Berkshire takes huge bite of Apple, boosts airline stakes

Last Updated: Wed, Feb 15, 2017 04:06 hrs
Warren Buffett, chairman and CEO of Berkshire Hathaway, smiles before speaking with Bill Gates (not pictured), at Columbia University in New York

By Jonathan Stempel

NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc was an aggressive buyer of stocks in last year's fourth quarter, nearly quadrupling its stake in Apple Inc and reporting significantly larger holdings in the four biggest U.S. airlines.

In a regulatory filing, Berkshire said it boosted its stake in Apple as of Dec. 31 to about 57.4 million shares worth roughly $6.64 billion, from just 15.2 million shares three months earlier.

Berkshire also disclosed new stakes in seed company Monsanto Co , which is being bought by Germany's Bayer AG , and satellite radio company Sirius XM Holdings Inc . Monsanto and Sirius shares rose after the disclosure.

Though Buffett has long advocated investing for the long-haul, the plunge into Apple appears particularly well-timed.

Shares of Apple closed on Tuesday up $1.73 at $135.02, a record closing high. Assuming Berkshire has not sold Apple, the iPhone maker's 16.6 percent gain this year would leave Berkshire with a $1.1 billion paper profit in 2017 alone.

Berkshire also revealed a more than $9.3 billion year-end bet on airlines, up from $1.3 billion three months earlier, with stakes topping more than $2 billion in each of American Airlines Group Inc , Delta Air Lines Inc , Southwest Airlines Co and United Continental Holdings Inc .

The investment suggests that Buffett has overcome his nearly two-decade aversion to the sector, following an unhappy - though, he has said, profitable - investment in US Air Group.

Buffett told talk show host Charlie Rose in an interview last month that it was "in large part" his decision to dive back into airlines.

Tuesday's filing appears to reflect much of the $12 billion of stock that Buffett said he had bought between the Nov. 8 Presidential election and the end of January, helping whittle down Berkshire's reported $84.8 billion cash stake.

It is unclear how much of the overall buying was conducted by Buffett, or by his deputies Todd Combs and Ted Weschler.

Larger Berkshire investments are normally Buffett's, but the 86-year-old billionaire has given Combs and Weschler more money to invest over the years. They are the leading candidates to eventually succeed him as Berkshire's chief investment officer.

(Reporting by Jonathan Stempel in New York; Additional reporting by Jennifer Ablan and Dan Burns; Editing by Leslie Adler, Bernard Orr)



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