{"id":22199,"date":"2017-02-15T05:41:11","date_gmt":"2017-02-15T05:41:11","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=22199"},"modified":"2017-02-15T05:42:07","modified_gmt":"2017-02-15T05:42:07","slug":"berkshire-takes-huge-bite-of-apple-boosts-airline-stakes","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/berkshire-takes-huge-bite-of-apple-boosts-airline-stakes.html","title":{"rendered":"Berkshire takes huge bite of Apple, boosts airline stakes"},"content":{"rendered":"

\n\tBerkshire takes huge bite of Apple, boosts airline stakes<\/strong><\/span><\/span>
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\n\tBerkshire takes huge bite of Apple, boosts airline stakes:- <\/strong>Warren Buffett's Berkshire Hathaway Inc (BRKa.N) was an aggressive buyer of stocks in last year's fourth quarter, nearly quadrupling its stake in Apple Inc (AAPL.O) and increasing its stake sevenfold in the four biggest U.S. airlines.<\/span><\/span>\n<\/p>\n

\n\tIn a regulatory filing, Berkshire reported owning 57.4 million shares of Apple as of Dec. 31, which would now be worth $7.74 billion, up from just from 15.2 million shares in the iPhone maker three months earlier.<\/span><\/span>\n<\/p>\n

\n\tBerkshire also reported a $9.3 billion airline stake, with investments topping $2.1 billion in each of American Airlines Group Inc (AAL.O), Delta Air Lines Inc (DAL.N), Southwest Airlines Co (LUV.N) and United Continental Holdings Inc (UAL.N).<\/span><\/span>\n<\/p>\n

\n\tIt also disclosed new stakes in satellite radio company Sirius XM Holdings Inc (SIRI.O) and seed company Monsanto Co (MON.N), which is being bought by Germany's Bayer AG (BAYGn.DE).<\/span><\/span>\n<\/p>\n

\n\tThough it is unclear who make which investments, the filing appears to reflect much of the $12 billion of stock that Buffett said he had bought between the Nov. 8 Presidential election and the end of January.<\/span><\/span>\n<\/p>\n

\n\tLarger Berkshire investments such as Wells Fargo & Co (WFC.N), Coca-Cola Co (KO.N) and International Business Machines Corp (IBM.N) are normally Buffett's, but the 86-year-old billionaire has given his deputies Todd Combs and Ted Weschler more to invest over the years.<\/span><\/span>\n<\/p>\n

\n\tBerkshire's initial investment in Apple got attention last year, given Buffett's usual aversion to technology companies – apart from IBM – which he considers outside his zone of competence.<\/span><\/span>\n<\/p>\n

\n\tThe new, larger stake makes Berkshire one of Apple's 10 biggest investors.<\/span><\/span>\n<\/p>\n

\n\t"I'm stunned to see the size of that Apple position," said Thomas Russo, who oversees $11 billion of assets, including 12 percent in Berkshire, at Gardner Russo & Gardner in Lancaster, Pennsylvania.<\/span><\/span>\n<\/p>\n

\n\tBerkshire did not respond to a request for comment.<\/span><\/span>\n<\/p>\n

\n\tThe Omaha, Nebraska-based conglomerate also owns roughly 90 companies such as the BNSF railroad, Geico car insurance and Dairy Queen ice cream.<\/span><\/span>\n<\/p>\n

\n\tIts Class A shares closed on Tuesday up $2,078.95 at $250,419, a record high closing price and less than 0.2 percentage points below its all-time high on Dec. 14.<\/span><\/span>\n<\/p>\n

\n\tAPPLE BECOMES CORE HOLDING<\/span><\/span>\n<\/p>\n

\n\tThe plunge into Apple appears particularly well-timed.<\/span><\/span>\n<\/p>\n

\n\tShares of Apple closed on Tuesday up $1.73 at $135.02, also a record closing high.<\/span><\/span>\n<\/p>\n

\n\tAssuming Berkshire has not sold its stake, Apple's 16.6 percent gain this year would leave it with a $1.1 billion paper profit in 2017 alone.<\/span><\/span>\n<\/p>\n

\n\tIt had been widely believed that Berkshire's initial investment came from Combs or Weschler.<\/span><\/span>\n<\/p>\n

\n\tBut their decisions have sometimes influenced Buffett, as when Berkshire last year paid $32.1 billion for aircraft parts maker Precision Castparts Corp, once a Combs investment.<\/span><\/span>\n<\/p>\n

\n\t"It's quite possible that Warren woke up and began to understand the virtues of Apple that he had been neglecting or, like with Precision Castparts, Todd or Ted had an affinity for Apple that sparked interest from Warren," Russo said.<\/span><\/span>\n<\/p>\n

\n\tCombs and Weschler are the leading candidates to eventually succeed Buffett as Berkshire's chief investment officer.<\/span><\/span>\n<\/p>\n

\n\tThe airline investments, meanwhile, suggest that Buffett has overcome his two-decade aversion to the sector after an unhappy – though, he has said, profitable – investment in US Air Group.<\/span><\/span>\n<\/p>\n

\n\tBuffett told talk show host Charlie Rose in an interview last month that it was "in large part" his decision to dive back into airlines.<\/span><\/span>\n<\/p>\n

\n\t"The industry was once balkanized, but now it is bulking up, and has come to realize that an empty seat is a perishable asset," Russo said. "More planes are traveling more full."<\/span><\/span>\n<\/p>\n

\n\tShares of American, Delta, Southwest and United, as well as Apple, Monsanto and Sirius, rose in after-hours trading.<\/span><\/span>\n<\/p>\n

\n\tSuch increases often occur when investors perceive that Berkshire has given a company its imprimatur.<\/span><\/span>\n<\/p>\n

\n\tMonsanto and Sirius did not immediately respond to requests for comment.<\/span><\/span>\n<\/p>\n

\n\tTo make room for new investments, Berkshire appeared to have shed a $1.8 billion stake in agricultural equipment maker Deere & Co (DE.N) and nearly all of what remained from a more than decade-old stake in retailer Wal-Mart Stores Inc <\/span><\/span>\n<\/p>\n

\n\tSource:- http:\/\/www.reuters.com\/article\/us-investment-funds-buffett-idUSKBN15T2VJ<\/span><\/span><\/p>\n

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