Berkshire Hathaway (BRK.B), the holding company of legendary investor Warren Buffett, opened new positions in the stocks of Domino’s Pizza (DPZ) and Pool Corp. (POOL) during this year’s third quarter.
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Nebraska-based Berkshire Hathaway has bought 1.3 million shares of Domino’s, giving Buffett a 3.6% stake in the pizza retailer that’s valued at $550 million. At the same time, Berkshire has taken a 1% stake in pool equipment wholesale distributor Pool Corp. that’s valued at $152 million.
Both DPZ and POOL stock jumped in after-hours trading on news of Berkshire Hathaway’s stakes. Domino’s Pizza stock rose 8%, while the share price of Pool Corp. increased 6%. So far this year. Domino’s stock had risen 6%, while Pool Corp’s shares were down 7%.
A Bullish Sign?
The new stakes in Domino’s and Pool Corp. come as a bit of a surprise given that Buffett has been in the news in recent months for selling stocks, not buying them. The Oracle of Omaha, as Buffett is known, has spent most of this year reducing some of his largest positions, notably in Apple (AAPL) and Bank of America (BAC).
Berkshire continued to sell stocks in Q3 of this year. The company was a net buyer of $1.5 billion of stocks while selling $36 billion of its equity holdings, according to its latest regulatory filing. Berkshire sold nearly all of its stake in Ulta Beauty (ULTA) that it had only accumulated in this year’s second quarter.
Growing Cash Pile
Berkshire trimmed stakes in Charter Communications (CHTR), Nu Holdings (NU), and Capital One (COF), and exited its entire stake in Floor & Décor (FND) during Q3. The stock sales have swelled Berkshire Hathaway’s cash pile to a record $325.2 billion.
Analysts and investors have speculated that the selling of stocks is an indication that Buffett sees the market as overvalued or headed for a decline. Berkshire Hathaway owns a massive stock portfolio that is valued at $294.56 billion. The company’s more affordable Class B shares have risen 31% so far in 2024.
Is BRK.B Stock a Buy?
The Class B stock of Berkshire Hathaway has a consensus Moderate Buy rating among two Wall Street analysts. That rating is based on one Buy and one Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average BRK.B price target of $531 implies 13.53% upside from current levels.
