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Berkshire Hathaway Bets Big on Big Pharma

Berkshire Hathaway’s recent position signals a bullish turn for famed investor Warren Buffett.
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Warren Buffett’s Berkshire Hathaway has begun investing in stocks of industry leaders in the pharmaceutical sector, a regulatory filing revealed on Monday. The four major drugmakers are Pfizer, Merck, AbbVie, and Bristol-Myers Squibb.

According to a regulatory filing details, Berkshire Hathaway’s U.S.-listed stock holdings as of September 30, the massive holdings company disclosed $5.7 billion of new healthcare stakes, including more than $1.8 billion each in AbbVie, Bristol-Myers Squibb, Merck and $136 million in Pfizer.

Shares of the Big Pharma players rose in the after-hours trading.

Warren Buffett: “Go big or go home?”

According to the regulatory filing, Berkshire Hathaway has made several substantial changes to its portfolio. It added a $280 million stake in wireless phone company T-Mobile, and increased its General Motors Co. and Kroger Holdings. Surprisingly, the famed holdings company trimmed its position in Apple – which was by far the biggest holding – by about 3.7% or 36 million shares.

Warren Buffett Berkshire Hathaway Big Pharma healthcare Stakes

Warren Buffett, chairman and CEO of Berkshire Hathaway
(Editorial credit: Kent Sievers / Shutterstock.com)

Berkshire Hathaway also cut down on its stake in JPMorgan by more than 95%, from around 22 million shares worth over $2 billion by the end of June to less than 1 million. In addition, it sold Wells Fargo shares and excited a position in Costco Wholesale Corp. that was worth over $1.3 billion at the end of the second quarter. It has also cut its Barrick Gold position by more than 40%, despite only investing in the gold miner for the first time in the second quarter. It also reduced its holdings in PNC and M&T Bank.

Furthermore, Berkshire announced $19 billion worth of investment in the last quarter. It increased stake in Bank of America by spending more than $2 billion. Its other new investments include 5% stakes in five Japanese trading companies in the past twelve months, inking deals with Scripps and Dominion Energy.

Berkshire Hathaway’s recent position signals a bullish turn for famed investor Warren Buffett. The massive holdings company also sold its entire stakes in four major U.S. airlines at a loss in Q2 2020.

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