Apple Inc. Headlines Warren Buffett's Berkshire Hathaway Inc. Picks

Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) has added or increased its stake in at least five companies, including Apple Inc. (NASDAQ:AAPL)

May 16, 2016 at 11:16 AM
facebook twitter linkedin


According to a Securities and Exchange Commission (SEC) filing this morning, Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) has made numerous changes to its portfolio, including new or increased stakes in several big-name companies. And while the Oracle of Omaha may be busy backing a possible Yahoo! Inc. (NASDAQ:YHOO) bidder, stocks getting a boost from Buffett's BRK.A include Dow components Apple Inc. (NASDAQ:AAPL), International Business Machines Corp. (NYSE:IBM), and Visa Inc (NYSE:V), as well as financial firm Bank of New York Mellon Corp (NYSE:BK) and energy concern Phillips 66 (NYSE:PSX).

AAPL is 3.2% higher at $93.44 --and the top gainer among Dow stocks -- after BRK.A announced a brand new stake in the tech titan, totaling 9.8 million shares. Longer term, the security is off 11% year-to-date, recently tagged its longest losing streak since 1998, and hit a fresh annual low last week. Short-term options traders, meanwhile, have been near a call-skewed extreme. Specifically, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.59 ranks lower than 99% of the past year's readings. And today's jump has calls leading in the options pits so far, with AAPL's May 92 and 93 calls likely seeing some buy-to-open activity.

IBM has been drifting lower since hitting a year-to-date high of $153.52 on April 4, down 3%. Today, though, the shares are 0.8% higher at $148.88, after Berkshire Hathaway added nearly 200,000 shares to its stake. Elsewhere, short sellers have been increasing their exposure to shares of a company that recently reported its worst revenue in 14 years, with short interest up 3.6% in the most recent reporting period. However, the bearish bandwagon is far from full, with these bearish bets making up just 2.2% of International Business Machine Corp.'s available float. The equity could encounter a fresh wave of selling pressure, should short sellers continue to climb on board.

V is up 0.8% at $77.46, and just a chip-shot away from its year-to-date breakeven mark, after BRK.A increased its position on the credit card giant by 3.6%. Meanwhile, the stock has been consolidating near its 40-day moving average after hitting a record high of $81.73 in mid-April, while off the charts, speculators have been digesting news of a possible big-cap lawsuit. While analysts are optimistic -- 15 out of 20 call the equity a "buy" or better -- options traders have been unusually bearish of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Visa Inc's 10-day put/call volume ratio of 0.75 is higher than 79% of all readings taken in the last 12 months.

BK has added 0.5% at $39.63 -- paring its 2016 loss to less than 4% -- after BRK.A raised its stake by 3.6%. In fact, the shares are up 23% from their mid-February 52-week low of $32.20, but pessimism is still running high in the options pits. The security's 10-day put/call volume ratio on the ISE, CBOE, and PHLX stands at a whopping 13.84 -- in the 95th percentile of its annual range. And short interest is on the rise, too, up more than 22% in the last two-week reporting period. However, these bearish bets account for just over 1% of Bank of New York Mellon Corp's available float.

PSX, meanwhile, is down 0.4% at $77.39, even after BRK.A boosted its stake in the company by nearly 23%. However, this just continues a sharp downtrend for the stock that begin with a post-earnings bear gap in late April. Longer term, the equity has shed 17.8% since touching an all-time high of $94.12 last November. More than half of analysts still hold a "buy" or better recommendation on the stock, but options traders haven't been so upbeat. At the ISE, CBOE, and PHLX, Phillips 66 holds a 50-day put/call volume ratio of 3.78 -- higher than 88% of the past year's readings.

Schaeffer's Weekly Volatility Trader subscribers just made 90% GAINS on an Apple Inc. straddle! Sign up now for a discounted 30-day trial.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners