- Kevin Lamarque/Reuters
- Warren Buffett’s Berkshire Hathaway racked up a record $122 billion in cash by the end of June as it sold more stock than it bought, cut back on share repurchases, and failed to find a fair-priced acquisition.
- The conglomerate sold $1 billion more stock than it bought last quarter, marking its largest net sale since the end of 2017.
- It bought back $400 million worth of shares, down from $1.7 billion in the first quarter.
- Buffett is keen to make an “elephant-sized acquisition,” but “prices are sky-high for businesses possessing decent long-term prospects,” he told investors earlier this year.
- Watch Berkshire Hathaway trade live.
Warren Buffett’s Berkshire Hathaway racked up a record $122 billion in cash by the end of June as it bought more stock than it sold, cut back on share repurchases, and came up short in its search for worthwhile acquisitions.
Buffett, a billionaire investing guru nicknamed the Oracle of Omaha, wasn’t tempted by US stocks that surged to all-time highs in late June. Instead, his conglomerate sold $1 billion more of stock than it bought last quarter, marking its largest net sale since the end of 2017, according to Bloomberg. It also bought back $400 million worth of shares, down from $1.7 billion in the first quarter.
Berkshire Hathaway’s cash pile has also swelled in the absence of a major acquisition in years.
“We hope to move much of our excess liquidity into businesses that Berkshire will permanently own,” Buffett wrote in his latest letter to shareholders. “The immediate prospects for that, however, are not good: Prices are sky-high for businesses possessing decent long-term prospects.”
That “disappointing reality” means Berkshire Hathaway will likely spend this year buying shares, he wrote, adding that he remains keen to make an “elephant-sized acquisition.”
The stock rally may be pricing Buffett out of some purchases, but it has been positive for Berkshire Hathaway. The value of its equity portfolio jumped 16% to over $200 billion in the first six months of the year. It also realized $1 billion in gains from put options tied to equity indexes in the half. Moreover, higher investment gains pushed its net income up 17% to $14.1 billion last quarter.
Berkshire Hathaway may have just taken a breather.
It build a stake in Apple last year that was worth more than $50 billion at the end of last quarter. It recently raised its holding in Bank of America by 6% to 950 million shares, which are currently worth about $28 billion. Moreover, it has agreed to inject $10 billion in preferred equity in Occidental Petroleum to help finance the oil group’s takeover of Anadarko Petroleum.