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Warren Buffett’s Berkshire Hathaway on Tuesday announced two major new investments, revealing an $8.6 billion stake in the phone company Verizon Communications and a $4.1 billion stake in oil company Chevron.
The investments were disclosed in a regulatory filing detailing Berkshire’s U.S.-listed stock holdings as of Dec. 31.
Berkshire also disclosed a new $499 million stake in the professional services company Marsh & McLennan.
To make room, Berkshire pared its investments in several companies including Apple, though at approximately $121 billion the iPhone maker remains by far its largest common stock holding.
Verizon shares rose 3 percent, Chevron rose 2.2 percent and Marsh was unchanged in after-hours trading following Berkshire’s filing.
Tuesday’s filing signals where Buffett and his portfolio managers Todd Combs and Ted Weschler see value, though Buffett normally handles larger investments.
It also shows Berkshire is finding ways to deploy its cash hoard, which totaled $145.7 billion as of Sept. 30.
The Omaha, Nebraska-based conglomerate owns more than 90 businesses including Geico car insurance, BNSF railroad and Dairy Queen ice cream, but has gone five years since its last big takeover, a $32.1 billion purchase of Precision Castparts.
Berkshire had begun investing in Verizon, Chevron and Marsh by last year’s third quarter, and had won Securities and Exchange Commission permission to delay revealing the stakes.
The SEC has several times over the years let Berkshire quietly invest in companies, to avoid having investors piggyback on Buffett’s wagers and drive up the companies’ stock prices before Berkshire is done buying.
Tuesday’s filing showed Berkshire, a major investor in Bank of America, cutting back on smaller banking rivals, reducing its stake in Wells Fargo and shedding JPMorgan Chase, M&T Bank and PNC Financial Services Group Inc.
Berkshire also invested more in drugmakers Abbvie, Bristol-Myers Squibb and Merck & Co. while selling a small stake in COVID-19 vaccine maker Pfizer Inc. It also shed mining company Barrick Gold Corp.
Doug Kass, managing partner of Seabreeze Capital Investment in Palm Beach, Florida, said the Verizon stake “makes sense” for Berkshire, reflecting the phone company’s dividend payouts and prospects for wireless revenue growth.
The lowered bank stakes may reflect Buffett’s concern about persistent low interest rates, and loan losses related to the coronavirus, Kass added.
Berkshire should provide more details on its investments when it releases year-end results and Buffett’s annual shareholder letter on Feb. 27.
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