Berkshire Hathaway Sells Apple and Buys THIS Stock... |
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Hey Folks, In the world of investing, few moves are as closely scrutinized as those of Warren Buffett. Over decades, the "Oracle of Omaha" has built Berkshire Hathaway into a behemoth. But even legends make unexpected plays—and this one has investors talking. Berkshire Hathaway has been trimming its Apple holdings while making a surprising new bet: Domino's Pizza. | | | Yes, Domino's. The fast-food chain famous for delivering pizzas in 30 minutes or less is now one of Berkshire's latest investments. In the September quarter, Buffett's team purchased over 1.27 million shares of Domino's, worth around $560 million at the time of writing this. For a company renowned for tech and consumer staples investments, this move marks a striking shift... Apple has long been Buffett's darling, but the tech giant's valuation is becoming a sticking point. | | | At 38 times trailing earnings, it's trading at historically lofty multiples. Meanwhile, its hardware sales—iPhones, iPads, and Macs—have plateaued. While services revenue has grown, Buffett's value-investor instincts may be flashing caution signs. Selling Apple locks in substantial gains, but the shift to Domino's raises eyebrows for its contrast. Domino's, on the other hand, is a Wall Street marvel. Since its 2004 IPO, the stock has skyrocketed over 7,000%, making it one of the more successful investments in recent history. Its transformation from a struggling pizza chain to a tech-savvy delivery powerhouse is the stuff of business case studies. | | | Buffett has long admired companies with visionary management teams, and Domino's fits that mold. The company's bold reinvention began in the early 2010s with an honest admission: its pizza wasn't good. That campaign, paired with investments in technology and delivery infrastructure, turned public perception around. Today, Domino's isn't just a pizza company—it's a logistics powerhouse. Its proprietary tech systems ensure consistent quality and efficiency, aligning perfectly with Buffett's penchant for operational excellence. | | | For Buffett, it's not just about tech and strategy. He prizes companies that reward shareholders. Domino's ticks that box, boasting a track record of dividend increases for more than a decade and regular stock buybacks. This focus on returning capital to investors mirrors the qualities of many other Berkshire holdings, like Coca-Cola and American Express. Still, Domino's isn't exactly a value investor's dream at first glance... Its forward price-to-earnings ratio of 27 suggests it's no bargain. But Buffett's track record shows he's willing to pay a premium for proven winners. | | | Critics may argue that Berkshire is leaving money on the table by selling Apple, especially as AI-driven growth boosts its outlook. But the move highlights a core Buffett principle: buy what you understand. Domino's, with its straightforward business model and strong management, aligns well with that philosophy. Anyways...
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