Berkshire Hathaway Inc., one of the world’s biggest holding companies, is reported to have sold the entire holding of Intel’s stock after the tech company reported about a decline in quarterly income. Warren Buffet sold 7.7 million shares of Intel’s stock, which is 0,14% of Berkshire Hathaway’s total capital. The company’s net income dropped 9%.
Berkshire Hathaway Sees Income Decline
For reference, Berkshire Hathaway was founded by Warren Buffet in 1965. The holding company is engaged in investment and insurance services and can boast many years of successful activities and billion-worth proceeds.
A lot of companies run by Berkshire Hathaway belong to various economic sectors: retail sales, railway transportation, mass media, jewelry business, home appliance manufacturing etc.
At the same time, Berkshire Hathaway owns major holdings of the shares emitted by Coca-Cola, American Express, Procter&Gamble, Wells Fargo and other giants.
Last quarter, the holding company earned only $3.1bn, which is a considerable decline in comparison with previous periods. It seems like Warren Buffet has decided to deal with the problem though getting rid of the low-income risky assets.
Intel is reported to be the only company to see the holding of its stock being sold completely by Berkshire Hathaway.
Moreover, Berkshire Hathaway got rid of its holdings of other stock, including:
· Johnson & Johnson – 30%
· Procter & Gamble – 20%
· Kraft– 25%
· U.S. Bancorp and General Electric Co.
At the same time, Berkshire Hathaway boosted its holding of other stocks:
· National Oilwell Varco. The company purchased 2,8 million shares.
· Phillips 66. The company purchased 27 million shares.
Berkshire Hathaway is reported to have invested over $74bn in US stocks in Q2 201. In Q1 2012, the total sum of investments in US stock was estimated $75.3bn.
Therefore, despite the sellout, Berkshire Hathaway won’t suffer major losses and will remain one of the leading companies in the industry.
Intel
The chart below, courtesy of , reflects the current state of affairs in the market of Intel’s stock. The experts report that the price reached one if the targets around $28.86 per share, which late resulted in mass profit-taking.
The second chart shows that most analysts have downgraded their forecasts, which also has a negative impact on investors’ sentiment. Intel is a newbie in the mobile industry. So, it has difficulty competing with RM Holdings, Qualcomm, Nvidia, Texas Instruments and Marvell.
For now, the price of Intel’s stock is expected to decline down to 22.5-24.00. If major buyers accumulate their trades in the given rage, we may consider purchases as well.
