Berkshire Hathaway, led by famed investor Warren Buffett (Trades, Portfolio), has announced new investments in Domino's Pizza (DPZ, Financial) and Pool Corp (POOL) as part of its third-quarter portfolio adjustments. These investments were disclosed in a U.S. Securities and Exchange Commission (SEC) filing, revealing that Berkshire held 1.28 million shares of Domino's, valued at approximately $549 million, and 404,000 shares of Pool Corp, worth around $152 million, as of September 30.
Following the disclosure, Domino's shares surged by 6.9% in after-hours trading, while Pool Corp saw its shares increase by 5.7%. It is customary for stocks to rally following investment announcements by Berkshire, reflecting investor confidence in Buffett's decisions, although it wasn't specified if Buffett or his investment managers, Todd Combs and Ted Weschler, were responsible for these particular investments.
Interestingly, these investments occurred as Berkshire accumulated a substantial cash reserve. As of September 30, Berkshire's cash and equivalents nearly doubled to $325.2 billion, marking a halt in stock repurchases since 2018. In the same period, Berkshire sold $36.1 billion in stocks and only acquired $1.5 billion, mostly divesting from major holdings like Apple and Bank of America.
While Buffett did not provide explicit reasons for reducing certain holdings, tax considerations and high valuations may be factors. Despite these sales, Berkshire's market capitalization remains robust at approximately $1.01 trillion, providing ample opportunity for significant acquisitions.
Additionally, Berkshire increased its stake in aircraft parts manufacturer Heico and sold its entire position in Floor & Decor, along with portions of its holdings in Capital One, Charter Communications, Nu Holdings, and Ulta Beauty. The latter's stock dropped 3.8% after the announcement of Berkshire selling over 96% of its shares. Berkshire Hathaway's extensive portfolio includes companies like Geico, BNSF Railroad, and various consumer, energy, industrial, and retail businesses.
