Berkshire Hathaway's recent mysterious stock purchase has attracted much attention, and the market generally speculates that the stock may be a financial giant.
$Berkshire Hathaway-A (BRK.A.US)$/$Berkshire Hathaway-B (BRK.B.US)$The “mystery” stocks that began to accumulate in the second half of 2023 may be revealed when their first-quarter stock holdings are announced on Wednesday (probably after the market closes).
According to information disclosed in Berkshire Hathaway regulatory documents (including first-quarter earnings reports released in early May), the stock is likely to be a financial stock. Barron's speculation might be$Blackrock (BLK.US)$,$Morgan Stanley (MS.US)$or$Chubb Ltd (CB.US)$. Berkshire Hathaway CEO Warren Buffett did not reveal the stock at the company's annual meeting on May 4.
This or more of these mysterious companies is likely to belong to the financial industry, as the cost base of financial stocks held by Berkshire has risen by about $5 billion over the past three quarters, while the cost base of the other two types of stocks has declined. Furthermore, Berkshire Hathaway did not disclose any large-scale purchases of financial stocks in the third and fourth quarters of 2023.
The $5 billion new holding is notable, but not significant compared to Berkshire Hathaway's approximately $370 billion stock portfolio size or $890 billion market capitalization. Berkshire's biggest stock investment is$Apple (AAPL.US)$The total amount is approximately 145 billion US dollars.
Every quarter, Berkshire Hathaway and other US stock institutional holders submit 13-F documents to the US Securities and Exchange Commission detailing their holdings.
Berkshire Hathaway stated in the fourth-quarter 13-F filing: “The manager omitted one or more holdings in this public 13-F form and requested the SEC to treat them confidentially...”
Compared to other large investors, Berkshire makes more use of confidential filings, including purchases at the end of 2020$Chevron (CVX.US)$und$Verizon (VZ.US)$The stock.
Even if Berkshire Hathaway sought confidential treatment, it was unusual to receive another quarter of confidential treatment. This means that the mystery stock is likely to be revealed on Wednesday, and Berkshire Hathaway will disclose the stock in its 13-F filing of US equity holdings as of March 31. If Berkshire discloses this stock, it is likely that the filing documents for the third and fourth quarters of last year will be amended to include this stock.
Morgan Stanley is likely to attract Buffett because the company's main business is wealth management, which makes its profits less sensitive to the economy than banks. The share price of Morgan Stanley is around $98, 14 times the expected earnings in 2024, a premium over the group, and the yield is over 3%.
The stock price of BlackRock, the largest investment management company in the world, is about $797, which is 19 times the expected return in 2024, with a yield of 2.5%. Under the leadership of CEO LarryFink, the company has established a leading position in exchange-traded funds and bonds.
However, Buffett's value orientation is value investing, and BlackRock's stock is probably too rich for him. Buffett is inclined to pay 15 times the price-earnings ratio or less to buy stocks.
$Chubb Ltd (CB.US)$It is one of the largest and best-operating property insurance companies. Given Berkshire's involvement in the industry for over 50 years, Buffett knows it very well. Chubb's stock price is around $254, which is 12 times the expected earnings in 2024.$American International Group (AIG.US)$Another possible insurance stock, with a share price of around $79, 11 times the expected earnings in 2024.
$Charles Schwab (SCHW.US)$The stock price is approximately $75, which is more than 20 times the expected earnings in 2024. EdwardJones analyst Jimshanahan believes that Charles Schwab may be a mystery stock. Carson Wealth Management's stock price has lagged behind the market in recent years.
Editor/Jeffrey