Buffett’s Successor Buys Delta Stock
The purchase was one of several moves made by Abel in the first quarter, his first in the CEO role.
Buffett famously avoided airline stocks for the most part, once calling the sector a “bottomless pit” back in a shareholder letter in 2007.
“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines,” Buffett said in 2007.
Buffett didn’t completely avoid the airline sector, even betting on the big four airlines in the 2020s before selling the stocks at a loss.
At the end of the first quarter, the stake in Delta was valued at around $2.65 billion and was the 13th largest in the Berkshire Hathaway investment portfolio.
Delta Stock Jumps, Berkshire Position Grows
It is unclear what price Berkshire Hathaway paid for Delta stock. The stock was purchased in the first quarter, when shares traded between $55.28 and $76.34.
The starting price would go a long ways in determining the current profit for Berkshire Hathaway, but one thing is for sure and that is that the Delta stock buy from Abel in the first quarter is up since the end of the first quarter.
To track a potential return on the investment, we calculate the closing value at the end of the first quarter ($2,646,532,634.88) and the value of the stock today ($3,435,954,147.36).
The difference between these numbers is currently $789,421,512.48, which is how much the stock position has gained since the end of the first quarter.
What’s Next for Delta Air Lines
It’s not all smooth sailing for Delta or the airline sector with Middle East tension leading to higher gas prices and potential margin disruption.
Delta recently reported quarterly financial results, beating analyst estimates for both earnings per share and revenue.
The company has now beaten analyst estimates for earnings per share in seven straight quarters and beaten analyst estimates for revenue in more than 20 straight quarters.
Berkshire Hathaway will submit its second-quarter 13F by Aug. 14, which will reveal if it still owns the Delta shares or took profits during the quarter. The filing could show that the position was increased or decreased during the second quarter as well.
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