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Income, Investing, Stocks  | November 10, 2020

Berkshire Hathaway (ticker: BRK/A) appeared to sell about $4 billion of Apple shares (AAPL) in the third quarter, according to disclosures in the company’s 10-Q report released Saturday in conjunction with the company’s third-quarter earnings release.

Berkshire also was a seller of financial stocks and a buyer of industrial stocks in the period, according to the 10-Q. Berkshire’s equity portfolio, which totaled $245 billion on Sept. 30, is overseen by CEO Warren Buffett.

Wall Street soon will learn more about Berkshire’s investment activity in the third quarter when the company’s individual equity holdings on Sept. 30 are released—likely Friday or next Monday.

Berkshire didn’t explicitly say that it sold Apple shares but an analysis of its equity holdings suggests that.

Berkshire held $111.7 billion of Apple stock on Sept. 30, or about 965 million shares based on Apple’s closing price that day of $115.81. On June 30, it held $91.5 billion, or about 1.003 billion shares based on Apple’s split-adjusted stock price of $91.20 that day. This indicates a sale of about 38 million shares, or roughly $4 billion. Berkshire had no immediate comment.

Berkshire’s 10-Q showed that Berkshire bought about $17.6 billion of equities in the third quarter and sold $12.9 billion, for a net purchase of nearly $5 billion.

Based on a comparison of the cost basis of three key groups of stocks in the third-quarter 10-Q with the cost basis of those groups in the second-quarter 10-Q, Berkshire was a net buyer of commercial and industrial stocks and a net seller of financials. The third group is consumer products.

The cost basis of the industrial stocks rose by $15 billion in the third quarter, while the cost basis of the financials fell by around $6 billion, adjusted for disclosed purchases of $2 billion of Bank of America stock (BAC) in the third quarter.

One sale in the third quarter that has been disclosed by Berkshire was roughly $2 billion of Wells Fargo (WFC) as it continued to reduce its holding in the bank.

Berkshire owns over 1 billion shares of Bank of America and around 137 million shares of Wells Fargo. Berkshire also purchased less than $1 billion of Snowflake (SNOW) shares as part of the cloud company’s September IPO.

Buffett could have decided to focus Berkshire’s formerly large and diverse holding of bank stocks into his favorite, Bank of America.

Berkshire may have continued to sell down its stake in JPMorgan Chase (JPM) in the third quarter after cutting it by about 60% in the second quarter to 22 million shares. Berkshire was a large holder of U.S. Bancorp (USB) and PNC Financial Services Group (PNC) on June 30. Berkshire sold out of Goldman Sachs Group (GS) earlier this year.

It’ll be interesting to see which industrial stocks were purchased by Berkshire in the third quarter. One possibility is hard-hit energy stocks. Buffett knows the sector well, with Berkshire having held a stake in Exxon Mobil (XOM) during the past decade.

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