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Why Verizon Stock Climbed Today

By Evan Niu, CFA - Feb 17, 2021 at 1:00PM

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The Oracle of Omaha has accumulated a meaningful stake in the telecommunications juggernaut.

What happened

Shares of Verizon Communications (VZ -0.49%) climbed by as much as 5% on Wednesday after Berkshire Hathaway (BRK.A 1.28%) (BRK.B 1.25%) disclosed a new stake in the company. Warren Buffett's investment holding company filed its quarterly form 13F report showing that it now holds over 146.7 million shares. At 12:45 p.m. EST today, shares were up 4.6%.

So what

A few months ago, when Berkshire Hathaway filed its last 13F, it noted that the regulatory filing omitted some confidential information after getting permission from the Securities and Exchange Commission. The agency can allow institutional investors to file confidentially if the disclosure has the potential to move the market and the investor is still in the process of accumulating a position.

Hans Vestberg discussing 5G on stage

Verizon CEO Hans Vestberg. Image source: Verizon.

Buffett is one of the most widely followed investors in the world, so the market often closely watches his activities, particularly when it comes to newly established positions. The confidential filing triggered considerable speculation in recent months, and investors now know that the telecommunications company was one of the picks.

Now what

Berkshire Hathaway has also now filed an amended 13F for the third quarter, unveiling all of the confidential information. In addition to Verizon, Buffett was also buying stakes in oil giant Chevron and consulting firm Marsh & McLennan during the third quarter. Berkshire Hathaway was holding 58.3 million Verizon shares at the end of the third quarter, meaning that the company bought around 88.4 million shares during the fourth quarter.

Verizon largely fits the type of value stock that Buffett prefers. Big Red trades at low valuations while also paying a generous 4.6% dividend yield funded by consistent cash flows.

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Stocks Mentioned

Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$50.99 (-0.49%) $0.25
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.A
$468,805.04 (1.28%) $5,915.04
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$312.50 (1.25%) $3.86
Chevron Corporation Stock Quote
Chevron Corporation
CVX
$176.59 (0.67%) $1.18
Marsh & McLennan Companies, Inc. Stock Quote
Marsh & McLennan Companies, Inc.
MMC
$157.09 (3.02%) $4.60

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

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