Andrew Bary

Berkshire Hathaway investors should learn on Friday whether the company continued to pare its stakes in Apple and Bank of America in the fourth quarter.

Berkshire, along with most other institutional investors, will disclose its equity holdings for U.S-listed companies in a 13-F filing with the Securities and Exchange Commission. The deadline is Friday and Berkshire's report likely will be released after the close of trading on that day.

The filing will also show any new stock purchases by Berkshire in the period, although investors looking for a big new holding [large addition?] could be disappointed. Berkshire did little buying and a lot of selling of stocks in the first three quarters of 2024. It bought just $5.8 billion of stocks while selling $133 billion, according to its third quarter 10-Q report.

Berkshire sharply cut its holding in Apple during the first nine months of 2024 by about two-thirds to 300 million shares, a 2% stake. The company also reduced its interest in Bank of America by about 25% from July through mid-October to 766 million shares. The Apple sales represented the bulk of Berkshire's equity sales during the first nine months of 2024.

Berkshire watchers probably are more interested in the Apple stake, which has been the company's largest equity investment and its biggest winner in dollar terms. Based on CEO Warren Buffett's comments at Berkshire's annual meeting in May 2024, it's likely that if the Apple stake was cut in the fourth quarter, it remained at 200 million shares or more. Apple shares finished 2024 at $250 and now trade at $228.

At the meeting, Buffett said at "the end of the year, I would think it extremely likely that Apple is the largest common stock holding."

Berkshire's second-largest equity holding is American Express, and that stake of 151.6 million shares totaled about $45 billion at year-end -- assuming no change in the holding. The Apple stake would have to have been about 200 million shares to exceed the value of the Amex interest.

The last filing by Berkshire on Bank of America was in mid-October, when the stake fell below 10%. The company had to file with the SEC for its series of reductions from July through October when the stake was above that threshold.

Barron's has written the Bank of America stake may not fall below 700 million shares, which would be a roughly 9% reduction from the third-quarter stake. That is because Berkshire got those 700 million shares through lucrative warrants issued in connection with $5 billion of preferred stock that it bought from Bank of America about 14 years ago.

The cost basis on those 700 million shares is $7 a share, way below Bank of America's current stock price of $46. Selling those shares would result in a large tax bite for Berkshire.

In the third quarter, Berkshire initiated a $550 million holding in Domino's Pizza, its only notable purchase. That buy likely was done by either Berkshire investment managers Todd Combs or Ted Weschler, who together run about 10% of the $300 billion equity portfolio with Buffett handling the rest.

Stock positions of $3 billion or less often are taken by Combs and Weschler, who operate independently of Buffett.

Write to Andrew Bary at andrew.bary@barrons.com

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February 10, 2025 14:04 ET (19:04 GMT)

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