Berkshire Hathaway’s pile of cash and shares jumped 10% in the June quarter to a massive $US346 billion.
That was a rise of $US36 billion from the March quarter. It has grown further in the current quarter with the continuing rise in share prices, especially Apple which is up 25% so far.
The latest quarterly report shows Berkshire held a cash float of almost $US147 billion and its share portfolio was worth over $US199 billion.
The cash float grew in the June quarter, despite a fall in operating profit, revenue and a big write down.
It would have topped $US150 billion had Buffett not used some of the ‘float’ to make the biggest share buyback since 2018 when the company decided to use active capital management to soak up some of the surplus.
The company’s quarterly report, released at the weekend showed the ‘float’ totalled $US146.6 billion cash and short-term investments at the end of the second quarter.
That’s up from $US137 billion at the end of March and $1US22.5 billion at the end of the June 2019 quarter.
Part of the rise was due to Buffett quitting his bet on the US airline industry by selling $US6 billion of stock in the quarter as airline stocks plunged because of the pandemic. The shares were sold for a loss of more than $US4 billion.
Overall, Berkshire sold $US13.6 billion of equity securities in the second quarter, a jump from $US2.1 billion in the first quarter.
It looks from the report that the buyback of $US5.1 billion in the quarter was the largest share investment in the quarter.
That was well above the $US2.2 billion it bought back in the December quarter of 2019.
That took the value of buybacks in the first six months of the year to $US6.7 billion.
Berkshire said the buybacks were made in May and June as Wall Street was rebounding from the massive sell-off in February and March.
Buffett spent some of that cash after the quarter ended. First, he agreed to buy Dominion Energy’s natural gas pipeline and storage business for $US4 billion and take on $US5.7 billion of Dominion debt.
Then Buffett’s company bought roughly $US2.1 billion worth of Bank of America stock in late July and early August to give it control of 11.9% of the bank.
On top of the cash, Berkshire has a huge investment portfolio that is dominated by a near 6% stake in Apple (which alone is worth well over $US100 billion at the moment).
Apple — which is Berkshire’s biggest common stock holding — has nearly doubled since March 23. JPMorgan Chase is up more than 27% over that time period and Amazon has jumped more than 66%.
Apple has a four for 1 stock split coming up later this month which will help make the shares more accessible for smaller investors and drive prices higher – so long as the market holds up.
The portfolio was worth $US175 billion at the end of March and $US228 billion at the end of 2019. That means the value of the portfolio was up almost 20% in the
On June 30, the portfolio was worth around $US199 billion.