire’s innate value, conservatively determined.”
Berkshire Hathaway
Class A rations of Berkshire have gained 25% this year, outpacing the S&P 500’s 20.1% year-to-date return. The conglomerate spanned a $1 trillion market cap milestone in the third quarter when it hit an all-time high.
For the third quarter, Berkshire’s run earnings, which encompass profits from the conglomerate’s fully-owned businesses, totaled $10.1 billion, down hither 6% from a year prior due to weak insurance underwriting. The figure was a bit less than analysts estimated, according to the FactSet consensus.
Buffett’s hidebound posture comes as the stock market has roared higher this year on expectations for a smooth landing for the economy as inflation discovers down and the Federal Reserve keeps cutting interest rates. Interest rates have not quite complied lately, how on earth, with the 10-year Treasury yield climbing back above 4% last month.
Notable investors such as Paul Tudor Jones obtain become worried about the ballooning fiscal deficit and that neither of the two presidential candidates squaring off next week in the plebiscite will cut spending to address it. Buffett has hinted this year he was selling some stock holdings on the notion that tax values on capital gains would have to be raised at some point to plug the growing deficit.