Berkshire Hathaway (BRK-B) released its fourth-quarter 13F on Thursday, February 14, after the markets closed. The most notable exit for Berkshire was Oracle (ORCL), which it had just bought in the third quarter. As ironic as it may sound, Berkshire announced its divorce from Oracle on Valentine’s Day.
Even as it became public that Berkshire had exited Oracle, the stock closed with gains of 0.47%, slightly outpacing the gains of the NASDAQ Composite (QQQ). While Berkshire exited Oracle in the fourth quarter, the stock has looked strong so far in 2019 and has gained 15.0% year-to-date based on its February 15 closing prices. Apple (AAPL) and IBM (IBM) have respectively gained 8.5% and 22.8% over the period.
Oracle has received a “strong buy” rating from six analysts, while nine analysts have a “buy” or equivalent rating on the stock. 20 analysts have rated Oracle as a “hold,” while the remaining two analysts polled by Thomson Reuters on February 15 have rated it as a “sell.” Oracle’s mean consensus price target of $52.4 represents an upside of only 1.3%.
To be sure, Oracle is not the first company that Berkshire has exited in the last two years. It also exited General Electric (GE), Walmart (WMT), and IBM in the last two years. However, the Oracle exit has again highlighted Warren Buffett’s uneasy relationship with tech companies (MSFT). Buffett has also admitted missing out on Amazon (AMZN) and Alphabet (GOOG).
While Apple (AAPL) is Berkshire’s biggest holding, Buffett sees it as a consumer products company rather than a tech company. In the next and final article, we’ll discuss Berkshire’s Apple investment.