Warren Buffett's Berkshire Hathaway will report quarterly results over the weekend. Buffett's annual letter to shareholders is also due on February 24. For over six decades, the annual letter has been a cherished tradition for Buffett and it has evolved into essential reading for investors worldwide.
Berkshire Hathaway's fourth-quarter and full-year 2023 earnings announcement will be keenly watched for any details about the company's "mystery stock" acquisition in the third quarter of last year. The company had asked the US Securities and Exchange Commission (SEC) to keep the investment confidential from public filings.
According to a CNBC report, “the goal is to prevent copycat buyers from also digging into a stock Berkshire is accumulating because the additional demand would raise its price, forcing Buffett & Co. to either spend more or cut back on their planned purchases”.
Dr David Kass, finance professor at Robert H. Smith School of Business, University of Maryland, feels the secret stock could be "JP Morgan Chase (JPM) since Warren Buffett is an admirer of Jamie Dimon and Todd Combs is on its Board of Directors". In a blog post, Kass wrote that Barron’s has guessed that the mystery stock might be Chubb, Morgan Stanley or BlackRock.
Berkshire is up 15% YTD and closing at all-time highs the past few days vs. the S&P 500 which is up only 6%. Perhaps the market is anticipating sharply higher earnings during Q4 along with positive commentary by Warren Buffett in his Letter to Shareholders to be released Saturday
— David Kass (@DrDavidKass) February 23, 2024
In the last quarter of 2023, Berkshire divested 1 crore shares of Apple stock, constituting approximately 1% of its total holdings in the company. This sale is noteworthy given Buffett's reputation for maintaining long-term investments. Despite the divestment, Berkshire retains ownership of over 905 million Apple shares, valued at around $174 billion. This stake accounts for 6% of all Apple shares and one-fifth of Berkshire's entire portfolio.
Filings also showed that Berkshire sold 80 million shares of printer company HP in the fourth quarter of 2023, reducing its holdings by 78%. It also pared off 32% of its holdings in media company Paramount.
Berkshire Hathaway had reported a big jump in third-quarter operating earnings and a record-high cash pile of $157 billion.
Operating income totalled $10.8 billion, up from $7.7 billion, or a 40.6% increase from a year ago.
Berkshire Class A shares have rallied over 15% so far this year.
This will be Berkshire's first earnings report since the passing of Warren Buffett's trusted confidante Charlie Munger in November last year. Munger was Buffett's long-time business partner and Berkshire's vice-chairman since 1978.
Berkshire Hathaway's 2023 annual report to the shareholders will be released on February 24, 2024, at approximately 8 am eastern time (6:30 pm IST).
