Why Berkshire's Stake in Apple Still Matters More Than People Think

The headlines suggest Berkshire Hathaway (NYSE: BRKB) has moved on from Apple (NASDAQ: AAPL). Warren Buffett trimmed the position heavily before stepping down, and new Chief Executive Officer Greg Abel has grabbed attention by piling into Alphabet (NASDAQ: GOOG) shares instead. Look closer, though, and Apple still matters far more than the narrative suggests. It remains Berkshire's single largest stock holding, and the reasons run deeper than the selling implies. Start with the raw size. Even after Berkshire sold roughly a quarter of its stake, cutting the position from about 300 million shares to roughly 228 million, Apple still makes up about 22% of the company's equity portfolio, worth somewhere around $60 billion. That is comfortably the biggest position it owns, larger than American Express (NYSE: AXP) and larger than the new Alphabet stake everyone keeps talking about. Berkshire also sits on an enormous unrealized gain, since Berkshire's cost basis is a fraction of today's price, and the shares throws off a steady stream of dividends every year. Whatever the trimming implied, Apple is not a relic in this portfolio. It is the foundation. Here's the part that caught my eye. Apple spends tens of billions of dollars a year buying back its own stock, steadily shrinking the number of shares in circulation. That matters for Berkshire in a subtle but powerful way. Because the total share count keeps falling, Berkshire's ownership percentage of Apple slowly rises even though it hasn't bought a single new share. Its claim on Apple's future profits quietly grows on autopilot.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool