Warren Buffett’s Berkshire Hathaway was a net seller of stocks last quarter — and slowed its share buybacks

• Warren Buffett’s Berkshire Hathaway reported fourth-quarter earnings on Saturday.
• The investor’s company was a net seller of stocks and slowed its share buybacks last quarter.
• Berkshire’s operating earnings jumped 19% as it rebounded from the pandemic.

Warren Buffett’s Berkshire Hathaway was a net seller of stocks in the fourth quarter of 2021, but tapered its share repurchases in the period, resulting in a slight reduction in its massive cash pile.

The famed investor’s conglomerate spent about $3.4 billion on stocks on a net basis last quarter, but sold $3.9 billion worth, meaning it was a net seller of equities in all four quarters of 2021. It disposed of a net $7.4 billion of stocks over the course of last year — a fraction of its $331 billion stock portfolio as of December 31.

Buffett’s company spent $6.9 billion on share repurchases last quarter, lifting its stock buybacks last year to a record $27.1 billion, and to nearly $52 billion over the past two years. However, it has only spent $1.2 billion on repurchases this year as of February 23, suggesting Buffett may be finding Berkshire stock less attractive after its 6% gain since the start of January.

Berkshire’s buybacks last quarter helped to reduce its cash pile from $149 billion to $147 billion. Notably, Buffett and his team boosted their cash and cash equivalents from $45 billion to $85 billion over the course of last year, while reducing their holdings of Treasury bills from $90 billion to $59 billion. That could indicate Buffett and his team have soured on government bonds given interest rates are set to rise soon.

The value investor is willing to deploy about $80 billion of Berkshire’s cash. However, he has struggled to spend it given stocks are near record highs, private-equity firms and special-purpose acquisition companies (SPACs) have bid up the price of acquisitions, and even his own company’s stock has grown more expensive.

Buffett’s conglomerate owns a slew of businesses including See’s Candies, Geico, and the BNSF railroad. Its overall revenue grew 12% to $276 billion last year as sales jumped across its insurance, railroad, utilities, energy, and other main divisions.

While many of Berkshire’s subsidiaries were hit by supply-chain disruptions due to the pandemic, the company still managed to grow pre-tax earnings from its operating businesses by 19% to about $32 billion.

Buffett trumpeted Berkshire’s insurance business, railroad, energy division, and enormous Apple stake as the “Four Giants” of the company in his annual shareholder letter, which was published alongside the fourth-quarter results.

Berkshire’s recent portfolio update showed it built a roughly $1 billion stake in Activision-Blizzard last quarter, and boosted its Chevron position by a third. On the other hand, it slashed several holdings including AbbVie and Bristol-Myers Squibb.