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Warren Buffett's Berkshire Hathaway Increases Delta Stake During Market Sell-Off

By Lou Whiteman - Updated Mar 3, 2020 at 10:01AM

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Berkshire was putting cash to work as markets fell.

One of Warren Buffett's signature catch phrases is "be greedy when others are fearful." Berkshire Hathaway (BRK.A 3.75%)(BRK.B 4.02%) put Buffett's philosophy to work during last week's market plunge, boosting its stake in Delta Air Lines (DAL 5.55%) following the airline stock's 20%-plus fall.

Airline stocks have been among the hardest hit by the COVID-19-related sell-off, with investors worried that concerns about the novel coronavirus will eat into travel demand heading into the peak U.S. summer vacation season. Many large corporations have also suspended non-essential travel.

A Delta A321 parked at an airport.

Image source: Delta Air Lines.

In a regulatory filing, Berkshire said it bought more than 976,000 shares of Delta last week for about $45.3 million, for an average cost of about $46.40 per share. That's not far from Delta's 52-week low of $44.33 hit last week. The airline's shares have traded as high as $63.44 per share in the last year.

Berkshire holds a basket of airline stocks, but the company's disclosure rules for Delta are different because Berkshire owns more than 10% of Delta's shares outstanding. Investors will find out at the end of the first quarter if Berkshire Hathaway was buying other stocks during the market decline.

Delta had been a big winner for Berkshire Hathaway prior to the coronavirus-related sell-off. It first began buying in 2016, and had a paper gain of more than $4 billion, or nearly 30%, as of last November.

With the latest purchase, Berkshire now owns more than 71.9 million shares of Delta, or 11.1% of the shares outstanding.

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Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
DAL
$31.20 (5.55%) $1.64
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.A
$417,401.43 (3.75%) $15,101.43
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$278.28 (4.02%) $10.76

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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