Bank of New York Mellon (BK) Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions achieve financial freedom through our website, podcasts, books, newspaper columns, radio programs and premium investment services. You are reading a free article with opinions that may differ from The Motley Fool's premium investment services. Become a member of Motley Fool today to get instant access to recommendations from our top analysts, extensive research, investment resources and more, including 401k Gold IRA options. Learn more When Warren Buffett, CEO of Berkshire Hathaway (BRK, A -1.25%) (BRK, B -1.31%), buys a stock, Wall Street and investors pay close attention wisely. This is because climbing on the heels of the Oracle of Omaha has been a very profitable strategy for decades.
Although it is arguably the least loved central financial bank, Buffett and his team joined Citigroup during the first quarter. Although Citi has international difficulties and has faced a lot of litigation, it turns out that the company is also one of the cheapest in relation to its book value among the shares of large banks. With higher interest rates on the horizon, banks are preparing to enjoy a windfall in additional net interest income derived from outstanding variable-rate loans. Buffett considers Apple to be one of the pillars and determinants of Berkshire's value.
It's also a company that checks all the appropriate boxes before your eyes. It has a well-known brand, as well as a very loyal customer base, and its innovation has led the company to increase its sales and profits in turn. In the first quarter, Counterpoint Research notes that the iPhone accounted for half of the entire smartphone share in the United States. But Apple is also a company in transition.
CEO Tim Cook is overseeing an operational change that places greater emphasis on subscription services. As subscription revenues increase to a larger percentage of total sales, Apple should benefit from higher margins, an even more loyal customer base, and a lower amount of cumulative revenue associated with product replacement cycles. But perhaps Buffett's least surprising purchase of all—and one you won't find in the 13F application—is that of his own company. Berkshire Hathaway's first-quarter results show that Buffett and his right-hand man, Charlie Munger, oversaw the repurchase of 2,005 Class A shares and more than 6.8 million Class B shares.
As a reminder, stock repurchasing often has a positive impact on the value of a company's remaining shares. If a company's net income is stable or growing over time, having fewer outstanding shares should result in higher earnings per share. Therefore, share buybacks can make a company appear more attractive from a valuation point of view. Market-leading stocks from our award-winning team of analysts.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance and more from The Motley Fool's premium services. Making the world smarter, happier and richer. For more information on Warren Buffett, including videos of his appearances at Berkshire's annual meetings dating back to 1994, see CNBC's Warren Buffett Archive.
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