Warren Buffett's Berkshire Hathaway reworked its financial-sector bets amid regional bank turmoil, exiting U.S. Bancorp and Bank of New York Mellon even as it placed a wager on Capital One Financial. Capital One surged as much as 9.6%.
Berkshire's move out of several financial stocks and into Capital One in the first quarter, detailed in a regulatory filing Monday, comes after Buffett said publicly he was cooling on the sector. Bank failures earlier this year and concern about liquidity at various regional lenders have shaken finance.
This is far from Berkshire's first revamp of its financial stock picks. In May of last year, the conglomerate disclosed it had fully cut its position in Wells Fargo, which once ranked as its biggest common-stock bet. Berkshire unveiled new positions in auto-lender Ally Financial and Wall Street titan Citigroup in that same filing, and still holds those companies.
Berkshire had been trimming U.S. Bancorp and BNY Mellon holdings as far back as the third quarter of last year. In an interview with CNBC in April, Buffett said he decided to adjust his exposure to the sector after noticing some firms prioritizing earnings over "basic banking principles."
The conglomerate was a net seller of equities in the quarter, pocketing $10.4 billion from stock sales after deducting purchases. While the sale of financial names played a part in that, Berkshire also took the opportunity to adjust its exposure to industrial firms.
The company closed out its position in Taiwan Semiconductor Manufacturing after Buffett said he was worried about the stock's exposure to geopolitical risk. Its position in Chevron was trimmed by about 19%. Holdings of chemical maker Celanese and car manufacturer General Motors were also dialed back.
Capital One rose as high as $97.70 in extended New York trading, after closing at $89.12.
The cut to the TSMC stake completes a reduction Buffett first embarked on in the first quarter of late last year. Buffett slashed his holding of the chipmaker just months after disclosing a major stake in a quick reversal that spooked investors.
Buffett, Berkshire's chairman and chief executive officer, said during his annual meeting earlier in May that Taiwan Semi was one of the best managed and most important in the world, but that he didn't like the location — a reference to rising tensions between the island and China.
"I feel better about the capital that we've got deployed in Japan than in Taiwan," Buffett said. "I wish it weren't so, but I think that's the reality, and I re-evaluated that in the light of certain things that were going on."
Berkshire expanded its position in Occidental Petroleum even after dismissing speculation that it might buy the oil giant outright.
The company said in a statement that holdings from its General Re unit would be included in its filing for the first time. Those positions were previously reported separately. The Berkshire subsidiary held shares in companies that represent some of its parent's largest positions, including Apple, Bank of America and Chevron.
