Today’s News
Warren Buffett’s Berkshire Hathaway has disclosed a significant investment in Chubb, unveiling a USD 6.7 billion stake in the insurance company.
Image Source: Barron’s
Warren Buffett’s Berkshire Hathaway has revealed a significant investment in Chubb, resolving a mystery that had intrigued many followers of the company. According to a regulatory filing made public after the market closed on Wednesday, Berkshire’s stake in the insurer was valued at USD 6.7 billion at the end of March. This gives Berkshire ownership of 6.4% of Chubb, as per Dow Jones Market Data. The filings were amended to show that Berkshire began building this position in the second half of 2023.
Chubb, a leading property-casualty insurer, is headed by Evan Greenberg, the son of former AIG CEO Maurice “Hank” Greenberg. Recently, Chubb was in the spotlight as the insurer of the collapsed Francis Scott Key Bridge in Baltimore. Insurance remains a core business for Berkshire, which also owns Geico and several other insurance companies. Buffett emphasized this in his latest letter to shareholders, stating, “Property-casualty insurance (‘P/C’) provides the core of Berkshire’s well-being and growth.”
Chubb’s shares have risen 12% this year, slightly outperforming the S&P 500’s 11% gain. The stock looks attractively priced, trading at 11.3 times its projected earnings over the next 12 months, compared to 20.6 times for the S&P 500 and 15.3 times for the financial sector, according to FactSet.
In the same filing, Berkshire disclosed that it had sold off its position in HP during the first quarter and significantly reduced its holdings in Apple earlier in 2024. Despite reducing its stake by about 13%, Berkshire’s position in Apple remained substantial, valued at USD 135.4 billion at the end of March.
The disclosure comes shortly after Berkshire’s annual meeting in Omaha, where Buffett praised Apple, calling it “an even better business” than American Express and Coca-Cola, two major holdings in Berkshire’s portfolio. He hinted that tax considerations might have influenced the decision to sell some Apple shares. Despite this, shareholders had noted with interest as Berkshire’s Apple stake had grown to nearly half of its stock portfolio by year-end.
Additionally, the filing indicated that Berkshire had sold approximately 2.5% of its Chevron shares and exited its position in Paramount Global. Buffett acknowledged the loss from the Paramount investment, stating, “We’ve sold it all, and we lost quite a bit of money.”
Berkshire Hathaway’s Class B shares have performed well this year, hitting multiple records and gaining 16%, outpacing the broader stock market.
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