Warren Buffett's Berkshire Hathaway Exits General Electric, Buys Into Synchrony Financial

By Maria Armental Features Dow Jones Newswires

Warren Buffett's Berkshire Hathaway Inc. sold its shares in General Electric Co. and opened a big investment in Synchrony Financial, the largest U.S. store credit-card issuer, in the most recent period.

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The firm sold its roughly 10.6 million shares in General Electric in the second quarter. The conglomerate, now under new leadership, had vastly underperformed the stock market and faced pressure from activist investor Trian Fund Management LP.

Berkshire also trimmed stakes in American Airlines Group Inc., Delta Air Lines Inc. and United Continental Holdings Inc. while leaving Southwest Airlines Co. unchanged. Mr. Buffett, who had long criticized airlines as a money-loser for investors after suffering losses in a USAir stake purchased in the 1980s, bought stock in the four airlines in 2016.

The holdings were disclosed Friday in a 13F filing with the Securities and Exchange Commission, a quarterly requirement for investors managing more than $100 million. The report indicates the number of shares held and the value of each stake at the end of the quarter.

In addition to a roughly 17 million share stake in GE spinoff Synchrony Financial, an investment valued at nearly $521 million at the end of the quarter, Mr. Buffett also bought 18.6 million shares in real-estate investment trust Store Capital Corp.

The securities filing also showed that Mr. Buffett trimmed his stakes in International Business Machines Corp. and Wells Fargo & Co., moves that had also been previously disclosed.

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The Omaha, Neb., investor had started lowering his IBM exposure in the previous quarter and selling Wells Fargo shares to remain under a 10% ownership threshold.

Berkshire, which for years avoided technology stocks, first bought IBM stock in 2011, spending more than $10 billion for 5.4% of the company. The 106-year-old tech company has been trying to reinvent itself under Chief Executive Virginia "Ginni" Rometty, as sales and profit have declined for three years straight.

Meanwhile, Mr. Buffett continued to build his position in Apple. As of June 30, he held 130.2 million shares in the iPhone maker, an investment valued at $18.75 billion at quarter's end.

Mr. Buffett's firm -- set to become Bank of America Corp.'s largest shareholder when it exercises its right to buy 700 million shares -- added 17.2 million shares to its Bank of New York Mellon Corp. holdings while maintaining positions in U.S. Bancorp and Goldman Sachs Group Inc.

In other notable moves, Mr. Buffett's firm sharply cut its stake in Wabco Holdings Inc., which last month disclosed takeover talks with German car parts maker ZF Friedrichshafen AG.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

August 14, 2017 18:36 ET (22:36 GMT)