Raging Bull: Buffett's Berkshire Almost Quadrupled Its Stake In Apple Inc. (AAPL)


Cramer's comment came after Buffett's Berkshire Hathaway almost quadrupled its stake in Apple and increased its stake sevenfold in the four biggest US airlines, according to a fourth quarter regulatory released on Tuesday. Its 57.4 million shares as of that date would be worth about $7.7 billion. It also disclosed year-end stakes worth more than $2 billion each in American Airlines Group Inc, Delta Air Lines Inc, Southwest Airlines Co and United Continental Holdings Inc. He also laid out an argument against investing in airlines again in Berkshire's 2007 annual letter.

Berkshire's first investment with Apple received attention in 2016 given the usual aversion by Buffett for tech companies, with the exception of IBM, which he says are outside his competence zone.

Cupertino-based Apple's stock has soared more than 16 percent this year and climbed to an all-time record this week. At that time, Berkshire bought stakes in several railroads- Union Pacific, Burlington Northern Santa Fe, and Norfolk Southern -before the insurer ultimately bought out BNSF (after which Berkshire unloaded the shares of the two other firms).

The plunge into Apple appears particularly well-timed.

Today the stock is trading at around 14.4 times its estimated forward earnings, which is an even steeper price to pay if Buffett's firm continues to hit the buy button.

The 52-week high of the share price is -0.18% and 52-week low of the share price is 30.36%. In fact, he might deserve little of it. David Kass, a professor at the University of Maryland's Robert H. Smith School of Business who studies Buffett and is a Berkshire shareholder, suspects that one or both of Buffett's chief stock-picking lieutenants, Ted Weschler and Todd Combs, are behind the move into Apple.

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.

Such increases often occur when investors perceive that Berkshire has given a company its imprimatur.



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