The news is intriguing for shareholders considering an investment in Apple.
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“Apple at the current valuation makes a ton of sense; it’s a consumer-product company more than a tech company”, Jeff Matthews, who has written books on Berkshire, tells Bloomberg.
The filing with the Securities and Exchange Commission showed Berkshire with a holding of 9.8 million Apple shares at a value of around $1.07 billion. Last quarter, Yahoo reported $0.08 in adjusted earnings and $1.09 billion in revenue, both down significantly from the same quarter a year ago.
UBS analyst Steven Milunovich has a target price of $US115 on Apple’s stock and said in a client note last week that financial 2018 was likely to be a “breakout” growth year for the company. Besides Buffett, Berkshire has two other investment managers, who each handle about $9 billion.
“I’m an enormous admirer of Dan and what he has accomplished in Quicken Loans”, Buffett said in an email to CNBC.
Buffett has nearly always stuck with what he knows – investing in everything from soda to carpets, furniture and razors. Buffett offered no immediate comment when reached by telephone.
Apple has been under pressure after reporting recently that sales of the iPhone had fallen for the first time while it also said quarterly revenues had slipped – for the first time in 13 years. That position helped his company, Berkshire Hathaway, avoid the dot-com Internet boom and bust.
Apple’s market value last week dipped below that of Google parent Alphabet Inc even though Apple generates roughly triple the revenue and profit.
On Monday, following news of Buffett’s stake, Apple shares were up $2.94 USA, or more than three per cent, at $93.46 United States in morning trading on Nasdaq.
In Monday’s filing, Berkshire also reported higher stakes in IBM, Bank of New York Mellon Corp, Deere & Co and Visa Inc, and lower stakes in MasterCard Inc and Wal-Mart Stores Inc. The report indicates the number of shares held and the value of each stake at the end of the quarter, so it isn’t clear if Mr. Buffett’s firm has continued buying the stock since the quarter ended. Other prominent investors have retrenched. David Tepper’s Appaloosa Management unloaded its position in the iPhone maker during the first quarter.
“Yahoo is not the type of thing I’d ever be an equity partner in”.
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For a guy known as being a bit averse to investing in tech companies, Warren Buffett seems to be breaking out of his shell.
