Warren Buffett's Berkshire Hathaway reveals Chubb as 'mystery stock' purchase
By William Watts
Stake in property-casualty insurer gives Berkshire exposure to 'one of the best-performing financial sector subgroups at a below-peer valuation', CFRA analyst says
Property-casualty insurer Chubb Ltd. was the mystery stock being accumulated by Berkshire Hathaway Inc. in recent quarters, according to a Wednesday regulatory filing by the conglomerate run by billionaire investor Warren Buffett.
Chubb shares rose more than 8% in after-hours trading.
Berkshire Hathaway (BRK.A) (BRK.B) held more than 25.9 million shares of Chubb (CB) as of March 31, a stake worth $6.7 billion, according to a 13-F filing with the Securities and Exchange Commission. Large investors are required to disclose their long stock and some options holdings as of the end of each calendar quarter. Filings are due 45 days after the end of the quarter.
Chubb shares have rallied 12% in the year to date, ending Wednesday's session at $252.97.
Chubb shares are likely to rise Thursday morning "as investors react to this news and speculate whether Berkshire will keep an equity stake in CB or pursue an outright acquisition," said Cathy Seifert, analyst at CFRA, in a note.
Berkshire's equity stake gives it exposure to one of the best-performing financial sector subgroups at a below-peer valuation, she said. "We can't speculate whether Berkshire would pursue an outright acquisition of CB, but we note their business mixes are highly complementary," Seifert wrote.
Berkshire was previously granted permission to keep confidential the details of one or more of its holdings in the third and fourth quarters of last year. Berkshire amended those earlier filings to show it had held shares of Chubb. The stake as of the end of the first quarter accounted for 2% of Berkshire's portfolio.
Buffett wasn't asked about the mystery holding during the question-and-answer session at Berkshire's annual meeting on May 4. Berkshire did reveal at the time that it had cut its holdings of Apple Inc. (AAPL) and had dumped its entire stake in Paramount Global (PARAA) at a loss.
The 13-F filing showed that Berkshire cut its Apple holdings by more than 116 million shares, or nearly 13%. Apple remains Berkshire's largest holding, moving from just over 50% of the conglomerate's portfolio to around 40%. Buffett said on May 4 that Apple would likely still be Berkshire's largest holding at the end of the year.
-William Watts
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
05-15-24 2156ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
These Stocks Are (Still) Powering the Bull Market
-
5 Undervalued Energy Stocks to Play the AI Data Center Demand Boom
-
After Earnings, Is Lowe’s Stock a Buy, Sell, or Fairly Valued?
-
5 Stocks With the Largest Fair Value Estimate Cuts After Q1 Earnings
-
10 Stocks With the Largest Fair Value Estimate Increases After Q1 Earnings
-
Markets Brief: Inflation Back in the Spotlight
-
AI Is Booming, but Consumer Spending Is Slowing. Which Will Prevail in the Stock Market?
-
What’s Happening In the Markets This Week
-
3 Dividend Stocks for June 2024
-
After Earnings, Is Alibaba Stock a Buy, Sell, or Fairly Valued?
-
MongoDB Earnings: Slashing Valuation as Execution and Macro to Blame for Lower Guidance
-
Marvell Earnings: We Raise Our Medium-Term AI Forecast and Bring Our Valuation Up to $75
-
Zscaler Earnings: Impressive Traction in Emerging Products Drives Sales Growth for the Quarter
-
Dell Earnings: Raising Valuation on Strong AI, but the Stock Remains Severely Overvalued
-
After Earnings, Is Nvidia Stock a Buy, Sell, or Fairly Valued?
-
The 10 Best Companies to Invest in Now