Buffett puts icing on Apple’s week

Buffett puts icing on Apple’s week
Tim Cook, Apple.

Berkshire Hathaway bought 75m additional Apple shares in the first three months of the year, CEO Warren Buffett told CNBC, aggressively ramping up its bets on the iPhone maker.

Buffett’s Apple commitment over the past two years has surprised many, given his historical aversion to companies associated with the technology sector.

The news capped an astonishing week for Apple, which started out with huge fears over iPhone sales, but ended with the shares climbing 11% over five days, to value the Apple at $900.4bn (€751.4bn).

Berkshire’s initial investment in Apple was small, suggesting it was made by one of Buffett’s investment deputies, but with the latest stake purchase, it has grown to a solid 240.3 million shares worth $42.5bn.

“If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States,” CNBC quoted Buffett as saying.

The billionaire investor recently sold out of an unsuccessful investment in IBM, at the same time he was buying Apple. Berkshire said in February, Berkshire’s Apple stake rose by about 23% since the end of September to roughly 165.3 million shares.

Buffett has praised Apple chief executive Tim Cook and suggested he views Apple more as a consumer company, despite its Silicon Valley pedigree.

However, there may also be another reason for the investment: Berkshire’s cash position.

Berkshire has gone more than two years since a major acquisition, and Buffett said in his annual letter that he wants one or more huge non-insurance acquisitions to help him reduce Berkshire’s near €98bn in cash and equivalents.

Buying Apple accomplishes that, even though Buffett would rather buy whole companies than their stocks. Berkshire typically discloses its largest common stock holdings and percentage stakes in its quarterly and annual reports.

The report for the first quarter is scheduled for release this morning, just before Berkshire’s annual shareholder meeting in its Omaha, Nebraska hometown.

Apple reported $61.1bn in revenue for the March quarter, up from $52.9bn last year, and promised $100bn in additional stock buyback.

The idea that you’re going to spend loads of time trying to guess how many iPhone X are going to be sold in a three-month period totally misses the point,” Buffett told CNBC in the interview. “It’s like worrying about the number of BlackBerrys 10 years ago.

He said that Apple has “a wide, wide gap. I mean it’s an amazing business”.

Reuters and staff of Irish Examiner

More on this topic

Irish Apple reseller Compu B buys rival UK firmIrish Apple reseller Compu B buys rival UK firm

Apple no longer using contractors to listen to Siri recordings, Dáil committee hearsApple no longer using contractors to listen to Siri recordings, Dáil committee hears

Apple reveals most popular App Store downloads in the UKApple reveals most popular App Store downloads in the UK

Apple criticised over change to Maps app which shows Crimea as Russian territoryApple criticised over change to Maps app which shows Crimea as Russian territory

More in this Section

Unrealistic for UK to complete trade deal with Brussels by end of 2020 – BarnierUnrealistic for UK to complete trade deal with Brussels by end of 2020 – Barnier

Druids Glen Hotel profits climb 51%Druids Glen Hotel profits climb 51%

Federal Reserve leaves benchmark rate the sameFederal Reserve leaves benchmark rate the same

Celtic Pure placed into liquidationCeltic Pure placed into liquidation


Lifestyle

Fr Brian D’Arcy was born nearEnniskillen, Co Fermanagh in 1945.A Question of Taste with Fr Brian D'Arcy

About a year ago Aitch, real name Harrison Armstrong, dropped out of school to start working with his grandfather as a labourer in Manchester.Rapper Aitch on quitting his job to pursue music full-time

A new book delves into the details of Harry Clarke’s stained glass windows in such places as Dingle and Cork, writes Marjorie Brennan.The book that delves into the details of Harry Clarke's stained glass windows

They’re the best air purifiers around so we should grow more houseplants all year round, says Peter Dowdall.Not just for December: The reason why she should grow more houseplants all year round

More From The Irish Examiner