Warren Buffett’s Berkshire Hathaway is disclosing a new $7 billion stake in fellow insurer Chubb
OMAHA, Neb. — Warren Buffett’s Berkshire Hathaway on Wednesday revealed a new $7 billion stake in fellow insurer Chubb.
Berkshire disclosed the investment it has been building over the past nine months in a quarterly filing with the Securities and Exchange Commission. Buffett’s conglomerate had received permission to keep the Chubb investment confidential while it was still buying.
Berkshire said it held nearly 26 million Chubb shares at the end of March, giving it a 6.4% stake in the company. Chubb shares jumped more than 7% in after-hours trading to sell for $271.82 after Berkshire’s investment was revealed.
Many investors follow Berkshire’s portfolio closely because of Buffett’s remarkably successful track record over the decades, and some will certainly speculate that Berkshire could one day buy all of Chubb.
Berkshire owns many other companies — including BNSF railroad, a number of utilities and an assortment of manufacturing and retail companies — but insurers, like Geico and General Reinsurance, have always been at the core of the Omaha, Nebraska-based conglomerate. So it makes sense that another insurer like Zurich-based Chubb might appeal to Buffett.
CFRA Research analyst Cathy Seifert said in a note to investors that Chubb is now one of the 10 biggest holdings in Berkshire’s portfolio. “We can’t speculate whether Berkshire would pursue an outright acquisition of CB, but we note their business mixes are highly complementary,” Seifert wrote.
The quarterly filing doesn’t say clearly whether Buffett or one of Berkshire’s two other investment managers made the Chubb investment, but Buffett generally handles all the stakes worth $1 billion or more.
Buffett already revealed some of Berkshire’s most noteworthy moves at the company’s annual shareholders meeting earlier this month.
Berkshire sold off a little over 116 million Apple shares in the quarter — accounting for about 13% of its stake — to trim its biggest single investment. But it still holds nearly 790 million Apple shares, and Buffett told shareholders that he expected the iPhone maker to remain a long-term holding.
Buffett also revealed at the annual meeting that Berkshire had sold off all of its Paramount Global investment at a loss. That happened after the first quarter ended because Wednesday’s report showed Berkshire still owning more than 7.5 million shares.
Berkshire has also been regularly filing updates as it makes purchases of Liberty Media stock because it holds more than 10% of that stock. At the last reports, Berkshire held 70 million Liberty Media Series C shares and more than 35 million Liberty Media Series A shares. Those stocks track the shares of satellite radio provider Sirius XM holdings and have been selling at what appears to be a discount to Sirius XM shares, according to Morningstar. Berkshire trimmed its stake in Sirius XM during the quarter.
Wednesday’s filing revealed a number of other changes during the quarter, including the sale of all of Berkshire’s remaining 22.8 million HP Inc. shares. It also trimmed its stakes in Chevron and Louisiana Pacific stocks.