- Buffett’s Berkshire Hathaway fund announced its $6.7 billion stake on Wednesday
- The company’s shares rose eight percent after the news
Warren Buffett’s Berkshire Hathaway revealed the name of the company in which they have an undisclosed $6.7 billion stake, sending its shares up eight percent.
Berkshire disclosed the investment it has made in insurer Chubb over the past nine months in a quarterly filing with the Securities and Exchange Commission.
They revealed that they owned nearly 26 million shares of Chubb at the end of March, giving them a 6.4 percent stake in the company.
Chubb shares then immediately rose more than seven percent in after-hours trading, spiking more than eight percent to sell at $274.
Stocks often rise when Berkshire unveils new positions, because many investors closely monitor their portfolios and trust companies with Buffett’s “seal of approval.”
Warren Buffett’s Berkshire Hathaway on Wednesday announced a $6.7 billion investment in fellow insurer Chubb
Berkshire had received special permission from the SEC to keep the Chubb investment secret.
Buffett has chosen this in the past to prevent other investors from copying him before he has finished buying.
He received similar SEC clearance in recent years for Berkshire’s investment in Chevron and previous investments in Exxon Mobil, IBM and Verizon.
The investment in Chubb is in line with Berkshire’s typical interests, as the conglomerate has always invested heavily in insurance companies like Geico and General Reinsurance.
Some may now speculate that Berkshire could one day buy all of Chubb.
Berkshire owns many other companies, including the BNSF Railroad, a number of utilities, and an assortment of manufacturing and retail companies.
CFRA Research analyst Cathy Seifert said in a note to investors that Chubb is now one of the top 10 holdings in Berkshire’s portfolio.
She wrote: “We cannot speculate on whether Berkshire would pursue an outright acquisition of CB, but we note that their business mixes are highly complementary.”
It’s not clear from the quarterly filing whether Buffett or one of Berkshire’s two other investment managers made the Chubb investment, but Buffett generally manages all holdings worth $1 billion or more.
Buffett has already revealed some of Berkshire’s most notable moves at the company annual shareholders meeting earlier this month.
Following the announcement, Chubb’s shares immediately rose more than seven percent in after-hours trading, peaking more than eight percent to sell at $274.
Berkshire sold just over 116 million Apple shares last quarter (accounting for about 13 percent of its stake) to slim down its largest investment.
But it still owns nearly 790 million Apple shares, and Buffett told shareholders he expected the iPhone maker to remain a long-term holding.
Buffett also announced at the annual meeting that Berkshire had sold all of its investments in Paramount Global at a loss.
That happened after the first quarter ended, as Wednesday’s report showed Berkshire still owns more than 7.5 million shares.
Berkshire has also provided regular updates on its purchases of Liberty Media stock, as it owns more than 10 percent of those shares. According to the latest reports, Berkshire owned 70 million Liberty Media Series C shares and more than 35 million Liberty Media Series A shares.
These shares follow the shares of Sirius XM, a satellite radio provider, and are selling at what appears to be a discount to Sirius Berkshire cut its stake in Sirius XM this quarter.
Wednesday’s filing showed a number of other changes during the quarter, including the sale of all of Berkshire’s remaining 22.8 million shares of HP Inc. It also reduced its stakes in Chevron and Louisiana Pacific shares.
Berkshire ended March with $189 billion in cash and equivalents.