Berkshire Hathaway sells stocks, reports profit

(Reuters) — Warren Buffett appears to have soured on stocks, letting cash at Berkshire Hathaway Inc. soar to nearly $277 billion and selling about half its stake in Apple Inc., even as the conglomerate posted a record quarterly operating profit.

Berkshire’s results released Saturday suggest Mr. Buffett, one of the world’s most revered investors, is growing wary about the broader U.S. economy or stock market valuations that have gotten too high.

Second-quarter profit from Berkshire’s dozens of businesses rose 15% to $11.6 billion, or about $8,073 per Class A share, from $10.04 billion in the year-earlier period.

Nearly half of that profit came from Berkshire’s insurance businesses, including Geico car insurance, where underwriting profit more than tripled as premiums rose and claims fell.

But revenue rose just 1% to $93.65 billion, with little change in major businesses such as the BNSF railroad and Berkshire Hathaway Energy, and a 12% drop at the Pilot truck stop chain.

The second-quarter results followed a stock market selloff that pushed the Nasdaq into correction territory and a weak jobs report that sparked worries about U.S. economic activity and whether the Federal Reserve waited too long to cut interest rates.

If you look at the entire Berkshire picture and the “macroeconomic data, a safe conclusion is that Berkshire is getting defensive,” said Cathy Seifert, an analyst at CFRA Research who rates Berkshire a “buy.”

Berkshire’s cash stake grew to $276.9 billion as of June 30 from a then-record $189 billion three months earlier, largely because Berkshire sold a net $75.5 billion of stocks.

It sold about 390 million Apple shares in the second quarter, on top of 115 million sold from January to March, as the iPhone maker’s stock price rose 23%. Berkshire still owned about 400 million shares worth $84.2 billion as of June 30.

The second quarter was the seventh straight quarter in which Berkshire sold more stocks than it bought.

Berkshire also repurchased just $345 million of its own stock, down from $2.57 billion in the first quarter, and none in the first three weeks of July.

“Buffett doesn’t seem to think there are attractive opportunities in publicly traded stocks, including his own,” said Jim Shanahan, an Edward Jones analyst with a “hold” rating on Berkshire. “It makes me worry what he thinks about markets and the economy.”