One of the most successful value investors of all-time shocked investors with the purchase of Apple Inc (NASDAQ: AAPL) shares in 2016.
The stock now makes up a large portion of the Berkshire Hathaway Inc (NYSE: BRK-A)(NYSE: BRK-B) portfolio.
Here’s a look at how shares of the technology giant have performed since the “Oracle of Omaha’s” purchase was disclosed.
What Happened: Legendary investor Warren Buffett unveiled a purchase of 9.8 million Apple shares on May 16, 2016. The shares were purchased by Berkshire Hathaway, the conglomerate led by Buffett.
The Apple shares were bought at an average price of $27.25 at the time, adjusted for a 2020 stock split. The initial stake purchased by Buffett was around $1.1 billion.
Buffett trimmed part of the Apple stock position in 2021, taking some gains from the investment in the technology giant.
Since that time, Buffett has added to the Apple position, making it one of the biggest pieces in the Berkshire Hathaway portfolio and making the company one of the biggest owners of Apple shares.
In the fourth quarter of 2022, Berkshire Hathaway added to its Apple stake, buying over 333,000 shares.
In the first quarter of 2023, Berkshire Hathaway increased its holdings of Apple, adding 20,424,207 shares.
At the end of the second quarter, Berkshire Hathaway owned 915,560,382 Apple shares. This stake constitutes approximately 50% of the firm’s investment portfolio.
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Along with being a large holding of Buffett’s investment portfolio, the large weighting of Apple shares also pays out a substantial amount in dividends to Berkshire Hathaway annually.
Investing $1,000 With Buffett: An investor who chose on May 16, 2016, the Berkshire Hathaway filing date, to buy a stake in Apple has done quite well.
Shares of Apple traded at a split-adjusted level between $22.91 and $23.60 on May 16, 2016. An investment of $1,000 at the day’s high could have bought 42.35 shares of Apple.
Those 42.35 shares of Apple would be valued at $7,531.52 at the time of writing, based on a share price of $177.84 for AAPL.
This represents a hypothetical return of 653.2% over the last seven years, one that has outperformed the overall stock market.
Over the same duration, a $1,000 investment in the SPDR S&P 500 ETF Trust, mirroring the S&P 500, would have grown to $2,140.61. This equates to a theoretical return of 114.1%.
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Buffett is renowned for his value investing approach. His stake in Apple might be viewed by some as an unusual move, considering his inclination towards value rather than growth and his usual caution towards tech stocks. Investors who followed his investment are likely thankful they did.
