Berkshire Hathaway, led by Warren Buffett, has recently published its 13F report for the second quarter, unveiling the stocks that the firm has acquired and divested during this time frame. Although Berkshire has been a prominent seller in the stock market, Buffett did invest in two new companies: Heico and Ulta Beauty. Heico operates in the aerospace and defense sector, concentrating on producing niche replacement parts for commercial aircraft along with components for defense applications.
The firm boasts a robust financial standing, usually maintaining minimal debt levels and generating considerable free cash flow. Nevertheless, Morningstar places Heico’s stock value at $173, with actual shares trading significantly above this figure, suggesting the stock may be overpriced. Conversely, Ulta Beauty stands as the leading specialized beauty retailer in the United States.
Though Ulta’s rapid growth phase might have plateaued, the company continues to launch new outlets domestically and internationally, enhance its online sales, and set up shops within Target stores. These strategies are anticipated to help Ulta draw in new clientele and expand its portion of consumers’ yearly beauty expenditures. Morningstar estimates Ulta’s stock value at $405, with shares trading just below this valuation, making Ulta appear to be a more appealing purchase than Heico.
Buffett’s significant investment in Sirius XM Holdings marks one of his most impactful decisions to date. He boosted his shares from 36.68 million to 132.88 million, reflecting a substantial endorsement of the satellite radio entity.
Berkshire’s latest stock purchases
At the conclusion of the second quarter, his holdings were assessed at $376 million. Staying true to Buffett’s typical strategy, he left many of his principal investments unchanged. He continues to hold large stakes in well-established names such as Bank of America, Coca-Cola, Kraft Heinz, American Express, Citigroup, and Moody’s.
These steady holdings illustrate his enduring confidence in these companies’ potential to generate long-term value. Among the more surprising developments were his complete exits from Paramount Global and Snowflake Inc. Buffett previously acknowledged that his investment in Paramount did not pan out as expected, ultimately leading him to offload his entire stake at a loss.
The divestment of Snowflake shares indicates a possible reevaluation of the company’s growth outlook in the data warehousing sector. Additionally, Buffett’s decision to reduce his Apple stake significantly, from 789.37 million shares to 400 million, is notable. Although he had disclosed part of this shift earlier, this substantial cutback indicates a more reserved stance towards one of his flagship investments.
Furthermore, he has trimmed his positions in Chevron, Capital One, Floor & Decor, Louisiana-Pacific Corporation, and T-Mobile US. Among his recent acquisitions, Ulta Beauty seems to offer a more compelling investment opportunity according to Morningstar’s valuation, while Heico appears to be overvalued. Investors are advised to take these valuations and the long-term outlook of both businesses into account prior to making investment choices.
