Warren Buffett wants a 5% stake in Apple
Just days after Berkshire Hathaway bought a further 75 million Apple shares, Buffett said he wants more
Warren Buffett said he would be happy if his conglomerate Berkshire Hathaway owned more than 5 per cent of Apple's stock, including if the iPhone maker bought back more of its shares.
Mr Buffett made his assessment before tens of thousands of Berkshire shareholders attending the conglomerate's annual meeting on Saturday in Omaha, Nebraska.
It came two days after Mr Buffett revealed having bought 75 million additional Apple shares, and four days after Apple said it may buy back $100 billion of stock.
"I'm delighted to see them repurchasing shares," Mr Buffett told Berkshire shareholders at the conglomerate's annual meeting.
"I love the idea of having our 5 per cent, or whatever it is, maybe grow to 6 or 7 per cent without our laying out a dime. But you have to have a very, very special product, which has an enormously widespread ecosystem, and the product is extremely sticky."
Apple's share price hit a record high after Buffett revealed having boosted Berkshire's already large stake in the Cupertino, California company to roughly 240 million shares, now worth some $44bn.
While Mr Buffett "very much" approves of Apple repurchasing shares, he and Mr Munger expressed skepticism that Apple could find meaningful acquisitions on which to spend cash.
"The reason companies are buying their stocks is that they are smart enough to know it's better for them than anything else," Mr Munger said. He said he and Mr Buffett do not approve of all repurchase strategies.
Mr Buffett's initial commitment to Apple surprised many given his usual aversion to companies in the technology sector, but the billionaire views Apple more as a consumer products company.
The investment also helps Mr Buffett deploy Berkshire's cash and equivalents while he looks for his first major acquisition since paying $32.1bn (Dh117 billion) for aircraft parts maker Precision Castparts in January 2016.
Even after the Apple investment, Berkshire's holdings of cash and equivalents was $108.6bn, the company said on Saturday.
Buffett made his comments in response to a shareholder question posted by CNBC journalist Andrew Sorkin.
"$100 billion is a lot of money," the question concluded.
"I used to think so," Mr Buffett joked, prompting laughter and applause.
Updated: May 7, 2018 03:11 PM