Warren Buffett, the chairman and CEO of Berkshire Hathaway, has surprised the investing world yet again. Known for his long-term vision and sharp financial instincts, the Oracle of Omaha recently sold off shares in three major companies: Apple, Bank of America, and Ulta Beauty. The news came through Berkshire Hathaway’s 13F filing with the Securities and Exchange Commission, offering a glimpse into his shifting investment strategy.
Apple: A Two-Thirds Reduction in Buffett’s Crown Jewel
Warren Buffett’s connection to Apple has been legendary, with Berkshire Hathaway previously owning 300 million shares of the tech giant. He once described Apple as one of his company’s “giants,” praising CEO Tim Cook’s leadership and Apple’s strong brand loyalty.
But the third quarter of 2024 brought a surprising shift. Berkshire sold two-thirds of its Apple stake, a significant change for a company Buffett had long considered a “consumer product company” rather than a pure tech play.
During Berkshire’s annual meeting in May, Warren Buffett cited tax concerns as a factor in trimming his position. Analysts like UBS’s David Vogt have also pointed to soft iPhone demand heading into the holiday season and the launch of Apple’s AI-powered features. Despite the reduction, Buffett’s remaining 100 million shares signal that Apple still holds a place in his portfolio.
Bank of America: Parting with a Longtime Holding
Bank of America has been another cornerstone of Warren Buffett’s portfolio for over a decade. His $5 billion investment in 2011 yielded 700 million shares, converted to common stock in 2017 at an average cost of $14 per share.
Starting in mid-July, Berkshire began selling shares of the banking giant, reaping profits at an average price of $41 per share. The move comes after a stellar run for Bank of America, with shares up nearly 39% year-to-date and 55.6% from a year ago.
Though Buffett has always been a fan of the banking sector, this sale shows his willingness to lock in gains when market conditions align.
Ulta Beauty: A Quick In-and-Out
One of the more surprising exits involved Ulta Beauty. Berkshire had invested $266 million in the beauty retailer during the second quarter of 2024, shortly after its stock saw a steep decline. However, by the end of September, Buffett—or his investment managers, Todd Combs and Ted Weschler—sold off 96.5% of this stake.
The decision followed a turbulent few months for Ulta. Analyst Dylan Carden downgraded the stock to “market perform” in November, citing slowing growth in the beauty category and risks of online competition. While Ulta’s strong brand remains a draw, the broader outlook for the sector seems to have influenced the rapid exit.
What Can Investors Learn from Buffett’s Decisions?
Buffett’s actions offer several key lessons:
- Timing Matters
Even long-term investors like Warren Buffett know when to reduce exposure, whether it’s due to valuation concerns or changing market dynamics. - Stay Flexible
While he is known for holding stocks for decades, Warren Buffett doesn’t hesitate to act decisively when necessary. - Follow the Fundamentals
Whether selling Apple due to demand concerns or exiting Ulta in light of industry challenges, Buffett’s moves underscore the importance of understanding a business’s current and future outlook.
A Look Ahead: Domino’s and Pool Corp
While selling these major stocks, Buffett also made notable purchases. Berkshire acquired 1.28 million shares of Domino’s Pizza, valued at $550 million, and over 400,000 shares of Pool Corp., a distributor of pool equipment. Both investments reflect Buffett’s preference for strong consumer brands with what he calls “moats” to protect returns on invested capital.
Final Thoughts
Warren Buffett’s decisions to sell Apple, Bank of America, and Ulta Beauty may seem surprising at first glance, but they align with his disciplined approach to investing. As he famously said, “The most important thing to do if you find yourself in a hole is to stop digging.”
For investors, these moves serve as a reminder to keep emotions in check, focus on fundamentals, and stay adaptable.
What do you think about Buffett’s latest moves? Let us know your thoughts below!