Berkshire Invests in Ulta Beauty, Heico as it Retreats from Apple

Warren Buffett’s Berkshire Hathaway has made notable moves in its investment portfolio for the second quarter, acquiring significant stakes in Ulta Beauty and aircraft parts manufacturer Heico, while significantly reducing its position in Apple.

According to a regulatory filing released on Wednesday, Berkshire Hathaway purchased approximately 690,000 shares of Ulta Beauty, valued at $266.3 million, and 1.04 million shares of Heico, worth $185.4 million, as of June 30. Following the announcement, Ulta Beauty’s stock surged 14%, and Heico’s shares climbed 3% in after-hours trading, reflecting investor confidence in Berkshire’s endorsement.

The filing did not specify whether Buffett personally handled these investments, though they are typically managed by Berkshire’s portfolio managers, Todd Combs and Ted Weschler.

Heico Co-President Eric Mendelson expressed his honor at Berkshire’s investment, highlighting the shared emphasis on decentralized business models. Heico’s stock has risen 32% this year, underscoring the positive reception of the investment.

Ulta Beauty, headquartered in Bolingbrook, Illinois, operates approximately 1,395 stores across the United States. Berkshire Hathaway’s other consumer and retail holdings include brands like Benjamin Moore, Dairy Queen, Duracell, and Fruit of the Loom, along with a $2.5 billion stake in grocery chain Kroger.

Berkshire’s involvement in the aerospace sector is also notable, with its $32.1 billion acquisition of Precision Castparts in 2016 remaining its largest purchase. Despite challenges during the pandemic, Buffett has shown continued interest in the aerospace industry.

In contrast to these new investments, Berkshire Hathaway’s second quarter was marked by substantial stock sales, including approximately $77.2 billion worth of stocks. This included a significant reduction of about 390 million shares of Apple, with a remaining stake being closely monitored. The company also exited its investment in Snowflake and Paramount Global.

Berkshire Hathaway’s cash reserves have grown to $276.9 billion from $189 billion at the end of March, following these transactions. Buffett, who turns 94 on August 30, has led Berkshire Hathaway since 1965 and remains one of the most influential figures in investing.