Buffett Reaffirms Apple as Value Buy

SMITH BRAIN TRUST — As investing icons Carl Icahn, George Soros and Leon Cooperman have exited Apple and its lagging stock, Warren Buffett has reasserted a value-investor approach by upping his stake in the tech giant. SEC filings on Monday revealed Warren Buffett’s Berkshire Hathaway as of June 30 increased its Apple stake by 55 percent, or about $500 million.

"Apple’s stock came down substantially in the second quarter," finance professor David Kass at the University of Maryland’s Robert H. Smith School of Business told Bloomberg News. "Value investors always like the price to go down because it gives them an opportunity to buy more."

Kass, a Berkshire shareholder and a close follower of Buffett's investment strategy since 1980, said the Apple move was likely made by Warren Buffett’s portfolio managers, Todd Combs or Ted Weschler. The pair initially purchased the Apple stock, as revealed in May 2016, in a $1.2 billion investment of 9.8 million shares. (Read previous analysis from Kass and Smith marketing professor P.K. Kannan in "Making Sense of Berkshire's Bite of Apple") Berkshire now owns 15.23 million Apple shares.

Berkshire, according to the recent filing, also reduced its Walmart holding (a Buffett pick since 2005) by 27 percent, or about $1 billion, and reduced its holdings of Deere & Co. and Suncor Energy. "It’s a little bit of fine tuning," Kass said. Buffett and his deputies "do not make many changes to their portfolio."