Berkshire Hathaway's newly disclosed second-quarter 13F shows CEO Greg Abel cut the Bank of America stake by about $1.7 billion while adding roughly the same amount to Delta Air Lines. The pairing marks a reversal of one of Warren Buffett's own 2020 calls, when he exited every airline stock Berkshire held.
Berkshire's 13F for the second quarter reached the SEC on Aug. 14, revealing what Abel did with the conglomerate's $299 billion U.S. stock portfolio in his second full quarter as CEO. Apple, American Express, and Coca-Cola — three of the four biggest positions — didn't move. The largest addition, about $17 billion of Alphabet, extended a purchase already disclosed in June.
A bank position kept shrinking
The new information sat in two smaller lines. Berkshire cut its Bank of America stake by about 30.2 million shares, a 5.9% reduction worth about $1.7 billion at quarter-end prices — the largest dollar amount subtracted from any position. The sale extends one of Buffett's last big projects as CEO: Berkshire held just over 1.03 billion Bank of America shares in mid-2024 and has sold every quarter since, cutting the stake to 483.4 million shares, down more than half in about two years across eight consecutive filings.
Berkshire also sold more than half its Capital One position and cut Kroger by 22%, though neither followed a prior trend. Bank of America still ranks among Berkshire's largest holdings, worth about $27.5 billion as of June 30.
Delta returns to the portfolio
Berkshire added about 17.5 million Delta Air Lines shares, growing that position 44% to 57.3 million shares, worth about $5.4 billion at the end of June. That reverses course from spring 2020, when Buffett sold every airline stock Berkshire owned, including Delta, in positions worth north of $4 billion, calling his valuation of the airlines an understandable mistake.
According to The Motley Fool, he told that year's annual meeting: "The world has changed for the airlines." Berkshire then held no airline stock for almost six years.
Delta reentered the portfolio in this year's first quarter at 39.8 million shares, and the second quarter's purchase brings the stake to about 8.8% of the airline, approaching the size of the position Buffett abandoned. The $1.6 billion Berkshire spent growing it nearly matches the $1.7 billion pulled from Bank of America.
Cheap earnings, if growth holds
Delta's own numbers give some context. The airline posted $2.44 per share in GAAP earnings on $19.8 billion of operating revenue, while adjusted earnings of $1.56 per share fell 26% year over year on the highest quarterly fuel expense in the company's history. Management still affirmed full-year guidance of $6.50 to $7.50 in adjusted earnings per share, about 20% growth at the midpoint, along with $3 billion to $4 billion of free cash flow.
Delta also announced a 15% dividend increase beginning next quarter. Adjusted net debt ended June at $13.6 billion. At about $82, the stock trades near 14 times earnings, about 12 times the midpoint of its own guidance — a valuation that looks cheap for 20% guided growth, though airlines remain cyclical and fuel costs volatile.
Source: The Motley Fool
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