We typically don't find out about the stocks Berkshire Hathaway (BRK.A 0.68%) (BRK.B 0.93%) bought and sold until the company files its 13-F with the SEC. For the first quarter of 2023, 13-F filings aren't due until May 15.
However, at Berkshire's widely followed annual meeting, Warren Buffett and his team revealed two stocks the company sold during the first quarter. This was a big contributing factor to the conglomerate's stockpile of cash growing to an all-time high of nearly $189 billion.
The two stocks were sold for very different reasons and had very different outcomes for Berkshire during their time in its massive stock portfolio. Here's what they were, and why Berkshire sold each of them.
Even Warren Buffett doesn't only pick winners
During Berkshire's Q&A session at the meeting, Buffett revealed that Berkshire had sold its entire stake in Paramount (PARA -4.91%). We don't know the exact selling price, but Berkshire owned 63.3 million shares of the entertainment company at the end of 2023, and based on the current stock price, Berkshire's investment would be worth around $816 million.
Since early 2022, when Berkshire bought Paramount stock, it has fallen by 57%.
Buffett revealed that the sale was "100% my decision," and since Berkshire invested, Paramount has cut its dividend, lost a CEO, and generally disappointed investors. In short, streaming services like Paramount+ aren't profitable, and traditional cable and satellite TV services continue to lose subscribers.
Buffett clearly decided that it was in Berkshire's best interest to cut its losses and move on. As Buffett has said, "The most important thing to do if you find yourself in a hole is to stop digging." And this is a perfect example of that principle.
Buffett still loves this stock
The other stock Berkshire sold, and by far the larger of the two sales, is Apple (AAPL 0.02%). The tech giant has been Berkshire's largest stock position for several years, and to be perfectly clear, that is still the case. In the third quarter, Berkshire sold roughly 13% of its stake in Apple, about 116 million shares, and they were sold at a big profit.
As with Paramount, we don't know the exact price Berkshire got for their shares. But based on Apple's share price at the end of the quarter, this translates to nearly $20 billion of proceeds for Berkshire.
However, unlike with Paramount, Buffett made it clear that Apple is still one of his favorite businesses, and he suggested at the annual meeting that the sale was primarily for tax reasons. He could fear higher tax rates in the future, so selling some now could lock in today's rates.
Buffett specifically named Apple as a stock that will probably remain a top holding of Berkshire, even after he's no longer running the investment portfolio. He called Apple an "even better business" than two of his longtime favorites, American Express (AXP 0.62%) and Coca Cola (KO -0.46%).
What to watch
Berkshire Hathaway has been a net seller of stocks in most quarters in recent history, as Buffett has soured on certain companies and industries, such sas airlines and most banks, and generally has said it's difficult to find attractively valued opportunities. And thanks to these two moves, the first quarter continued this trend.
As a final thought, it's worth noting that these aren't necessarily the only stocks Berkshire sold during the quarter, and while we know from the recent first quarter earnings release that Berkshire was a net seller of stocks, there could be some buying activity within the portfolio as well. We'll get more details when Berkshire's 13-F is filed later this month.
