Warren Buffett’s Berkshire Hathaway offloads billions in stocks for 12th straight quarter — What does it signal?
Warren Buffett’s Berkshire Hathaway sold $6.1 billion worth of shares in the company than it bought; The legendary investor is entering his final months to complete his role as Chief Executive Officer (CEO) of the company he founded for over sixty years.
Berkshire Hathaway’s third-quarter earnings report on Saturday showed that the Warren Buffett-led company sold net shares of common stock over the past three months.
The filings also revealed that $12.5 billion worth of stock bought $6.4 billion worth of stock in the three months ending in September, meaning more sales than spending.
This marks the 12th consecutive quarter in which Berkshire Hathaway under Warren Buffett has sold more shares than it has bought. The conglomerate will disclose which U.S. stocks it buys and sells in a separate regulatory filing later this month.
Buffett also recently stayed away from share buybacks for the fifth consecutive quarter. Berkshire shares have fallen 12% since May, when Buffett announced he would step down as CEO.
Why is Warren Buffett selling stocks?
Warren Buffett, the outgoing CEO of Berkshire Hathaway, has seen more opportunities to sell than buy stocks lately, which is why he has continued this move for the past three years.
This has happened since the rise in stock prices in many sectors in the US markets.
Berkshire’s selling of shares since 2022 shows a continued defensive stance in equity markets as the global economic situation changes regularly, especially after Donald Trump’s inauguration as US President.
Berkshire’s cash pile is at record level
Continuing share sales and refraining from buying shares brought Berkshire Hathaway’s cash accumulation to a record level.
According to the statement made on Saturday, the holding’s cash pile currently stands at $381.7 billion.
Warren Buffett is hoarding cash as he steps down as CEO and the role is handed over to vice chairman Greg Abel. Buffett will remain chairman of Berkshire Hathaway.
It’s unclear how Abel will use the money, with options that potentially include paying the $1.03 trillion conglomerate’s first dividend since 1967.
Lower insurance losses helped third-quarter operating profit rise 34% to $13.49 billion, beating analyst estimates, according to the filing.
Net income increased by 17% to $30.8 billion.
Berkshire said economic uncertainty and declining consumer confidence had a negative impact, halting sales growth at homebuilder Clayton Homes and reducing revenue from Jazwares, maker of Duracell batteries, Fruit of the Loom clothing and Squishmallows toys.
