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.
 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners