US investment firm Berkshire Hathaway (BRK.B:NYSE), founded by legendary investor Warren Buffett, was a net seller of $8 billion worth of stocks in the second quarter of this year.

Yet in a surprise move the firm also bought $870 million of shares in three US house builders DR Horton (DHI:NYSE), Lennar (LEN:NYSE) and NVR (NVRNVR:NYSE) despite successive interest rate hikes by the US Federal Reserve.

Berkshire Hathaway said that as of 30 June 2023, it owned about 5.97 million DR Horton shares worth $726.4 million, about 153,000 Lennar shares worth $17.2 million, and 11,112 NVR shares worth $70.6 million.

The Buffett-led company already owns Clayton Homes, Benjamin Moore Paint and Johns Manville Insulation, which were all hit by slowing demand caused by rising interest rates.

However, Berkshire Hathaway said this slowdown in housebuilders and building supplies was partially offset by new construction activity.

Shares in all three housebuilders rose on the news in after-hours trading.

BERKSHIRE SHARES UP YEAR-TO-DATE

Berkshire Class B shares have performed well year-to-date up 15% to $358, no doubt helped by the performance of Apple (AAPL:NASDAQ) shares - as of 30 June 2023, Berkshire holds $177.6 billion worth of shares in the US tech giant, making up its largest holding at 51% of the portfolio.

In the second quarter alone, Apple’s shares were up over 17%.

Last week, Berkshire Hathaway reported a strong set of second quarter results, with quarterly operating profit hitting $10 billion for the first time.

UBS analyst Brian Meredith raised his 12-month price target for the Class A shares to $621,591 from $608,000, calling the company ‘an attractive play in an uncertain macro environment.’

Keefe, Bruyette & Woods analyst Meyer Shields rated Berkshire ‘market perform’ but raised his price target to $565,000 from $545,000.

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SELL OFF

Although Buffett added new investments to his portfolio in the second quarter, he was a net seller of equities  - buying $4.6 billion and selling $12.6 billion from its $353.4 billion equity portfolio.

Berkshire exited holdings in global professional services firm Marsh & McLennan (MMC:NYSE), pharmaceutical distribution supply chain firm McKesson (MCK:NYSE) and non-operated oil and gas assets firm Vitesse Energy (VTS:NYSE), and drastically reduced his holding in games maker Activision Blizzard (ATVI:NASDAQ).

The one stock Buffett has bought every quarter however is his own, and this quarter was no exception with the buyback of around $1.3 billion of A and B shares.

That means, since 2018 Buffett has bought back over $70 billion of his own stock instead of paying out dividends.

LEARN MORE ABOUT BERKSHIRE HATHAWAY

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