Berkshire reduced its holdings in Apple and Bank of America in Q3, almost completely divesting from Utah Beauty, and newly invested in Domino's

The 13F filing released on Thursday in U.S. time shows that Berkshire Hathaway reduced its holdings in Apple, Bank of America, Ulta Beauty (ULTA), satellite radio company Sirius, and Charter Communications in the third quarter. New positions include Domino's Pizza and pool supplies distributor Pool.

As of the end of the third quarter, Berkshire Hathaway's major holdings included Apple, American Express, Bank of America, Coca-Cola, and Chevron. Among the company's top ten holdings, only Apple and Bank of America were reduced in the third quarter.

During the third quarter, Berkshire reduced its stake in Apple by 25%. So far this year, its cumulative reduction in Apple has reached two-thirds.

In the third quarter, Berkshire reduced its stake in Bank of America by nearly 23%, bringing its ownership percentage to 10.4% by the end of the quarter. It is worth noting that entering October, regulatory filings showed that Buffett continued to reduce his stake in Bank of America. As the ownership percentage fell below the critical threshold of 10%, there is no need to disclose the transaction details promptly according to U.S. SEC regulations.

Berkshire sold most of its shares in ULTA, reducing this position by 96.5%. Following Berkshire's reduction, ULTA fell about 4% in after-hours trading.

Berkshire's holding period for ULTA was very short. The 13F filing released in mid-August showed that Berkshire established a position in this beauty stock, buying about 690,000 shares worth approximately $266 million. This initial investment surprised the market and sparked considerable discussion.

However, the financial report released at the end of August showed that ULTA's second-quarter performance fell short of expectations across the board, marking the first time since May 2020 that the company missed earnings per share expectations, and the first time since December 2020 that it missed revenue expectations. After experiencing a decline in same-store sales recently, the company lowered its full-year performance outlook.

Berkshire's new position in the third quarter was in Domino's Pizza. As of September 30, Berkshire held 1.28 million shares of Domino's stock, valued at approximately $549 million. Domino's Pizza rose over 7% in after-hours trading.

In the third quarter, another new stock for Berkshire was pool supplies distributor Pool. By the end of the quarter, Berkshire held 404,000 shares of Pool stock, valued at approximately $152 million. Pool rose over 5.7% in after-hours trading.

The two new positions for Berkshire in the third quarter share some commonalities:

So far this year, both have underperformed the overall market. Domino's Pizza's stock price has increased by about 6% year-to-date, while Pool's stock price has decreased by 8%.

Due to pressure on spending from low-income consumers, Domino's Pizza's stock price has been suppressed. The demand for pools has been sluggish as people are more cautious about discretionary spending, which has weighed on Pool's stock price.

Although Berkshire reduced its stake in satellite radio company Sirius XM in the third quarter, more timely regulatory filings in October showed that Berkshire increased its holdings in the stock. From October 16 to 18, Berkshire Hathaway increased its stake in Sirius XM by approximately $86.73 million, bringing its total holdings to 108.72 million shares. Sirius's stock price did not show significant fluctuations in after-hours trading on ThursdaySirius XM is a North American radio entertainment company that provides live broadcasts, programming, and other services through satellite radio, offering content such as music, sports, drama, talk shows, and news, primarily maintaining stable profits through in-car scenarios.

After Berkshire disclosed changes in its investments, the stock prices of related investment targets typically rise or fall, highlighting investors' recognition of Buffett.

The table below shows the major changes in Berkshire's holdings for the third quarter.

At the beginning of this month, Berkshire's financial report revealed that due to poor performance in its insurance business, the company's revenue and operating profit unexpectedly declined slightly in the third quarter, with operating profit down 6.2% year-on-year, falling short of expectations. The company's cash reserves rose to $325.2 billion, setting a new historical record.

The market generally speculates that the reasons for Berkshire reducing its holdings in Apple and Bank of America may include overvaluation and a reduction in concentration in its investment portfolio. Coupled with the fact that it did not repurchase any of its own shares in the third quarter, and the two newly added stocks in its latest holdings have relatively poor stock performance, this further confirms the market speculation that the investment guru Buffett believes that U.S. stocks are too expensive at present.

As of Thursday's close, Berkshire has risen approximately 31% year-to-date