In a span of seven years, Warren Buffet's investment in his preferred stock totals $78 billion, yet his current focus lies on shares of a legal monopoly.
Warren Buffett, the billionaire CEO of Berkshire Hathaway, has been making headlines lately for his unusual selling spree of stocks. Over the past 11 consecutive quarters, Buffett has sold a total of $177.4 billion worth of stocks. Despite this, Buffett maintains a significant investment in Sirius XM Holdings, owning approximately 124.8 million shares, which equates to a 37.1% stake in the company. Sirius XM's stock symbol is NASDAQ: SIRI. Buffett's preference for Sirius XM is evident, but he has not purchased shares of his favorite stock for 13 consecutive months, from June 2024 through June 2025. The reason for his abstinence is likely due to valuation concerns, as Berkshire Hathaway's stock has been trading at a 60% to 80% premium to book value for much of the last 13 months. Berkshire Hathaway's stock symbol is NYSE: BRK.B, and its Class A shares (BRK.A) have rallied nearly 5,940,000% over the past 60 years. The benchmark S&P 500 has also risen by approximately 44,000% over the same 60-year period, reflecting the overall growth in the stock market. Berkshire Hathaway's market cap is $1.1 trillion, making it one of the largest companies in the world. The company's share repurchase activity can be found in its quarterly operating results, with the board amending its share repurchase rules on July 17, 2018. Sirius XM, on the other hand, has a unique position in the satellite-radio industry as a legal monopoly. The company generates 76.8% of its net revenue from subscriptions, while only 19.6% comes from advertising. This subscription-based revenue model tends to have fewer peaks and valleys compared to its competitors, as indicated by Sirius XM's operating cash flow. Sirius XM's forward P/E ratio is historically low at 7.6, suggesting that the market may be undervaluing the company. This could potentially present an opportunity for Buffett to re-enter the stock market when he deems the valuation more favorable. In conclusion, Warren Buffett's selling spree and current abstinence from buying Berkshire Hathaway's stock may be a strategic move driven by valuation concerns. Meanwhile, his significant investment in Sirius XM highlights his confidence in the company's unique position and potential for growth in the satellite-radio industry.
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