Berkshire Hathaway Now Owns The Third Largest Stake of Apple

Famous investor Warren Buffett - Illustration with green triangular shapes in the background.Warren Buffett, who has been extremely averse to investing in technology companies in the past, really, really likes Apple Inc.

Warren Buffett likes Apple so much, in fact, that he elected to purchase another 75 million shares of Apple during the first quarter of 2018.

At the end of 2017, Berkshire Hathaway owned 165.3 million shares of Apple, which means that its total stake now sits at over 240 million shares.

Based on the closing price of Apple on Friday, this means that Berkshire Hathaway's stake in Apple is now valued at $42.5 billion. This gives Berkshire Hathaway the third largest stake in Apple of any company in the world, behind just Vanguard and Blackrock.

Buffett, who has groused publicly about not being able to spend Berkshire Hathaway's $100 billion+ (and growing) pile of cash, has found a way to put at least some of it to work - Apple Inc.


While Apple Inc. may technically be a technology company, there is plenty of Warren Buffett to enjoy.

To start, despite the company's $931 billion market cap, Apple Inc. has a Price to Earnings ratio of just 16.94, thanks to its massive earnings power. Apple posted nearly $14 billion in net income during the past quarter.

Apple also has a massive $200 billion+ stockpile of cash, much of which it is returning to shareholders in the form of buybacks and dividends. Buffett enjoys both of these things, and Apple's cash generation machine should provide much more in the way of capital return in the future.

Also, Apple's brand name and stickiness gives it a massive moat in the electronics and computing space - once a customer has moved over to Apple's products, the company does a phenomenal job in making sure that they never leave.

Thanks to this level of stickiness, Apple maintains a tremendous amount of pricing power. Most people don't think twice about spending over $1,000 on the new iPhone.


There are not too many publicly traded companies that Berkshire Hathaway could (or would) invest over $40 billion of their capital into, though Apple Inc. is certainly one of them.

I have a feeling that Berkshire Hathaway will own Apple shares for a long, long time.

Filed under: General Knowledge

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