Berkshire Hathaway triples Alphabet stake and invests in Delta and Macys under new CEO
OMAHA, Neb. (AP) — Berkshire Hathaway more than tripled the size of its investment in Google’s parent company and bought Delta Airlines stock worth more than $2.6 billion as Greg Abel I got the position of CEO after taking over Warren Buffet at the beginning of the year.
The conglomerate also offloaded a number of other stocks, including Visa, Mastercard, Domino’s Pizza, Amazon and United Healthcare. departure late last year Todd Combs, one of two investment managers Buffett hired to help manage the portfolio.
Buffett has always been reluctant to invest in technology companies because he said he didn’t understand them well enough to predict long-term winners. Buffett made an exception to this rule by purchasing a large chunk of Apple stock towards the end of his career after realizing how attached consumers were to the company’s iPhones and computers.
Abel seems more comfortable because, as of the end of March, Berkshire owned about 58 million Alphabet shares, worth almost $17 billion. Just three months ago, Berkshire owned just 17.8 million Alphabet shares, worth $5.6 billion.
Berkshire purchased nearly 40 million shares of Delta in the first three months of the year. Buffett has a sordid history with airline investments over the years, having bought large amounts of the stock and eventually dumped it on multiple occasions.
“If there had been a forward-thinking capitalist at Kitty Hawk, he would have done his successors a huge favor by shooting the Orville,” Buffett told shareholders in 2008, because every airline has struggled to maintain a competitive advantage since the Wright brothers took to the air.
Berkshire also established a small new stake in Macy’s, worth about $55 million at the end of March.
Berkshire never comments on its moves from quarter to quarter into its $280 billion stock portfolio because it doesn’t want to discuss what it’s buying or selling. Earlier this month, as Abel led his first shareholder meeting as CEO, Buffett sat on the floor with the rest of the board.
Many investors have kept a close eye on Berkshire’s portfolio over the years because they like to copy Buffett’s moves. That may not be the case, at least until Abel breaks more records as a stock picker. He spent his career running companies such as Berkshire’s large collection of utilities.
But several stocks that Berkshire announced on Friday jumped after the conglomerate detailed its investments in a new filing with the Securities and Exchange Commission. Macy’s and Delta stock prices rose sharply after Berkshire’s announcement, but Alphabet’s stock prices remained virtually unchanged.
The Omaha, Nebraska-based company also owns dozens of other businesses, including major insurance companies like Geico, BNSF railroad, major manufacturers like Precision Castparts, and a variety of retail and service businesses that include well-known brands like Helzberg Diamonds, See’s Candy, and Dairy Queen.
