Warren Buffett, fondly known as the “Oracle of Omaha” for his stellar investment picks, and the American business magnate behind brainchild Berkshire Hathaway Inc. (NYSE:BRK.A) just upped his stake in Apple Inc. (NASDAQ:AAPL) by a significant chunk. This takes quite a unique turn in the investment world, as other well-respected investors have run in the opposite direction.
Consider that billionaire investor Carl Icahn, founder of conglomerate Icahn Enterprises in New York City, and three-year Apple stake-owner absolved himself of all Apple shares back in April, following irreconcilable issues he found with China’s attitude.
Icahn believed the China-Apple predicament rendered it problematic for the tech giant to sell in the Greater China segment- a weakness Icahn found insurmountable, despite once having declared to CNBC that buying Apple shares was absolutely a “no-brainer.” Then hit spring, when Icahn found himself bidding adieu to the company that he once championed in its heyday, personally calling AAPL CEO Tim Cook to lessen the blow.
How the mighty Apple had fallen in the eyes of many tycoons, including like-minded billionaire investor George Soros, whose hedge fund Soros Fund Management slashed his stake in Apple in the wake of its second-quarter results. Even David Einhorn of Greenlight Capitalo unloaded stake as if tossing a bruised apple amid a second-quarter that had every other big name on the Street sounding the alarm on the company.
Yet, the same day Soros joins Icahn on the Apple-throwing train, enter Warren Buffett, who not only holds on to the hallowed legacy Steve Jobs once forged in the wake of fallout, but boosts Berkshire’s position from 9.8 million shares to above 15.2 million shares, as disclosed in a new regulatory filing on Monday.
It is worthy to point out that Buffett’s multinational financial conglomerate Berkshire Hathaway traditionally has not been one to vie for technological assets. Suddenly, Berkshire increased its holdings in the ultimate tech giant by 55 percent, worth $1.46 billion at the end of second-quarter.
Buffett’s right-hands Todd Combs and Ted Weschler, who came on board the Berkshire team in 2011 and 2012, are part of Buffett’s long-term vision for the finance titan’s future scope, and have been willing to wade into the tech sector Buffett once evaded. As the Oracle revealed back in May, it turns out Combs and Weschler are the investment officers behind the choice to initially invest in Apple.
It appears Buffett made a solid bet on the iPhone maker, as the corporation continues to lead the smartphone/device market, with sales outclassing any and all close rivals. As of Monday, Apple stock’s closing price had rebounded back to $109 from May’s $90 slump.
The billion-dollar question of why Buffett would choose to double up on a company that put Wall Street up in arms and had prominent businessman wiping their hands of shares is now paying off handsomely for the man argued to be one of the greatest investors of all time. The Oracle strikes again, and it is safe to say after Monday, he counts this as another victory in his Nebraska pocket.
According to TipRanks analytics, AAPL shares are exhibited as a Strong Buy. Based on 37 analysts polled in the last 3 months, 32 rate a Buy on the stock, 4 maintain a Hold, and only 1 issues a Sell. The consensus price target stands at $125.47, marking a nearly 15% upside from where the shares last closed.