Technology

11 Crucial Things to Consider About Warren Buffett's New Apple Stake

Apple Inc. (NASDAQ: AAPL) was back in the news on Monday, but with a bright side for a change. Apple’s stock trajectory and news flow have been less than positive in recent weeks. The full quarterly holdings from the Berkshire Hathaway Inc. (NYSE: BRK-A) filing disclosed that the conglomerate had taken close to a $1 billion stake in Apple’s common stock.

24/7 Wall St. founders have tracked the holdings of Warren Buffett for what is now about two decades. With a 4% rally in Apple on the heels of this news, there are several things that should be considered. Many are positive, but many are not. And it is no longer a secret that Team Buffett often sells its positions far too early.

Here are 11 things that investors should consider here about the Buffett and Berkshire stake that was disclosed. The 13F-HR filing showed that the stake was 9,811,747 shares of Apple.

1. Ultimate Timing and Price — Unknown

There is no way to know what price was paid, nor what date Berkshire Hathaway bought Apple shares. The stake was listed as worth $1,069,382 as of March 31, 2016. Unfortunately for Team Buffett, that stake was worth $888.16 million as of Friday, before the 4% gain after this news broke.

2. They Are Losing Money, for Now at Least.

Apple currently is held at a loss by Team Buffett. The Apple’s high share price during the first quarter was $110.42 (March 30), while the low was $92.59 — versus $90.52 before this news was known.

3. Buffett Himself Wasn’t the Buyer.

This stake likely was not taken by Buffett himself, leaving portfolio managers Todd Combs or Ted Weschler to be the decision makers on this equity position.

4. A Bad to Mixed Technology History

Buffett and his managers have a very odd history when considering technology, and Buffett himself generally has shunned technology. There have been mixed results in other tech stocks, but Buffett’s own selection in International Business Machines Corp. (NYSE: IBM) shares has been rather painful. Buffett keeps adding IBM shares, but IBM’s stock price keeps heading south. They never did buy into Microsoft Corp. (NASDAQ: MSFT) despite the big turnaround and opportunity for Buffett to be able to say he did not have material information.

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