Berkshire Hathaway kept secret a billion-dollar stock investment in the third quarter, and that mystery stock could be revealed when the company reports its fourth-quarter equity holdings Wednesday.
Barron’s best guess is that assuming that Berkshire Hathaway bought just one stock in the third quarter, the target may be Morgan Stanley, BlackRock, or Chubb. Berkshire Hathaway presumably began buying the stock in the third quarter, and asked the SEC for the target to be kept secret so it could continue accumulating the stock in the fourth quarter without other investors pushing the stock higher.
Investors also will be interested to see any new Berkshire Hathaway purchases—and sales—in the fourth quarter aside from the mystery stock. Berkshire Hathaway wasn’t an active buyer of stocks in the first three quarters of 2023, purchasing about $9 billion, and selling nearly $33 billion. This suggests another quarter of relative inactivity in the fourth quarter.
Newsletter Sign-up Morgan Stanley might appeal to Buffett because the firm’s main driver is wealth management, making its earnings less vulnerable to the economy than those of banks. Morgan Stanley stock, at around $85, trades for 14 times projected 2024 earnings, a premium to the group, and yields about 4%.
Chubb is one of the largest and best-run property and casualty insurers. Buffett knows it well, given Berkshire’s 50-plus year involvement in the industry. Chubb stock at around $248 trades for 11 times projected 2024 earnings.
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