Warren Buffett’s company made some big moves with its investments. Last quarter, they bought shares in Ulta Beauty and Heico, sold their shares in Snowflake and Paramount Global, and reduced their Apple investment by half.
Berkshire Hathaway, Buffett’s company, shared these changes in a report on Wednesday. By the end of June, they had bought around 690,000 shares of Ulta, which was worth $266 million.
Berkshire Hathaway also bought around a million shares of Heico, which made their investment in the electronic equipment company worth $185 million by the end of the quarter.
Buffett Effect Boosts Ulta and Heico Stocks
Berkshire’s investment boosted Ulta’s stock by as much as 16% and Heico’s by 4% in early trading on Thursday, as other investors followed suit. This reaction is often called the “Buffett effect.” Both Ulta and Heico had fallen about a third this year by Wednesday’s close, with Ulta valued at just under $16 billion.
Ulta offers a range of products, including popular and high-end cosmetics like Rihanna’s Fenty Beauty, as well as fragrances, skincare, and hair care items. They sell these products through about 1,400 stores and online.
Warren Buffett and his investment managers, Todd Combs and Ted Weschler, also sold their investments in the cloud-computing company Snowflake and the media company Paramount. At the end of March, these investments were worth about $1 billion and $89 million, respectively.
Apple Crunched
By the end of June, Berkshire Hathaway owned 400 million shares of Apple, the same amount as its stake in Coca-Cola. The company hinted at these Apple sales in its recent second-quarter report, which showed that the value of its largest investment dropped from $135 billion to $84 billion last quarter. They had already reduced their Apple holdings by 13% in the first quarter.
Ulta and Heico are likely picks by Combs and Weschler since Buffett usually makes very large investments. Both companies fit well with Berkshire’s investment style, as they fully own other retailers like Fruit of the Loom and Helzberg Diamonds, as well as the aerospace supplier Precision Castparts.
The sale of Apple shares made up most of Berkshire Hathaway’s $97 billion in stock sales during the first half of the year, while they bought only $4.3 billion worth of stock.
By the end of June, Buffett’s company had a record $277 billion in cash, including $235 billion in short-term Treasury bills—more than what the Federal Reserve holds in T-bills.
Conclusion
Berkshire Hathaway made big changes last quarter. They bought shares in Ulta and Heico, sold off their shares in Apple, Snowflake, and Paramount, and ended up with a huge cash reserve. These moves raised Ulta and Heico’s stock prices, showing Buffett’s influence.
