Berkshire Hathaway Inc (BRKa.N) announced on Monday that it had taken a $ 943 million stake in insurance brokerage Aon Plc (AON.N) and sold a large portion of its investments in Chevron Corp (CVX.N) and Wells Fargo & Co (WFC). .NOT).
The changes were disclosed in a regulatory filing detailing Berkshire’s U.S. listed holdings as of March 31.
Berkshire also fully abandoned two smaller holdings, Suncor Energy Inc (SU.TO) of Canada and private label credit card issuer Synchrony Financial Inc (SYF.N).
Sales suggest Buffett and his investment managers Todd Combs and Ted Weschler may be increasingly wary of valuations as stocks regularly hit new highs.
Berkshire sold $ 6.45 billion in shares and bought just $ 2.57 billion in the quarter. It ended in March with a near-record $ 145.4 billion in cash and cash equivalents.
Buffett is “probably in the process of consolidating reserves” for a major acquisition, said Doug Kass, director of Seabreeze Partners Management LLC in Palm Beach, Florida. “He’s clearly in no rush and is sitting on his hands, waiting for the right pitch. “
At Berkshire’s annual meeting on May 1, Buffett said his Omaha, Nebraska-based company would like to spend $ 70 billion or $ 80 billion, but would likely be out of luck until the market delivers. better values.
Berkshire did not immediately respond to a request for comment from Buffett’s assistant.
Aon’s investment extends Berkshire’s bet on insurance brokers, including a stake in Marsh & McLennan Cos (MMC.N) it boosted in the first quarter.
Aon is awaiting regulatory approvals to buy Willis Towers Watson Plc (WLTW.O) for around $ 30 billion and create the world’s largest insurance brokerage firm, ahead of Marsh.
Berkshire has long been known for its insurance holdings, which are overseen by Vice President Ajit Jain, and include Geico auto insurance, general reinsurance and a unit that insures against major and unusual risks.
The sale of Berkshire’s 51% stake in Chevron represented an unusual reversal. Berkshire had not disclosed a new $ 4 billion stake until February, and Buffett even said at the annual meeting that the oil company benefits the company.
“I have no qualms… at least owning Chevron,” Buffett said. “And if we own the whole business, I wouldn’t feel uncomfortable being in this business. “
Less surprising was Berkshire’s revelation that it only owned $ 26.4 million in Wells Fargo shares, up from $ 1.58 billion in December and around $ 32 billion at the start of 2018.
Buffett was unhappy with the bank’s response to a series of scandals about the way its employees treated customers. read more Berkshire has owned Wells Fargo since 1989.
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