Berkshire Hathaway and GE
On August 14, 2017, Berkshire Hathaway (BRK-A) (BRK-B) divulged the details of its 13F filed for the quarter ended June 30, 2017. Warren Buffett’s behemoth firm liquidated its holdings in General Electric (GE), according to the 13F. The same filing reveals that Berkshire Hathaway created a stake in Synchrony Financial (SYF), a past GE spin-off.
The Nebraska-headquartered conglomerate, an investment bellwether, raised its stake significantly in Bank of New York (BK), General Motors (GM), and Apple (AAPL). Berkshire Hathaway reduced its holdings in American Airlines (AAL), Delta Air Lines (DAL), and IBM (IBM).
General Electric’s stock price
Given the recent complete stake sale by Berkshire Hathaway, let’s take a look at GE’s stock price. The investor community had some hopes for GE’s 2Q17 earnings. However, with the concerns expressed by its erstwhile CEO, Jeffrey Immelt, regarding the company’s ability to meet its guidance for 2017, the stock tumbled.
General Electric (GE) is down 20.5% year-to-date through August 15, 2017. On August 11, 2017, GE stock closed at its 52-week low to reach $25.20 per share. In the last one-month period, GE stock took a 7% hit. This trend presents a sharp contrast to its industrial peers’ performance year-to-date:
- Illinois Tool Works (ITW): gained 13.6%
- Honeywell International (HON): gained 18.6%
- Boeing (BA): gained 53.6%
- United Technologies Corporation (UTX): gained 5.8%
The SPDR S&P 500 ETF Trust (SPY), a representative of the broader market, has returned 10.3% since January 1, 2017.
In this series
Investors can gather important information by watching the 13-F filings of key companies, which can act as a harbinger for informed investment decisions. In this short series on General Electric, we’ll explore the factors that led to Berkshire Hathaway liquidating its entire stake in the company.