The company currently pays a quarterly dividend of $.57 per share, and that’s not an insignificant amount of money since Berkshire Hathaway now holds 9.81 million shares of Apple.
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Warren Buffett listened to his own advice, as he became greedy about Apple Inc.’s stock just as some other high-profile investors were becoming fearful.
Berkshire held US$1.6 billion of AT&T at the end of a year ago.
Before Monday, shares of Apple had fallen by one-third from their April 2015 peak.
The investment deepens Berkshire’s commitment to the technology sector, which Buffett has largely shunned apart from a big stake in International Business Machines Corp, which grew slightly in the first quarter. His only other major tech investment is in IBM, where Berskhire is the largest shareholder, owning about 8% stake in the company that is now worth about $12 billion.
Asked why he had bought IBM shares rather than Apple or Google at Berkshire Hathaway’s 2012 shareholder meeting, Buffett said: “The chances of being way wrong in IBM are probably less, at least for us, than the chances of being way wrong in Google or Apple…”
Apple shares are down 14 percent so far this year, and Buffett himself has already taken a loss on the purchase as shares are now valued at just over $90.
And another billionaire investor, Carl Icahn, recently disclosed that his firm has sold its entire stake in Apple due to concerns about competition in China.
There’s been talk for quite some time that Apple is no longer a growth stock but rather now a value stock, and Buffett’s interest certainly backs this view as he is considered one of the world’s most respected value investors.
Should You Invest in Apple Stock?
A $1 billion stake, if the stake really was taken by either Ted Weschler or Todd Combs, is larger than either portfolio has been able to make for routine trades.
According to a separate report from Reuters, which was subsequently confirmed by CNBC, Quicken’s Gilbert is among the interested bidders, and he has a huge name ready and willing to serve as his potential financial backing – Warren Buffett.
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On Monday, following news of Buffett’s stake, Apple shares were up $2.94 United States, or more than three per cent, at $93.46 U.S. in morning trading on Nasdaq.
