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For 14 consecutive quarters, Berkshire Hathaway has sold more shares than it has bought. Investors are already used to this. Then, in the 3 months ending in June, this streak was interrupted. The company bought almost $20 billion more in shares than it sold. And this money was distributed unevenly. They went into a small group of companies, and one of them was a department store chain that Berkshire had avoided for about 60 years.
Today I'll look at the five biggest new bets in the latest report: what each company is doing, the numbers behind them, and the real risks. Stay tuned for the fifth stock, as it's the most unexpected name on the list, and Berkshire more than doubled its stake in it. So, let's begin. The number one stock is Lennar, ticker LEN, trading at around $82.
Lennar builds homes throughout the United States. In the second quarter, Berkshire added about 12 million shares of Lennar's Class B stock, worth about $1.1 billion. And the buying didn't stop there. New documents show that Berkshire bought about $136 million worth of Lennar stock between Sept. 23 and 25 at prices ranging from $79 to $82.
This is important because Berkshire appears to be forming a small housing cluster. She also owns the construction company NVR and has opened a new position in D.R. Horton. Lennar shares are still well below their 52-week high of around $134. So, Berkshire is buying after a significant drop. The risk is simple.
Developers depend on home buyers, and 10- year government bonds are now yielding over 5% per annum. When borrowing is so expensive, fewer families can afford a mortgage. So, this is a bet that the housing market will recover. The next promotion is one that many people take advantage of every year, and it is at a completely different stage in its cycle.
Stock number two is Delta Airlines , ticker DAL, trading around $84. In the second quarter, Berkshire added about 17.5 million shares worth about $1.4 billion. And its total share is now worth about $5 billion. Delta's latest results explain why . Revenue in the June quarter increased by 14%, despite the airline operating only 1% more flights.
In simple terms, she made significantly more money at each location. This was made possible by premium tickets, loyalty programs, and credit cards. Delta expects revenue growth of an average of 10-15% again in the September quarter and raised its dividend by 15%. It forecasts adjusted earnings of $6.50 to $7.50 per share this year and free cash flow of $3 billion to $4 billion.
Free cash flow is simply the funds left over after paying for all of the business's needs. The main risk is fuel. Oil is trading above $90, and analysts warn that such rapid revenue growth will not happen again once prices stabilize. Airline stocks also fluctuate widely. Over the past year, the share price has fluctuated between $55 and $96.
If you like this review, please like and subscribe. This helps the channel a lot and will allow you not to miss future videos. The third stock is The New York Times, ticker NYT , price around $70. Berkshire first acquired them late last year, tripled its stake earlier this year and added a bit more in the second quarter.
The company now owns about 15.7 million shares worth $1.1 billion , or almost 10% of the entire company. The reason is that The Times is no longer just a newspaper. This is a subscription-based business. Digital subscription revenue last quarter grew 16% to $408 million. The company attracted 280 thousand new digital subscribers, bringing its total number to 13.4 million.
Adjusted earnings per share increased by 19%. This is achieved by bundling news, games, recipes, sports reviews, and product reviews into one subscription to retain customers. Now about the risks. The shares aren't cheap, and the company itself acknowledges pressure from big tech platforms and AI search engines that answer questions without directing readers to the site.
The plan is to reach 15 million subscribers by the end of next year. If growth slows, the stock price will feel it. And the fourth action is the largest on this list. In fact, one number in it is greater than the value of the other four combined. The fourth stock is Alphabet, Google's parent company, ticker GOOGL, price around $343.
This was Berkshire's largest single purchase in the quarter. About 24.5 million Class A shares and 23.5 million Class C shares were purchased, for a total of over $15 billion, and according to some reports, about $17 billion. Alphabet is now Berkshire's third- largest asset, with a stake of about $38 billion .
Only Apple and American Express are bigger than it. Interestingly, Berkshire has always avoided direct investments in artificial intelligence. However, Alphabet gives it access to AI, search, YouTube, and cloud computing in one profitable company . The risk here is different from others. Everyone knows this action.
AI stocks fell this week after news of a pause in OpenAI's training, a reminder that this trend could quickly reverse. Additionally, Berkshire's 10 largest assets now account for nearly 90% of its reported portfolio . So, stocks of this size carry considerable weight. The fifth stock is quite strange: Macy's, ticker M.
It is trading at a price of about $22. Berkshire's second- quarter report shows about 7.4 million shares outstanding, representing about 2.8% of the company , after increasing its stake by more than 140%. It's a meager bet by Berkshire's standards, worth about $160 million, but it's the first time in 60 years that Berkshire has backed a department store .
Macy's has a market value of only about $6 billion , but its expected annual revenue is more than $21 billion, and the stock trades at about 10 times earnings. Management is closing about 150 weaker stores to focus on 350 stronger ones, and the company still owns Bloomingdale's and Bluemercury. Now about the arguments of the pessimists.
Of the 10 analysts tracking the stock, only one recommends buying. Eight are advised to hold, and one is advised to sell. Restructuring is difficult, and department stores have been losing customers for years. This is a bet that a cheap, unpopular company can be saved. So , here is the picture. Berkshire is buying housing, airline tickets, a subscription news business, an AI and search giant, and a department store.
They have almost nothing in common, except for one thing. Each of them was valued lower than the market seemed to believe. A few final reminders . This report shows Berkshire's assets as of June 30, so the company could have bought or sold something since then. And the fact that a stock is worth more or less does not indicate its safety.
Now I would like to hear your opinion. Which of these five would you look at first ? And would you buy department store stock just because Berkshire did? Write to me in the comments. And if this video was helpful, please like, subscribe, and turn on notifications so you don't miss the next one. This video is made for educational and entertainment purposes only.
Nothing contained herein constitutes financial advice. I am not a licensed financial advisor. Stocks carry risks and you can lose money. Always consult a qualified financial professional before investing. Past results do not guarantee future success.
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