Berkshire invests in Ulta Beauty, Heico as it retreats from Apple (updated)

Heico

14/08/2024 22:38

(Adds purchases and sales throughout, Ulta Beauty and Heico
after-hours stock movement, other Berkshire investments)
    By Jonathan Stempel
       Aug 14 (Reuters) - Warren Buffett's Berkshire Hathaway
 BRKa.N  acquired stakes in cosmetics store chain Ulta Beauty
 ULTA.O  and aircraft parts maker Heico  HEI.N  during the
second quarter, when it also significantly cut its huge stake in
Apple  AAPL.O .
    Berkshire owned about 690,000 Ulta Beauty shares worth
$266.3 million and 1.04 million Heico shares worth $185.4
million as of June 30, according to a Wednesday regulatory
filing containing its U.S.-listed holdings as of that date.
    Ulta Beauty shares soared 12% and Heico shares rose 3% in
after-hours trading, reflecting a belief that the companies won
Berkshire's and perhaps Buffett's stamp of approval.
        Wednesday's filing did not say whether Buffett did the
buying, though his portfolio managers Todd Combs and Ted
Weschler normally oversee Berkshire's smaller stock investments.
    Ulta did not immediately respond to requests for comment.
Heico was not immediately available for comment.
    While better known for owning Geico car insurance, the BNSF
railroad and large stock holdings such as Apple, Buffett's
conglomerate has stakes in many consumer and retail businesses.
    Its business portfolio includes brands such as Benjamin
Moore, Dairy Queen, Duracell and Fruit of the Loom, and about
$2.5 billion of stock in grocery chain Kroger  KR.N .
    Ulta has about 1,395 stores in all 50 U.S. states.
    Berkshire is also familiar with the aerospace sector, having
paid $32.1 billion in 2016 for aircraft parts maker Precision
Castparts, still its largest purchase of an entire company.
    Buffett later admitted he overpaid for Precision, which
struggled with falling air travel during the COVID-19 pandemic
and the grounding of Boeing  BA.N  737 MAX jets.
    
    SNOWFLAKE EXIT
    Ulta Beauty and Heico were among Berkshire's few purchases
in a quarter marked by a hasty retreat from stocks.
    Berkshire sold $77.2 billion of stocks during the period,
including about 390 million shares of Apple, close to half its
stake.
    It also exited a nearly $1 billion investment in cloud
computing company Snowflake  SNOW.N  and its remaining stake in
media company Paramount Global  PARA.O .
    Stock purchases totaled just $1.6 billion.
    The selling left Berkshire with $276.9 billion of cash and
equivalents, up from $189 billion at the end of March.
    Buffett's company has not said if it sold more Apple in the
third quarter, though Buffett said in May he expected the iPhone
maker to remain its biggest stock holding by year-end.
    Berkshire has sold more than $3.8 billion of stock in Bank
of America  BAC.N , its second-largest stock holding, in the
third quarter. It stopped selling at least temporarily after the
bank's share price fell 12% from mid-July.
    During the second quarter, Berkshire also reduced its stakes
in Capital One  COF.N , Floor & Decor Holdings  FND.N ,
Louisiana-Pacific  LPX.N  and T-Mobile  TMUS.O , and added to
stakes in Chubb  CB.N  and Sirius XM  SIRI.O .
    Buffett turns 94 on Aug. 30. He has run Berkshire since
1965.

 (Reporting by Jonathan Stempel in New York; Additional
reporting by Allison Lampert in Montreal; Editing by Marguerita
Choy and Jamie Freed)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))