Warren Buffett's Berkshire Hathaway (BRK.B) revealed a large stake in Chubb (CB) when it disclosed its first-quarter holdings in mid-May. Berkshire also made small changes to its investments in Chevron (CVX) and Occidental Petroleum (OXY), exited its position in HP (HPQ) and – as previously reported – cut its stake in Apple (AAPL), among other moves.
But make no mistake: Chubb was the most interesting news to come out of Berkshire's buys and sells. The holding company, of which Buffett serves as chairman and CEO, requested confidential treatment from the Securities and Exchange Commission (SEC) in the third and fourth quarters for one or more of its equity investments.
Speculation over the mystery stock was satisfied after the close on May 15 when a regulatory filing showed that BRK.B amassed a stake of 25.9 million shares in CB, or more than 6% of the property and casualty (P&C) insurer's shares outstanding.
Berkshire requested confidential SEC treatment in order to avoid tipping off other market participants, as they would have bid up the price of CB stock had they known Buffett was buying shares.
Buffett has been investing in the insurance industry since before he took control of Berkshire Hathaway in the mid-1960s. Today, Berkshire runs the world's largest P&C business, with Geico being its best-known brand.
Chubb also fits with Buffett's love of dividends. The insurer has raised its payout annually for three decades, making it one of the best stocks for dependable dividend growth.
Before we get into Berkshire's other moves, it's important to note that Buffett has always run a highly concentrated portfolio. Excluding the holding company's Japanese brokerage stocks, Apple accounts for more than 40% of Berkshire's equity portfolio. Berkshire's top five U.S. equity holdings comprise more than three-quarters of its value, while the top 10 account for more than 90%.
Stocks Warren Buffett is buying
With a weighting of 2.03% as of the end of Q1, Chubb is now Berkshire's 9th largest U.S. holding. The stake of 25,923,840 shares was worth $6.7 billion as of the end of March – and increased in value substantially after Berkshire disclosed its position.
Elsewhere on the buy side of the ledger, Berkshire upped its holdings in Occidental Petroleum by 1.8%, or 4.3 million shares. With more than 248 million shares worth $16.1 billion as of the end of Q1, OXY accounted for 4.9% of the U.S. equity portfolio, or Berkshire's sixth largest holding.
Lastly, Berkshire increased its stakes in the tracking stocks for Sirius XM Holdings (SIRI) – while also reducing exposure to SIRI itself. (More on that below.) At less than 0.9% of the portfolio, the combined position of Liberty Sirius XM Group, Series A (LSXMA) and Liberty Sirius XM Group, Series C (LSXMK) isn't all that immaterial.
Stocks Warren Buffett is selling
As previously reported, Berkshire Hathaway trimmed its stake in Apple – but Warren Buffett adores the iPhone maker as much as ever.
In another previously disclosed move, Berkshire slashed its stake in Paramount Global (PARA) by 88%, or 55.8 million shares. Buffett took responsibility for the ill-fated investment at Berkshire's annual meeting in May. PARA now accounts for just 0.03% of BRK.B's U.S. equity holdings, down from almost 0.3% at the end of the previous quarter.
Perhaps more painful was Buffett's decision to exit Berkshire's stake in HP. HPQ stock looked like a classic Buffett bet when he initiated it two years ago. It didn't work out. BRK.B dumped all its HPQ stock during the first quarter.
Other portfolio housekeeping included Berkshire trimming its stake in Chevron by 2.5%, or 3.1 million shares. Not to worry, though: at 5.9% of the portfolio, the energy giant remains Berkshire's fifth-largest U.S. holding.
Berkshire also cut its stake in Louisiana Pacific (LPX), in this case by more than 6%. At less than 0.2% of the portfolio, LPX is the holding company's 27th largest investment.
Finally, as noted above, BRK.B cut its stake in SIRI by 8.9%, or 3.6 million shares, leaving it with 36.7 million shares worth $142.3 million as of the end of Q1. With a weight of 0.04% in Berkshire's U.S. stock portfolio, SIRI is sort of a rounding error.
