2 Investments Warren Buffett Continued to Favor While Reducing His Stake in Apple

2 min read | August 21, 2024 12:00 AM PDT | By Team Kalkine Media

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Warren Buffett, the renowned leader of Berkshire Hathaway (BRK.B), has recently garnered attention for his latest adjustments in portfolio holdings. The second quarter of 2024's 13F filing from Berkshire Hathaway highlighted a reduction in holdings, notably decreasing its position in Apple (NASDAQ:AAPL) and other significant assets like Bank of America (NYSE:BAC)and Chevron (NYSE:CVX).

Amid these adjustments, Buffett has increased investments in Occidental Petroleum (NYSE:OXY) and Chubb Limited (NYSE:CB). This shift in focus invites a closer look at why these companies are attracting Buffett's interest and what that might signal about their current standing.

Chubb Limited

Chubb Limited (CB), with a market capitalization of $110.5 billion, stands as a prominent player in the property and casualty insurance sector. It provides a broad array of insurance products, including commercial lines, financial lines, and personal insurance.

Since 2023, Berkshire Hathaway has been expanding its position in Chubb Limited. This growing investment has contributed to Chubb's stock reaching record levels, making it one of Berkshire's top holdings. Currently valued around $7.35 billion, Chubb represents the 10th-largest holding in Berkshire's portfolio.

Chubb's stock has seen significant appreciation, with a 36% increase over the past 52 weeks and a 20.6% rise year-to-date, surpassing the broader S&P 500 Index's performance over these periods. The company's price-to-earnings (P/E) ratio of 12.62 aligns with industry standards. Recently, Chubb announced a quarterly dividend of $0.91 per share, resulting in a forward yield of 1.34%. The insurer has consistently raised its dividend over the past eight years, reflecting its commitment to delivering shareholder value.

The company's strong performance in the second quarter of 2024 was highlighted by a net income of $2.23 billion, or $5.46 per share, and core operating income of $2.20 billion, or $5.38 per share. Chubb's consolidated net premiums written increased by 11.8% to $13.4 billion, with notable growth in both Property & Casualty and Life Insurance segments. Despite some losses in its investment portfolio, Chubb's book value per share and tangible book value per share saw modest increases of 1.3% and 1.7%, respectively. Buffett's investment strategy, emphasizing increased operating earnings and capitalizing on strategic opportunities, appears well-aligned with Chubb's recent performance.

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