Warren Buffett's Berkshire Hathaway Inc. (BRK.A) reported its third-quarter holdings on Wednesday, offering a look into how the billionaire investor has decided to put the conglomerate's more than $100 billion in cash to work through stock purchases and buybacks as it struggles to find large acquisitions. The Q3 filing represented Berkshire's most net purchases of stocks in one period in over four years and reaffirmed the "Oracle of Omaha's" confidence in the U.S. banking sector, which now accounts for roughly half of the company's top positions.
Berkshire Now a Major Shareholder in Four of Five Biggest US Banks
The Street has been turning more bullish on banking stocks in the recent period, viewed as benefiting from rising interest rates, corporate tax cuts, and a strong economic backdrop.
The billionaire investor and philanthropist's firm added over $13 billion in bank stocks to its portfolio in the recent quarter, making Berkshire a major shareholder in four of the five largest U.S. banks. The conglomerate disclosed a new stake in JPMorgan Chase & Co. (JPM), PNC Financial Services Group Inc. (PNC) and insurance play Travelers Companies Inc. (TRV) and added to its position in Bank of America Corp. (BAC) by 29% and Goldman Sachs Group Inc. (GS) by 38%.
The 88-year-old legendary value investor has been doubling down on the financial sector over the years, nearing a regulatory cap with a 10% stake in Wells Fargo Corp. (WFC). Berkshire is now also the largest shareholder in Bank of America, U.S. Bancorp (USB) and Bank of New York Mellon Corp. (BK), upping its stake by 24% and 20% respectively. Berkshire also recently disclosed an investment in lesser-known Brazilian fintech company StoneCo Ltd. (STNE).
Berkshire's new $4 billion stake in Wall Street giant JPMorgan, with 35 million shares, strengthens an existing tie between Buffett and the financial institution. Earlier this year, Buffett announced a partnership with Amazon.com Inc.'s (AMZN) Jeff Bezos and JPMorgan's Jamie Dimon to launch a joint healthcare venture aimed at improving healthcare efficiency and lowering costs for employees. One of Buffett's top deputies, Todd Combs, is already on JPMorgan's board of directors.
One of Berkshire's new investments rests outside of the financial sector, with tech titan Oracle Corp. (ORCL) as the exception. Buffett's newfound interest in the tech space, after decades of avoiding the sector, was reflected in Berkshire's growing stake in Apple Inc. (AAPL), now the largest holding in the conglomerate's more than $207 billion stock portfolio.
Berkshire also notably ended it's over two-decade relationship with Walmart Inc. (WMT), the world's largest retailer.