- Warren Buffett’s Berkshire Hathaway reported fourth-quarter earnings on Saturday.
- The investor’s company was a net seller of shares and had slowed its share buybacks in the previous quarter.
- Berkshire’s operating income jumped 19% as it recovered from the pandemic.
Warren Buffett’s Berkshire Hathaway was a net seller of shares in the fourth quarter of 2021, but reduced its share repurchases in the period, resulting in a slight decrease in its massive cash pile.
The well-known investor’s group spent about $3.4 billion on shares on a net basis last quarter, but sold $3.9 billion, meaning it was a net seller of equities in all four quarters of 2021. It settled shares worth a net $7.4 billion during the course. Last year’s — a fraction of its $331 billion stock portfolio as of December 31.
Buffett’s company spent $6.9 billion on share repurchases last quarter, boosting its stock buybacks to a record $27.1 billion last year and nearly $52 billion over the past two years. However, it has spent only $1.2 billion on buybacks this year as of February 23, suggesting that Berkshire stock may find Berkshire stock less attractive after Buffett’s 6% gain since early January.
Berkshire’s buybacks helped reduce its cash pile from $149 billion to $147 billion last quarter. Notably, Buffett and his team increased their cash and cash equivalents from $45 billion to $85 billion over the past year, while reducing their holdings of Treasury bills from $90 billion to $59 billion. This could indicate that Buffett and his team have soured government bonds, as interest rates are about to rise soon.
The value investor is willing to deploy about $80 billion of Berkshire’s cash. However, they have struggled to spend it, as stocks near record highs, private-equity firms and special purpose acquisition companies (SPACs) have put up takeover prices, and even their own The company’s stock has also become more expensive.
Buffett’s group owns several businesses, including Seas Candies, Geico and BNSF Railroad. Its total revenue rose 12% to $276 billion last year, as sales increased across its insurance, railroad, utilities, energy and other core divisions.
While many of Berkshire’s subsidiaries were affected by supply-chain disruptions caused by the pandemic, the company still managed to increase pre-tax income from its operating businesses by 19% to nearly $32 billion.
Buffett trumpeted Berkshire’s huge stake in insurance businesses, railroads, the Department of Energy and Apple as the company’s “Four Giants” in his annual shareholder letter, which was published alongside fourth-quarter results.
Berkshire’s recent portfolio update showed it made a nearly $1 billion stake in Activision-Blizzard last quarter, and upped Chevron’s position by a third. On the other hand, it decimated several holdings, including AbbVie and Bristol-Myers Squibb.