Berkshire Hathaway has bought a big slice of Domino’s
Warren Buffett’s $1 trillion conglomerate has been hoarding cash — but it did make two new investments in Q3.
While shedding a net $34.5 billion worth of stocks in Q3 — including trimming its largest holding, Apple, and second-largest, Bank of America — Warren Buffett’s Berkshire Hathaway surprised many by taking a stake in two unexpected sectors: pizza and pools.
The Omaha-based conglomerate purchased $549 million worth of Domino’sstock and $152 million in Pool Corp., according to SEC filings disclosed yesterday.
Both stocks have had pretty unremarkable years: shares of Domino’s have gained 5% this year, while Pool Corp is down 8%. Still, the move aligns with Buffett’s value-based approach to investing, which has seen the 94-year-old billionaire’s company consistently seek out undervalued compounders. It doesn’t get much more recession-proof than pizza, and Pool Corp benefits from nondiscretionary demand for maintenance services, which is typically less volatile than new sales.
Despite being a big deal for those companies — both stocks were green in premarket trading this morning after the news — the purchases barely register on Berkshire’s wider portfolio or the cash pile that the company has been quietly hoarding: Berkshire’s public stock holdings are worth some $266 billion, and the company’s cash reserves topped $325 billion in the third quarter.
Go Deeper: What could Berkshire buy with its ever-growing cash pile?
