REUTERS/Rick Wilking
- Warren Buffett's Berkshire Hathaway grew its cash pile to a record $189 billion last quarter.
- Buffett's company added $21 billion to its stash of cash and Treasuries in three months.
- Berkshire slashed its Apple stake by about 13%, fueling $17 billion in sales of stocks.
Warren Buffett's money mountain grew even larger last quarter as the billionaire struggled to find bargains with markets near record highs, and sold stocks at the fastest rate in years.
The famed investor's Berkshire Hathaway raised its stockpile of cash and Treasury bills by $21 billion to a record $189 billion — a 13% increase in just three months.
Buffett's hulking conglomerate revealed that fact in its first-quarter earnings report, published just before the kick-off of its annual shareholder meeting, which has been dubbed "Woodstock for Capitalists."
The centibillionaire and his team only spent $2.7 billion on stocks last quarter, while they dumped $20 billion worth, marking their largest quarterly disposal in several years. They offloaded over $17 billion of shares on a net basis.
Apple, Berkshire's number-one holding, made up "substantially all of the sales," James Shanahan, a senior equity research analyst at Edward Jones, told Business Insider.
The stated value of Berkshire's stake fell from $174 billon at the end of December to $135 billion at the end of March, suggesting that Berkshire sold about 117 million Apple shares or 13% of its stake in the iPhone maker.
Buffett confirmed the disposals during the shareholder meeting, but said he was virtually certain that Apple would still be Berkshire's top holding at the end of this year.
He appeared to rationalize the sale by noting that federal taxes are likely to rise in the years ahead as the government scrambles to service the ballooning national debt, meaning Berkshire will keep a greater share of its profits on Apple if it sells now rather than later.
"I don't think you'll mind the fact that we sold a little Apple this year," he said.
Berkshire's net stock sales totaled $24 billion in 2023, which was a big turnaround from its purchase of $34 billion of stocks on a net basis in 2022.
On the other hand, Buffett deployed $2.6 billion on stock buybacks last quarter — Berkshire's biggest quarterly outlay since he repurchased $4.4 billion worth of the company's stock in the first quarter of last year.
Berkshire spent roughly $9 billion on buybacks last year, and just under $8 billion in 2022, down from over $24 billion in both 2020 and 2021.
The parent company of See's Candies, Geico, and NetJets grew its operating income by 39% year-on-year to $11.2 billion last quarter, as strong growth in its insurance and energy divisions offset lower earnings at the BNSF Railway.
Another major highlight was Pilot Travel Centers. The truck-stop chain, which Berkshire took full ownership of early last year, grew its revenues by 32% year-on-year to $12.5 billion for the period spanning February and March. However, its pre-tax earnings nearly halved to $70 million.