When it comes to apples, Warren Buffett knows his onions.
Buffett, chairman and CEO of Berkshire Hathaway (BRK.A), likes to focus on quality companies.
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The Oracle of Omaha isn't concerned with whether the market will eventually recognize a company' worth.
He is concerned with how well that company can make money as a business.
Buffett will bail on a stock when something better comes along, the company's economics has changed, or a single holding gets too big.
RH (RH) shares took a tumble on May 17 after a 13F filing showed Berkshire Hathaway sold its entire stake in the high-end home furnishings company last quarter.
Meanwhile, the investment conglomerate sold off its shares of Bank of New York Mellon (BK) and US Bancorp (USB), according to the filing, while buying new stock in Capital One (COF).
But Buffett is particularly fond of Apple (AAPL).
"Apple is different than the other businesses we own. It just happens to be a better business," said Buffett during Berkshire's annual meeting, according to Reuters.
An Apple a Day...
He also warned that the "incredible period" for the U.S. economy is coming to an end at the same meeting, but let's accentuate the positive for the moment.
Berkshire revealed a $1 billion stake in Apple in May 2016, and by March 2023 had boosted that stake to $151 billion, accounting for 46% of its $328 billion equity portfolio.
Buffett appreciates high-quality management teams with a strong track record and a history of rewarding their shareholders via dividends payments and buyback, so he's had plenty of nice things to say about Apple CEO Tim Cook.
He views the computer giant less as a technology company and more as a consumer products company with a dominant product, the iPhone, that people want and need.
And, of course, strong financials, particularly low leverage and high margins.
Apple posted better-than-expected second quarter early this month, powered by a surprise boost in iPhone sales, with the tech giant unveiling a new $90 billion share buyback.
Revenue from Apple's key services business -- which includes Apple Pay, iCloud and Apple TV --- rose 5.5% to $20.91 billion.
And the company recently reached a new record as its market capitalization rose to $2.7 trillion.
Long Term Mindset
The Macbook maker's valuation soared this week to beat the entire Russell 2000, an index consisting of small cap companies, for two weeks.
Yes, the Cupertino, Calif. computer company has been the apple of Buffett's eye and his investments are paying off.
"Warren Buffett’s Berkshire Hathaway $BRK.B received $823.5 million in dividends from Apple $AAPL in 2022," Dividend Hero tweeted on May 18.
"Today Warren Buffett's Berkshire Hathaway received a dividend check for $214,832,682 for $AAPL Q2 2023 dividend."
So, how do you like them apples?
"Long term mindset pays off with dividends," one person responded.
"Find a way to make passive income, it'll change your life," another tweet read.
"Warren keeps his active income from Berkshire at $100k or less but his dividends from companies owned by Berkshire in the billions," another person tweeted. "lesson there."
Indeed, there is.
