Berkshire's Greg Abel Just Tripled Its Google Bet. It's Up 38%

Warren Buffett spent years telling investors that buying airline stocks was a bad idea, then Greg Abel just bought one anyway. That tells you almost everything about what's changing at Berkshire Hathaway right now.

The first 13F filing of the Abel era landed Friday, showing one of the biggest portfolio overhauls Berkshire has ever made in a single quarter.

Berkshire's Alphabet Stake Grew 224% in Q1

Abel grew Berkshire's stake in Alphabet by 224% in his first three months on the job, with the company now owning $16.6 billion of Google's parent. That makes it the seventh largest position in the whole portfolio.

It's also a position that's already in the money. Alphabet stock has rallied 38% in the six weeks since the quarter ended, which means the whole stake is sitting on a paper gain north of $6 billion.

The size of the bet makes this almost certainly an Abel call, even if Buffett blessed it or suggested it himself. Moves this big rarely happen at Berkshire without his nod.

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Abel Cut 15 Names and Bought His First Airline

The other half of the story is what Abel sold.

Fifteen names got wiped out entirely, and the cut list reads like a Buffett favorites tour. Visa, Mastercard, UnitedHealth, Domino's Pizza, Aon, Pool Corp., Amazon, Heico, Charter, Liberty Formula One, Lamar Advertising, Allegion, Diageo, Liberty Latin America, and Atlanta Braves Holdings all got the boot.

Constellation Brands got cut by 95%, while Chevron got trimmed 35% in a sale worth more than $8 billion. Most of those were stocks handled by Todd Combs, the portfolio manager who left for JPMorgan in December.

Then there's Delta, where Berkshire bought 39.8 million shares worth about $2.8 billion. That's the first airline in the portfolio since 2020, when Buffett sold every airline he owned during the early days of COVID.

Buffett once compared airlines to the Chicago Cubs, joking they'd had a bad century and were hopefully done with it. Given that history, it's hard to picture him pitching this trade, so this looks like Abel planting a flag.

What to Watch

Two more names quietly slid in. Berkshire tripled its New York Times stake to about $1.1 billion, and opened a small new position in Macy's that sent the retailer's stock up 5% after hours.

Cash kept climbing too, with Berkshire now sitting on $397.4 billion as of March 31. That's up from about $373 billion at year end, so even with all this buying, the firm has more dry powder than ever.

The early read on Abel is that he's willing to move fast and break a few Buffett habits.

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Source: CNBC