Buffett hoarding billions in cash despite Restoration Hardware play

Buffett remains on the hunt for 'an elephant-sized' transaction.

Warren Buffett's Berkshire Hathaway remains on the hunt for its next big transaction but in the meantime, he's sitting on a big heap of cash.

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TickerSecurityLastChangeChange %
BRK.BBERKSHIRE HATHAWAY INC.222.61+3.01+1.37%

Berkshire made several tweaks to its portfolio during the third quarter, including initiating a $206 million stake in the luxury furniture maker Restoration Hardware and a $332 million position in the energy explorer Occidental Petroleum, according to a Securities and Exchange Commission filing released Friday. The conglomerate also reduced its stakes in the tech giant Apple, Wells Fargo and energy company Phillips 66.

TickerSecurityLastChangeChange %
RHRH241.97+8.80+3.77%
OXYOCCIDENTAL PETROLEUM CORPORATION39.01+1.03+2.71%
AAPLAPPLE INC.270.71+5.13+1.93%
WFCWELLS FARGO & COMPANY54.37+1.14+2.14%
PSXPHILLIPS 66113.56+1.02+0.91%

The transactions, however, failed to put a dent in Berkshire’s cash pile, which swelled to a record $128 billion at the end of the third quarter despite Buffett declaring earlier this year that he was on the lookout for an “elephant-sized transaction.” He has repeatedly said that valuations are too expensive for his liking. Buffett's $37 billion acquisition of Precision Castparts was the last big "elephant" that he bagged.

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“In the years ahead, we hope to move much of our excess liquidity into businesses that Berkshire will permanently own," he wrote. "The immediate prospects for that, however, are not good: Prices are sky-high for businesses possessing decent long-term prospects."

Since then, Buffett’s cash pile has grown by about $16 billion and stock-market valuations have only gotten more expensive as the S&P 500 has rallied more than 24 percent this year touching a fresh record. The Dow Jones Industrial Average and the Nasdaq are also sitting at records.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES28015.06+337.27+1.22%
SP500S&P 5003145.91+28.48+0.91%
I:COMPNASDAQ COMPOSITE INDEX8656.528802+85.83+1.00%

Berkshire has lagged behind the broader S&P 500 gaining 7.6 percent in 2019.

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