Berkshire's cachet hit a new record. What did Buffett do in the third quarter?
Berkshire remains a net seller of shares and does not buy back its own securities on a dip
Berkshire Hathaway, led by CEO Warren Buffett, continued to sell stocks from its portfolio in the third quarter, according to a report released Nov. 1. Here's what the company told investors:
- Berkshire Hathaway's cash on hand rose to $381.7 billion from $344 billion at the end of June, a new record.
- "Berkshire's cash cushion continues to grow because Berkshire remains a net seller of stock. Last quarter, the company sold about $12.4 billion worth of stock and bought about $6.4 billion worth. The company will disclose exactly which shares Berkshire sold and bought during the period in its Form 13-F disclosure in mid-November.
- Despite the rise in cash reserves, Berkshire's net investment income fell 13% to $3.2 billion amid a decline in short-term interest rates.
- Berkshire Hathaway did not buy back its own shares from the market for the fifth consecutive quarter, even though their value fell after news of Buffett's impending departure as CEO.
- The company's operating profit rose 34% year-on-year to $13.5 billion, thanks to a rise in profits from insurance activities during an unusually low level of natural catastrophe claims, Bloomberg notes.
Berkshire Hathaway is now preparing for a change in leadership. In May, Buffett, now 95, announced that after 60 years of service, he will step down as CEO at the end of the year. He will be replaced by Berkshire Vice Chairman Greg Abel. Buffett will remain chairman of the board of directors.
Since Ma, when the upcoming changes were announced, Berkshire Hathaway shares have lost about 12% of their value. Investors fear that the company will lose the so-called Buffett premium - the extra value placed on the stock due to the legendary investor's reputation and his outstanding money management skills. In October, Berkshire Hathaway had its first Wall Street bear - investment bank KBW sent investors a recommendation to sell Berkshire Hathaway shares, warning that the conglomerate could face slower profit growth and loss of investor confidence after Buffett steps down as CEO.
This article was AI-translated and verified by a human editor
