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Form 13Fs, filed quarterly, allow investors to track the buying and selling activity of Wall Street's premier money managers.
Warren Buffett has sold more than 635 million shares of Apple over the last two years (as of June 30) -- and profit-taking may not be the only reason he's selling.
Despite being a net seller of stocks for 11 consecutive quarters, Berkshire's billionaire boss continues to pile into a company that benefits immensely from extended periods of economic growth.
Wall Street is full of well-known money managers capable of spotting a good deal. However, none of these fund managers draws the attention of professional and everyday investors quite like Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) billionaire CEO, Warren Buffett.
The Oracle of Omaha's fame is a direct reflection of his long-term outperformance of the benchmark S&P 500. Whereas the S&P 500 has delivered a respectable aggregate return, including dividends, of almost 43,000% spanning six decades, Buffett has led his company's Class A shares (BRK.A) to a cumulative return of nearly 5,800,000%!
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This nearly 20% annualized return over 60 years has some investors mirroring Buffett's buying and selling activity, which can be done fairly easily with Form 13F filings.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
A 13F is a required filing no later than 45 calendar days following the end to a quarter (Aug. 14 for the June-ended quarter) for institutional investors with at least $100 million in assets under management. It provides investors with a snapshot of which stocks Wall Street's sharpest money managers have been buying and selling.
Berkshire's second-quarter 13F showed that that its billionaire boss is, once again, selling shares of his No. 1 investment holding, Apple (NASDAQ: AAPL). Meanwhile, he piled into an industry-leading company, which has seen its shares skyrocket almost 48,000% (including dividends) since its initial public offering, for a fourth consecutive quarter.
At the midpoint of 2023, Berkshire Hathaway's stake in Apple stood at 915,560,382 shares, which was nearing almost 50% of the value of the investment portfolio Buffett oversees.
Apple checked all the right boxes for the Oracle of Omaha:
Despite checking all the right boxes, Buffett has sold 635,560,382 shares of Apple, representing 69% of Berkshire's position, over the trailing-two-year period (ended June 30). That includes another 20 million shares during the most recent quarter.
Some of this selling activity may represent nothing more than simple profit-taking. During Berkshire Hathaway's annual shareholder meeting in May 2024, Buffett opined that investors would appreciate seeing his company lock in gains while the peak corporate income tax rate was historically low. He specifically referenced Apple when making these comments.
But it's also possible that more nefarious factors are behind the somewhat persistent disposition of Apple stock.
Arguably the biggest issue with Apple is that its growth engine stalled for three years. Although service segment sales have continued to grow by a low-double-digit percentage, physical device sales have struggled until recently.
When Buffett began buying Apple stock in the first quarter of 2016, its shares were regularly trading at a trailing-12-month (TTM) EPS multiple ranging from 10 to 15. As of the closing bell on Aug. 15, Apple's TTM earnings multiple was approximately 35. Berkshire's billionaire boss is a big-time value investor, and it's becoming difficult to justify owning Apple at a multiple of 35 times EPS when its physical device sales haven't been growing. This may explain why Buffett has been liberal with sell button for Berkshire Hathaway's No. 1 holding.
Image source: Getty Images.
Selling stocks has been something of the norm for the Oracle of Omaha of late. Based on Berkshire Hathaway's quarterly operating results, he's overseen the sale of more stock than has been purchased for 11 consecutive quarters, to the tune of $177.4 billion. Apple represents a significant portion of this $177 billion-plus in net-selling activity.
But there have been some sporadic bouts of buying over the past year. More specifically, Berkshire's billionaire chief has been a buyer of pool supplies and related equipment distributor Pool Corp. (NASDAQ: POOL) for four consecutive quarters:
Following two straight quarters of more than doubling Berkshire's stake in Pool Corp., Buffett's company now holds a 9.3% stake.
Pool Corp. speaks to Buffett's long-term ethos. He's angled his acquired assets and Berkshire's $295 billion investment portfolio to take full advantage of the nonlinearity of economic cycles. Buffett understands that recessions and stock market corrections are inevitable but recognizes the U.S. economy spends a disproportionate length of time expanding, relative to contracting. A company tied to pool installation and maintenance is going to logically benefit from these long-winded periods of expansion.
Along these same lines, Pool Corp. generates a significant percentage of its revenue from recurring streams. Once a homeowner puts in a pool, demand for maintenance or repair products tends to be relatively steady, both from homeowners and pool technicians.
Berkshire's billionaire investor is likely also a fan of Pool's capital-return program. Although nothing matches Apple, Pool is allotting a sizable percentage of cash for its shareholders. Through the first six months of 2025, it's spent north of $252 million, combined, repurchasing its stock and parsing out dividend payments.
The one knock against this new-found favorite of Warren Buffett's is that Pool Corp. stock isn't exactly cheap. It's trading at nearly 28 times forward-year earnings, which is pricier than the benchmark S&P 500's forward price-to-earnings (P/E) ratio. While an industry leader with bountiful recurring revenue and a hearty capital-return program does deserve a valuation premium, it's not clear how much additional upside is available for investors by swimming against the proverbial current.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
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