Berkshire Hathaway, which sold many bank holdings as the pandemic hit the United States, is back with a $2.9 billion bet on Jane Fraser’s Citigroup, despite selling a long-term stake in Wells Fargo & Co.
According to a regulatory filing on Monday, the company also added a $2.61 billion bet on Paramount and a nearly $390 million stake in Ally Financial. Buffett’s company also revealed new investments in McKesson Corp., Markel Corp., and Celanese Corp.
Berkshire Hathaway has spent the last few years overhauling its bank bets. It withdrew from high-profile investments such as JPMorgan Chase & Co. and Goldman Sachs Group, opting instead for Bank of America Corp. and US Bancorp. Berkshire’s investment in Wells Fargo, which dates back more than three decades, has been whittled down and has now vanished from the quarterly filing.
As new management takes over, Berkshire is betting on Citigroup. Even as new CEO Fraser seeks to refocus on higher-returning businesses like wealth management and treasury offerings, Citigroup’s stock has been falling. Since 2018, the stock has traded below book value, indicating that investors believe executives are actively destroying shareholder value. Citi declined to comment through a spokesperson.
Buffett, Berkshire’s chief executive officer, and chairman, and his investing deputies went on one of the company’s biggest buying sprees in the first quarter, with about $41 billion in net purchases. This is the highest level of data since 2008.
Prior to the filing, Buffett’s company had disclosed some increased bets. With stock purchases of Occidental Petroleum Corp. and a larger investment in Chevron Corp., it increased its oil bets to among Berkshire’s top-four stock bets. The company also increased its stake in Activision Blizzard as part of a merger arbitrage bet that the Microsoft Corp. deal would close. In April, it announced a bet on HP, taking it even further into the technology world.
The filing on Monday reveals that the shopping spree continued. Berkshire Hathaway now owns a $1.13 billion stake in Celanese and an $895 million stake in McKesson. The company also increased its stakes in GM and RH, a furniture company.
Certain bets were withdrawn by Berkshire Hathaway. In the first three months of the year, Verizon Communications stock was down 99 percent. The company’s stakes in AbbVie and Bristol-Myers Squibb Co were no longer listed in its filing.
