Warren Buffett’s Berkshire Hathaway on Wednesday unveiled a new $6.72 billion stake in insurance company Chubb, confirming months of speculation that Chubb had made a huge new investment.
As of March 31, Berkshire held 25.92 million Chubb shares, according to a regulatory filing detailing Berkshire’s U.S.-listed holdings.
Following the disclosure, Chubb’s stock price rose 6.3% to $268.96 in after-hours trading, hitting a new all-time high.
Berkshire’s stock price often rises when it reveals new holdings, reflecting what investors believe is Buffett’s endorsement.
“Chub is an attractive stock investment for Berkshire because it operates in a business that Berkshire knows well: property and casualty insurance,” Kathy Seifert, a CFRA Research analyst who covers Berkshire, said in an email. Because it’s evolving,” he said.
Seifert declined to speculate on whether Berkshire would acquire Chubb in its entirety, but Chubb’s focus on commercial specialty coverage and luxury homeowner protection is an important consideration for Berkshire’s insurance and reinsurance. He said it would “fit well” into the insurance portfolio.
Berkshire had $189 billion in cash and equivalents at the end of the March period.
At Berkshire’s annual meeting on May 4, Buffett said cash contributions could reach $200 billion by June, compared them to high-priced stocks and “what’s going on in the world.” He said cash looks “very attractive” when taken into account. Chubb and Berkshire did not immediately respond to requests for comment.
Berkshire began acquiring Chubb in the third quarter of last year and received permission from the Securities and Exchange Commission to temporarily keep the deal confidential.
Mr. Buffett sometimes requests such permission to prevent investors from taking advantage of him before the purchase is completed.
In recent years, Berkshire received similar SEC clearance for its Chevron investment and previous investments in Exxon Mobil, IBM and Verizon.
The Chubb investment was revealed 10 days after Berkshire unexpectedly disclosed that it had sold about 115 million shares of Apple stock in the first quarter.
This reduced the iPhone maker’s holdings to $135.4 billion, or 40% of its $335.9 billion stock portfolio.
Apple accounted for most of Berkshire’s $20 billion worth of stock sales in the first quarter.
Berkshire also reduced its holdings in several other stocks, including Louisiana Pacific and SiriusXM, and exited its investment in computer maker HP. It bought just $2.7 billion in stock during the quarter.
Wednesday’s filing did not specify which investments Mr. Buffett or his portfolio managers Todd Combs and Ted Weschler made.
Buffett, 93, has run Berkshire since 1965.
The conglomerate also owns dozens of companies, including Geico auto insurance company, BNSF Railroad, energy and industrial companies, and consumer brands such as Benjamin Moore, Dairy Queen, Duracell, Fruit of the Loom, and See’s Candies. Masu.
