Warren Buffett’s Berkshire Hathaway placed big bets on home and auto lender Ally Financial in the second quarter and raised bets on iPhone maker Apple despite signs that the recession is starting to weigh on its head. burden on consumers.
The investments, along with the purchase of shares in the video streaming service Paramount Global and the oil and gas groups Occidental Petroleum and Chevron, indicate that Buffett and his investment team continue to bet on the US economy even as the Federal Reserve embarks on a string of sharp interest rate hikes.
Berkshire more than tripled its position in Ally to 30 million shares worth $1 billion at the end of June, according to a securities filing released on Monday. That makes Buffett’s investment team one of the lender’s largest shareholders, with a 9.7% stake, according to data provider Refinitiv.
Berkshire built the first part of its stake in Ally in the first quarter, when it bought just under 9 million shares.
Buffett has long been an important investor in America’s financial sector. His company’s shares in Bank of America and American Express both rank among its five largest holdings. In the first quarter, Berkshire bet on Citigroup with an investment of $2.9 billion.
The shift in Berkshire’s portfolio is closely watched by investors as a gauge of where the “Sage of Omaha” sees value and his views on the health of the economy. America.
He stayed away from the financial sector during the coronavirus pandemic, stock dumping of JPMorgan Chase and Goldman Sachs as lenders began setting aside tens of billions of dollars for potential credit losses.
Ally’s stock rose more than 3% in after-hours trading on Monday, offsetting part of its 25% decline this year.
The filing also shows that Berkshire raised its stake in Apple – the largest investment in the company’s $328 billion stock portfolio – to 3.9 million shares in the second quarter. Berkshire owns about 5.6% of the iPhone maker.
Berkshire also bought 2.3 million shares of Chevron, bringing the value of its stake in the oil group to more than $23 billion; 9.5 million shares of Paramount; and 22.2 million shares at Occidental. Berkshire has revealed additional purchases in Occidental since the quarter ended, raising its stake in the energy company to more than 20%.
Investments in the second quarter marked a significant slowdown for Buffett, who moved positively at the start of the year when stock prices fell. Berkshire bought $6.2 billion worth of stock in the quarter, down from $51.1 billion from January to March.
It also sold $2.3 billion in stock in the second quarter, cutting its stakes in General Motors, US Bancorp and grocery store Kroger, and leaving its positions at Verizon and Royal Pharma.
This month, Berkshire revealed that it switched to buying its own shares in June, a move it typically makes when its investment managers think investments are more attractive – including including a multi-billion dollar corporate takeover and the purchase of high-priced publicly traded stock – the offer was not taken.