Berkshire invests in Ulta Beauty, Heico as it retreats from Apple

By Jonathan Stempel

(Reuters) -Warren Buffett’s Berkshire Hathaway (NYSE:) acquired stakes in cosmetics store chain Ulta Beauty (NASDAQ:) and aircraft parts maker Heico during the second quarter, when it also significantly cut its huge stake in Apple (NASDAQ:).

Berkshire owned about 690,000 Ulta Beauty shares worth $266.3 million and 1.04 million Heico shares worth $185.4 million as of June 30, according to a Wednesday regulatory filing containing its U.S.-listed holdings as of that date.

Ulta Beauty shares soared 12% and Heico shares rose 3% in after-hours trading, reflecting a belief that the companies won Berkshire’s and perhaps Buffett’s stamp of approval.

Wednesday’s filing did not say whether Buffett did the buying, though his portfolio managers Todd Combs and Ted Weschler normally oversee Berkshire’s smaller stock investments.

Ulta did not immediately respond to requests for comment. Heico was not immediately available for comment.

While better known for owning Geico car insurance, the BNSF railroad and large stock holdings such as Apple, Buffett’s conglomerate has stakes in many consumer and retail businesses.

Its business portfolio includes brands such as Benjamin Moore, Dairy Queen, Duracell and Fruit of the Loom, and about $2.5 billion of stock in grocery chain Kroger (NYSE:).

Ulta has about 1,395 stores in all 50 U.S. states.

Berkshire is also familiar with the aerospace sector, having paid $32.1 billion in 2016 for aircraft parts maker Precision Castparts, still its largest purchase of an entire company.

Buffett later admitted he overpaid for Precision, which struggled with falling air travel during the COVID-19 pandemic and the grounding of Boeing (NYSE:) 737 MAX jets.

SNOWFLAKE EXIT

Ulta Beauty and Heico were among Berkshire’s few purchases in a quarter marked by a hasty retreat from stocks.

Berkshire sold $77.2 billion of stocks during the period, including about 390 million shares of Apple, close to half its stake.

It also exited a nearly $1 billion investment in cloud computing company Snowflake (NYSE:) and its remaining stake in media company Paramount Global.

Stock purchases totaled just $1.6 billion.

The selling left Berkshire with $276.9 billion of cash and equivalents, up from $189 billion at the end of March.

Buffett’s company has not said if it sold more Apple in the third quarter, though Buffett said in May he expected the iPhone maker to remain its biggest stock holding by year-end.

Berkshire has sold more than $3.8 billion of stock in Bank of America, its second-largest stock holding, in the third quarter. It stopped selling at least temporarily after the bank’s share price fell 12% from mid-July.

During the second quarter, Berkshire also reduced its stakes in Capital One, Floor & Decor Holdings (NYSE:), Louisiana-Pacific (NYSE:) and T-Mobile, and added to stakes in Chubb (NYSE:) and Sirius XM (NASDAQ:).

Buffett turns 94 on Aug. 30. He has run Berkshire since 1965.