Buffett's Berkshire reveals over $6B investment in Chubb, sending shares higher
Chubb's stock rose to an all-time high in after-hours trading on the news of Buffett's Berkshire investing in the insurance firm
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Warren Buffett's Berkshire Hathaway revealed a new $6.72 billion investment in insurance firm Chubb in a regulatory filing on Wednesday, which propelled the company's stock to an all-time high.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CB | CHUBB LTD. | 254.08 | -1.49 | -0.58% |
Berkshire owned 25.92 million shares in Chubb as of March 31, according to a regulatory filing that details Berkshire's U.S.-listed holdings as of that date. The stock has advanced over 16% this year, ahead of Berkshire's disclosure.
Chubb
Those gains mirror the tendency of stocks rising after Berkshire Hathaway reveals them as new holdings in its portfolio as it reflects what investors view as Buffett's seal of approval.
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Warren Buffett's Berkshire Hathaway disclosed a sizable new investment in insurance firm Chubb in a regulatory filing on Wednesday. (Christopher Goodney/Bloomberg via Getty Images / Getty Images)
"Chubb is an attractive equity investment for Berkshire because it operates in a business Berkshire knows well: property-casualty insurance," Cathy Seifert, a CFRA Research analyst who covers Berkshire, said in an email reviewed by Reuters.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BRK.B | BERKSHIRE HATHAWAY INC. | 405.77 | -1.33 | -0.33% |
| BRK.A | BERKSHIRE HATHAWAY INC. | 611,375.00 | +707.00 | +0.12% |
The filing indicated that Berkshire ended the month of March with $189 billion in cash and equivalents — a record high stockpile for Buffett's conglomerate.
Buffett had signaled at Berkshire's annual meeting on May 4 that the company's cash stake could rise to $200 billion by June. He said at the time that holding cash looked "quite attractive" as an alternative to high-priced stocks and uncertainty around "what's going on in the world."
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Chubb's stock soared to an all-time high on the news of Berkshire's more than $6.7 billion stake in the firm. (Budrul Chukrut/SOPA Images/LightRocket via Getty Images / Getty Images)
Berkshire reduced its stake in Apple by about 22% to $135 billion as of March 31, a sale that resulted in an $11.2 billion after-tax gain on the investment. Buffett said that he expects Apple to remain Berkshire's largest stock investment for the foreseeable future despite paring back its stake in the tech giant.
The company began buying Chubb stock in the third quarter of last year and obtained permission from the Securities and Exchange Commission (SEC) to temporarily keep its purchases confidential.
Buffett's firm occasionally makes such requests to defer the public disclosure of investments until it has bought the intended amount of shares in the stock to prevent other investors and the public from piggybacking on the purchases.
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Buffett outlined his succession plan for Berkshire Hathaway at the company's recent annual meeting. (Daniel Zuchnik/WireImage / Getty Images)
Berkshire has in recent years obtained similar SEC permission for its investment in Chevron and former investments in ExxonMobil, IBM and Verizon.
The filing doesn't indicate whether the investments were made by Buffett or Berkshire portfolio managers Todd Combs and Ted Weschler.
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Buffett, 93, has run Berkshire since 1965 and spoke at length about his succession plans at Berkshire's annual meeting earlier this month.
Reuters contributed to this report.