Three Years Running: Major Business Tycoon Sells More Stocks Than He Buys
For the third year in a row, the influential business mogul has been selling more stocks than he's been buying. The latest statistics show a sale of $12.5 billion worth of shares, with only $6.4 billion purchased. This pattern has been observed for the past twelve quarters.
An Increase in Cash Reserves
Meanwhile, the accumulation of cash in the company's reserves has surged to a new all-time high of $382 billion. This increase is due to a 34% jump in operating profits. Interestingly, the company has refrained from buying back stocks for the fifth successive quarter.
As the stock portfolio of the company has decreased, there's been a shift of funds towards Treasury debt. However, with the recent decline in short-term rates, the net investment income for the third quarter fell by 13%, down to $3.2 billion.
A Careful Approach to Stock Investments
The company started adopting a more cautious approach to stock investing in 2022. This was when the Federal Reserve initiated its most assertive rate-raising campaign in over four decades in an attempt to control inflation. The resulting impact on stock valuations didn't stimulate the mogul's interest in seeking bargains. The subsequent decision by the Fed to reduce rates led to a rally that pushed stock prices to new highs.
Even the substantial market downturn in April, triggered by the unveiling of unexpected tariffs, didn't entice the mogul to break his pattern. During the second quarter, the company sold $3 billion in stocks.
A Quick Market Recovery
The markets recovered rapidly, establishing new records just a few months later, with companies associated with AI leading the charge. In contrast, the mogul's company shares have depreciated by 12% since May. This was when the mogul announced his decision to retire as CEO by the end of the year and hand over the reins to Greg Abel.
While the mogul is expected to maintain his chairman position, he seems to be refraining from making dramatic moves, possibly to allow Abel a clean slate. Abel has already been assuming a more prominent leadership role prior to the announcement in May.
A Significant Acquisition
Recently, the company agreed to acquire the chemical division of a major oil company for a hefty sum of almost $10 billion. This could potentially be the mogul's last significant deal. It's also expected to increase the company's almost 30% stake in the parent oil company.
This acquisition, the largest since the purchase of insurer Alleghany in 2022, was noteworthy as it was the first announcement from the company that quoted Abel and made no mention of the current CEO.
"It's a brilliant move. It's definitely a win for the company as it also benefits the company they own 30% of. The decision is entirely self-serving, logical, and extremely beneficial," commented a top energy analyst last month.