Warren Buffett’s Berkshire Hathaway announced two major new investments on Tuesday, revealing an $ 8.6 billion stake in the telephone company Verizon Communications and a $ 4.1 billion stake in oil company Chevron.
The investments were disclosed in a regulatory file detailing Berkshire’s US-listed equity positions as of December 31.
Berkshire also announced a new $ 499 million stake in professional services company Marsh & McLennan.
To make room, Berkshire cut its investments in several companies, including Apple, although the iPhone maker remains by far its largest share of common stock at around $ 121 billion.
Verizon stock was up 3 percent, Chevron 2.2 percent, and Marsh remained unchanged in out-of-hours trading after Berkshire’s filing.
Tuesday’s filing indicates that Buffett and his portfolio managers Todd Combs and Ted Weschler see value, although Buffett normally handles larger investments.
It also shows Berkshire finding ways to use its cash supply, which totaled $ 145.7 billion as of September 30.
The Omaha, Nebraska-based conglomerate owns more than 90 businesses, including Geico auto insurance, BNSF railroad, and Dairy Queen ice cream, but has been five years since its last major acquisition, a $ 32.1 billion purchase from Precision Castparts.
Berkshire had started investing in Verizon, Chevron and Marsh by the third quarter of last year and had received clearance from the Securities and Exchange Commission to delay the disclosure of the stakes.
The SEC has had Berkshire quietly invested in companies several times over the years, to prevent investors from hitching a ride on Buffett’s and pushing up the companies’ stock prices before Berkshire has finished buying.
Tuesday’s filing revealed that Berkshire, a major investor in Bank of America, is cutting back on smaller bank rivals, shrinking its stake in Wells Fargo, and JPMorgan Chase, M&T Bank and PNC Financial Services Group Inc.
Berkshire also invested more in drug makers Abbvie, Bristol-Myers Squibb and Merck & Co., while selling a small stake in COVID-19 vaccine maker Pfizer Inc. It also lost mining company Barrick Gold Corp.
Doug Kass, managing partner of Seabreeze Capital Investment in Palm Beach, Florida, said the Verizon interest “makes sense” for Berkshire as it reflects the phone company’s dividend payments and the outlook for wireless revenue growth.
The reduced bank holdings may reflect Buffett’s concerns about the continued low interest rates and credit losses associated with the coronavirus, Kass added.
Berkshire should provide more details on its investments when it releases its annual results and Buffett’s annual shareholder letter on Feb. 27.