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Berkshire Hathaway Now Holds Over $52 Billion in Apple Stock

By Evan Niu, CFA – Updated Aug 15, 2018 at 4:04PM

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The conglomerate scooped up 12.4 million Apple shares in the second quarter.

Famed investor Warren Buffett loves Apple (AAPL 0.95%) stock, recently saying he'd "love to own 100% of it." But with Apple's total market cap recently surpassing $1 trillion, not even the Oracle of Omaha has that kind of money. But ever since first investing in Apple in 2016, Berkshire Hathaway (BRK.A -0.45%) (BRK.B -0.45%) has steadily increased its holdings nearly every quarter since. The conglomerate is more aggressive in its purchases in some quarters, while more modest in others.

Berkshire just bought 12.4 million more shares in the second quarter, according to regulatory filings.

Tim Cook holding up the billionth iPhone in front of Apple employees

Apple CEO Tim Cook. Image source: Apple.

252 million shares and counting

After scooping up another 12.4 million shares, Berkshire now owns nearly 252 million Apple shares. That position was worth approximately $46.6 billion at the end of the second quarter -- except shares have gained 13% since then, pegging the current value of Berkshire's position at roughly $52.9 billion at current levels.

Chart showing Berkshire's Apple position over time

Data source: SEC filings. Chart by author.

Berkshire's purchases in the second quarter were actually on the modest side, especially compared to the 74.2 million shares that it bought in the first quarter or the 31.2 million shares it acquired in the fourth quarter.

Chart showing Berkshire's Apple purchases over time

Data source: SEC filings. Chart by author.

Buffett now holds a little over 5.2% of all Apple shares outstanding, a stake that the investor has noted would actually rise eventually even "without laying out another dollar." That refers to Apple's monstrous share repurchase programs, which gradually reduce shares outstanding over time, delivering earnings accretion to long-term investors like Buffett. The Mac maker just got to work on a fresh $100 billion buyback authorization after completing the prior $210 billion program.

Apple is still cheap

The news comes as David Einhorn's Greenlight Capital, another prominent institutional shareholder that once advocated for a class of perpetual preferred shares, disclosed that it had cut its Apple position by nearly 80% in the second quarter.

While Einhorn and Buffett are moving in different directions with their Apple investments, both are value investors at heart. One of the most astounding aspects of Apple's $1 trillion market valuation is the fact that the company still trades at a meaningful discount to the S&P 500. Even following the rally after its second-quarter report, shares are currently trading at 19 times earnings, compared to the broader market's P/E ratio of 24.4.

Generally, Buffett likes to keep his stakes in most companies under 10% in order to avoid heightened regulatory scrutiny. At 5.2% currently, Berkshire still has plenty of room to keep scooping up Apple shares.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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