Buffett's Berkshire bets on Big Pharma, invests in four drugmakers
In a regulatory filing detailing its U.S.-listed investments as of Sept. 30, Berkshire disclosed new stakes in Abbvie Inc, Bristol-Myers Squibb Co and Merck & Co of more than $1.8 billion each, and a new $136 million stake in Pfizer Inc.
Berkshire also revealed a new $276 million stake in wireless phone company T-Mobile US Inc. During the third quarter, Berkshire also sold a $1.3 billion stake in Costco Wholesale Corp, which has benefited as people stocked up on groceries and home supplies, and pared holdings in four banks: JPMorgan Chase, Wells Fargo, PNC and M&T. The JPMorgan stake fell by 96%. Berkshire also confirmed it trimmed its Apple stake and bought more Bank of America stock. Shares of the four drugmakers rose in after-hours trade, reflecting investors’ confidence in Buffett’s bets. Monday’s filing signals where Buffett and his portfolio managers Todd Combs, who is also a JPMorgan director, and Ted Weschler see value. Larger investments are normally Buffett’s. Berkshire did not immediately respond to a request for comment.
The healthcare bet is structured similarly to the more than $6 billion wager that Buffett made on the airline industry. Buffett sold Berkshire’s airline holdings in April, saying the pandemic had changed the industry and made its outlook uncertain. Berkshire bought $17.6 billion and sold $12.8 billion of equities in the quarter, making it unusually active. Other new investments included a $6 billion stake in five Japanese trading houses and a $1.5 billion wager on newly public data storage company Snowflake Inc.
Berkshire also has more than 90 operating units including the Geico car insurer, BNSF railroad and Dairy Queen ice cream.