Buffett, the "stock god", leads the... $Berkshire Hathaway-A (BRK.A.US)$ The Q2 holding report is finally released!
As shown in the document, as of the end of the second quarter, Berkshire's overall holding scale was about 280 billion US dollars, a decrease from the previous quarter's 332 billion US dollars, and the concentration of the top ten heavy positions was 90%.
According to the financial report, Buffett substantially reduced his biggest bet on the technology industry - $Apple (AAPL.US)$ He reduced his holdings by more than 0.389 billion shares that quarter, with a market value of about 82 billion US dollars, a decrease of 49.3% from the previous quarter, and the proportion in the investment portfolio dropped by more than 10 percentage points to 30.09%, but it is still his largest holding.
Buffett hinted at the Berkshire Hathaway annual meeting in May that the reduction of Apple holdings was due to tax reasons. He pointed out that if the US government wants to make up for the continuously increasing fiscal deficit and raise capital gains taxes, then this year's "minor sale of Apple" will benefit Berkshire Hathaway shareholders in the long run.
In terms of the increased market value of shareholding, Berkshire's largest increase in holdings in the second quarter was $Occidental Petroleum (OXY.US)$ He added 7.26 million shares that quarter, with a market value of 0.458 billion US dollars, and the shareholding ratio reached 5.75%.
The stock that Berkshire Hathaway increased the third most in the second quarter was the cloud computing company Salesforce.com, with an increase of nearly 0.986 million shares and a market cap of approximately $0.279 billion in the quarter. The number of shares held increased by approximately 1.2% compared to the previous period. $Chubb Ltd (CB.US)$ He added nearly 1.11 million shares that quarter, with a market value of about 0.283 billion US dollars, and the number of shares held increased by about 4.3% over the previous quarter. Chubb Ltd. was a "mystery position" disclosed by Berkshire just last quarter.
In addition, it is worth mentioning that Buffett's holdings have two new faces in the second quarter, namely the largest beauty retailer in the United States, $Ulta Beauty (ULTA.US)$ , and the aviation, aerospace, and electronics company $Heico-A (HEI.A.US)$.
Berkshire bought 0.69 million shares in that quarter, worth about 0.266 billion US dollars.$Ulta Beauty (ULTA.US)$ With a market cap of approximately 0.266 billion US dollars. It is worth noting that this company's performance has been weak this year, with a cumulative decline of nearly 33% year-to-date. However, stimulated by news of Buffett's positions, the company's stock surged over 12% during trading today, currently up over 10%.
William Blair analyst Dylan Carden pointed out that from a valuation perspective, Ulta Beauty's stock price has fallen to multi-year lows. Based on key indicators such as P/E ratio, the company's valuation appears particularly cheap, which is in line with Buffett's value investment philosophy.
At the same time, Ulta's gross margin reached 39% in the first quarter, indicating strong pricing power and cost control.
From the perspective of free cash flow, Ulta announced a $2 billion share buyback plan in March, with $1.8 billion remaining as of May 4, or a dividend may be announced this year.
In addition, Ulta Beauty's unique market positioning covers a wide range of demands, from mass-market cosmetics to high-end brands, which may also be one of the factors that attracted Buffett's attention.
Interestingly, the century-old British asset management giant Baillie Gifford also bought into the cosmetics giant $e.l.f. Beauty (ELF.US)$.
The two top institutions unexpectedly bought beauty stocks in the second quarter. Some market analysts believe that this may represent their bet on the "lipstick effect" and may represent their outlook for the US stock market economy in the future.
The lipstick effect refers to the fact that consumers prefer to buy lower-priced luxury goods in the face of financial crises. For example, people will give up buying expensive handbags or fur coats and choose more expensive cosmetics, such as high-end lipsticks.
Some analysts believe that Buffett's choice to build positions at present or attach importance to Ulta's defensive properties in the economic environment. In the context of the weak US economy, Ulta can often rely on its full price range from low to high to meet the trend of consumer demand for low-priced consumer goods. The "lipstick effect" brought about by the weak economy may reduce consumers' large expenditures and increase consumption of small luxury goods (such as cosmetics), thereby promoting the revenue of Ulta.
Mooers,
What do you think of Buffett's portfolio reshuffle this time?
Feel free to leave your thoughts in the comments section~
Editor/Somer