Washington: Warren Buffett’s Berkshire Hathaway Inc disclosed a stake in Apple Inc, betting that the technology company will rebound after a slump driven by a slowdown in iPhone sales.
Berkshire held 9.81 million Apple shares as of March 31, according to a regulatory filing Monday from the billionaire’s Omaha, Nebraska-based company. The holding was valued at $1.07 billion at the end of the first quarter.
Apple last month reported its first quarterly drop in revenue in 13 years, stoking concerns that the company’s best days have passed. The company’s share slide since the middle of last year may have created an opportunity for Berkshire.
Berkshire does seem to be increase its stake in tech companies. On Friday, it was reporter that Berkshire Hathaway is backing a consortium to buy Yahoo’s online portfolio. Buffett deputies previously invested in Intel Corp in 2011, and Buffett amassed a multi-billion dollar holding in International Business Machines Corp.
“Apple at the current valuation makes a ton of sense; it’s a consumer-product company more than a tech company,” Jeff Matthews, an investor and author of Berkshire-related books, said about the new holding. “The company has a great financial model, a great brand name and a cheap stock.”
Apple rose 1.8 per cent to $92.19 in early trading at 8:18 am in New York after Berkshire disclosed its investment. The Cupertino, California-based company had slumped 14 percent this year through Friday. Kristin Huguet, a spokeswoman for Apple, wasn’t immediately available to comment.
Chief Executive Officer Tim Cook is pivoting toward services and exploring new technologies such as self-driving cars to reduce reliance on the iPhone. Cyrus Mewawalla, managing director at London-based CM Research, said those initiatives are unlikely to pay off this year, but may reward more patient investors.
TV, Cars
“What would make this stock a good buy is a whole load of projects we know they’re working on,” he said. “They’re working on a TV, a car, a whole bunch of apps coming for the Apple Watch. We know mobile payments has just started off.”
The investment could have been made by one of Buffett’s deputies, Todd Combs or Ted Weschler. Both have been building their own portfolios in recent years and typically take stakes of $1 billion or less per company, while Buffett makes larger wagers. The filing doesn’t specify the person behind each holding.
Apple’s Cook may visit India this week and meet Modi
(Reuters)
Apple’s Chief Executive Tim Cook will visit India this week and meet Prime Minister Narendra Modi on the second leg of his Asian tour, two sources familiar with the matter said, as the company seeks to revive sluggish iPhone sales.
Cook’s visit, which follows a trip to China, comes at a crucial time as Apple looks for new growth markets after posting its first ever decline in iPhone sales, and as India has denied it permission to sell refurbished phones - a move seen as key to appealing to price-sensitive local consumers.
The visit is Cook’s first to India as the head of the US technology company, one of the sources said.