Good News: Buffett Has Deployed Over $10 Billion in 3 Weeks.
For the past couple of years, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett has taken heat for his company's underperformance relative to the benchmark S&P 500. But the fact remains that Buffett is one of the best investors of all time, if you look beyond just his recent performance.
According to Berkshire Hathaway's 2019 shareholder letter, Buffett has led his company to an average annual return of 20.3% over the past 55 years. That compares to a 10% compound annual return for the S&P 500, inclusive of dividends, over the same time frame. This 10.3% annual gap might not seem like much nominally, but it's led to Berkshire Hathaway's stock outperforming the benchmark index by more than 2,700,000% since 1965. Suffice it to say that when Warren Buffett buys or sells a stock, Wall Street and retail investors tend to play very close attention. That's what makes the past three weeks so exciting.
Between July 5 and July 22, Warren Buffett and his team deployed over $10 billion of the company's capital. During the first week of July, Berkshire Hathaway announced that it would be acquiring an assortment of natural gas transmission pipelines and storage assets from Dominion Energy (NYSE:D) for $9.7 billion. This effectively includes paying $4 billion for the assets and assuming $5.7 billion in debt from Dominion tied to these assets. As for Berkshire Hathaway, it more than doubled its share of interstate natural gas transmission in the U.S. from 8% to 18% and landed itself a cash cow in the process. It also doesn't hurt that Berkshire nabbed a 25% stake in liquid natural gas (LNG) export, import and storage facility in Cove Point, Maryland. This is one of only six LNG import/export points in the U.S.
But that's not all.
This past week, a Securities and Exchange Commission filing shows that Buffett's company acquired just over 33.9 million additional shares of Bank of America (NYSE:BAC) between July 20 and July 22.
The cost of these purchases comes to $813.3 million, and it upped Berkshire's ownership in BofA to almost 982 million shares (11.3% of all outstanding shares). BofA is Berkshire's second-largest holding behind Apple, in terms of market value.