Berkshire Hathaway, Warren Buffet’s company has disclosed that it has bought 9.81 million shares in the Apple technology company.
Warren Buffet Company Buys Apple Shares Worth $1BN
Traditionally, Mr. Buffet has been reluctant to invest in tech stocks, instead preferring value stock. This move to purchase a stake in the iPhone maker company is seen as being very significant.
Over the past year, Apple shares have declined by 30 percent but rose at the start of this week, closing the session at 3.7 percent higher at a price of $93.88 on Monday.
iPhone sales are slowing down and this has had investors concerned about the company’s ability to maintain its large profit levels.
Last week saw Apple take the number two spot after Google for the world’s most valuable company following a slump in Apple shares.
In a statement with Reuters, Steve Wallman, founder at the Wallman Investment Counsel said that the stock was incredibly cheap and that Berkshire has plenty of cash. Wallman has owned Berkshire stocks since 1982 and Apple shares since 2003.
He added, ‘Not much is being discussed about the massive research and development that Apple is doing behind the scene but this will eventually be evident in new products.”
Reports by the Wall Street Journal show that Mr. Buffet did not make investment in Apple shares himself. There is a possibility that his team in charge of picking stocks, which includes Ted Weschler and Todd Combs did it on his behalf. The report indicates that the stock team is looking to invest where Mr. Buffet would not.
Weschler and Combs are each said to manage a portfolio worth $9bn and are in charge of making the smaller investment while Mr. Buffet makes the larger ones.
The latest purchase of Apple stock will make Berkshire Hathaway the 56th largest shareholder at the company. In addition to Apple, Berkshire has invested in IBM with Berkshire increasing its holding at the end of the first quarter.
At a Berkshire annual meeting held in April, Buffet admitted that his company had been slow to invest in the technology industry. He said he does not usually invest in companies that he does not know too much of in terms of how they operate.
Speaking to CNBC, Mr. Buffet said he was looking to help Dan Gilbert, chair of Quicken Loans, to finance a bid for Yahoo.