- Buffett’s fund Berkshire Hathaway revealed their $6.7billion stake on Wednesday
- The company’s shares then jumped eight percent after the news
Warren Buffett’s Berkshire Hathaway revealed the name of the company they have a secretive $6.7billion stake in, causing its shares to jump eight percent.
Berkshire disclosed the investment it has been building in insurer, Chubb, over the past nine months in a quarterly filing with the Securities and Exchange Commission.
They revealed they held nearly 26 million Chubb shares at the end of March, giving them a 6.4 percent stake in the company.
Chubb shares then immediately jumped more than seven percent in after-hours trading, peaking at over eight percent to sell for $274.
Shares often soar when Berkshire reveals new holdings, as many investors follow their portfolio closely and trust in companies with Buffett’s ‘seal of approval’.
Warren Buffett’s Berkshire Hathaway revealed a $6.7 billion investment in fellow insurer Chubb on Wednesday
Berkshire had received special permission from the SEC to keep the Chubb investment secret.
Buffett has opted to do this in the past to prevent other investors from copying him before he is finished buying.
He obtained similar SEC permission for Berkshire’s investment in Chevron and former investments in Exxon Mobil, IBM and Verizon in recent years.
The Chubb investment is in line with Berkshire’s typical interests, as the conglomerate have always invested heavily in insurance companies like Geico and General Reinsurance.
Some will now speculate that Berkshire could one day buy all of Chubb.
Berkshire owns many other companies including BNSF railroad, a number of utilities and an assortment of manufacturing and retail companies.
CFRA Research analyst Cathy Seifert said in a note to investors that Chubb is now one of the 10 biggest holdings in Berkshire’s portfolio.
She wrote: ‘We can’t speculate whether Berkshire would pursue an outright acquisition of CB, but we note their business mixes are highly complementary.’
The quarterly filing doesn’t say clearly whether Buffett or one of Berkshire’s two other investment managers made the Chubb investment, but Buffett generally handles all the stakes worth $1 billion or more.
Buffett already revealed some of Berkshire’s most noteworthy moves at the company’s annual shareholders meeting earlier this month.
After the announcement, Chubb shares immediately jumped more than seven percent in after-hours trading, peaking at over eight percent to sell for $274
Berkshire sold off a little over 116 million Apple shares in the quarter – accounting for about 13 percent of its stake – to trim its biggest single investment.
But it still holds nearly 790 million Apple shares, and Buffett told shareholders that he expected the iPhone maker to remain a long-term holding.
Buffett also revealed at the annual meeting that Berkshire had sold off all of its Paramount Global investment at a loss.
That happened after the first quarter ended because Wednesday’s report showed Berkshire still owning more than 7.5 million shares.
Berkshire has also been regularly filing updates as it makes purchases of Liberty Media stock because it holds more than 10 percent of that stock. At the last reports, Berkshire held 70 million Liberty Media Series C shares and more than 35 million Liberty Media Series A shares.
Those stocks track the shares of satellite radio provider Sirius XM holdings and have been selling at what appears to be a discount to Sirius XM shares, according to Morningstar. Berkshire trimmed its stake in Sirius XM during the quarter.
Wednesday’s filing revealed a number of other changes during the quarter, including the sale of all of Berkshire’s remaining 22.8 million HP Inc. shares. It also trimmed its stakes in Chevron and Louisiana Pacific stocks.
Berkshire ended March with $189 billion of cash and equivalents.
