Warren Buffett is keeping the market guessing yet again — and this time, the stakes could be as high as $4.8 billion.
Barron's reports that Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) boosted the cost basis of its "commercial, industrial, or other" holdings by $2 billion in the first quarter and another $2.8 billion in the second quarter, sparking a frenzy over what's hiding in the company's vault of secrets.
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A $4.8 Billion Clue — And A Very Short Suspect List
The only certainty? It's not a bank, insurer, or consumer products name. That narrows the field — but not by much.
Berkshire has filed for confidential treatment of the mystery stock, the same SEC-sanctioned stealth move it made in late 2023 to quietly build a $6.7 billion stake in Chubb Ltd. (NYSE:CB). The clause gives institutional investors breathing room to load up without tipping off copycats.
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From Chubb To UPS? Investors Play The Buffett Guessing Game
Financial Express mentions industrial heavyweights like United Parcel Service Inc (NYSE:UPS), FedEx Corp (NYSE:FDX), and Caterpillar Inc (NYSE:CAT) making the cut. They note Buffett has been steadily trimming financial holdings, and "are relatively convinced that this confidential treatment stock is an industrial company."
On Reddit, theories are flying. "Warren Buffett has been building a position on a secret stock for a while now… Previously his secret stock was Chubb," wrote user Creative-Cranberry47.
Could UNH Be Buffett’s Mystery Stock?
One theory making the rounds is that the mystery stock could be UnitedHealth Group Inc (NYSE:UNH) — but plenty of Buffett-watchers are skeptical. Reddit user Cash_Flow_Yield claimed, "I heard from people on Reddit that it is going to be a healthcare company that starts with U.”
However, one user differs in opinion: "UNH is in my opinion quite unlikely. Buffett is not an investor that likes to invest in companies under criminal investigation." Adding to the doubt, another user noted, "It's not UNH. UNH is in the healthcare category," and the SEC filings point squarely to the "commercial, industrial, and other" bucket.
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The Logistics Camp: Why UPS Makes More Sense Than FedEx
Others are firmly in the logistics camp. "UPS or FedEx are my expectations," said Ok_Time_8815. "They are beaten down, profitable and predictable companies, which have few competitors at that scale."
Another user drilled down further: "I think UPS makes more sense than FedEx. UPS has a wider moat, I think, and has a ROIC almost double FedEx with the same WACC and similar FCF yield."
While logistics and industrial giants are leading the rumor mill, some market watchers warn against locking in on the obvious. Buffett has surprised before — his Chubb stake was a curveball few saw coming — and the same could be true this time. The $4.8 billion mystery buy could still emerge from an unexpected corner of the market.
Curveballs In Play: Why Buffett Might Skip The Obvious Names
Still, it wouldn't be a Buffett guessing game without the possibility of a left-field surprise. The $4.8 billion stake could just as easily land in less obvious names like Waste Management Inc (NYSE:WM), Union Pacific Corp (NYSE:UNP), Deere & Co. (NYSE:DE), Parker-Hannifin Corp (NYSE:PH), or even a newly streamlined General Electric Co (NYSE:GE).
All fit Berkshire's "commercial, industrial, or other" category, share Buffett's taste for predictable cash flow, strong competitive moats, and long-term demand — and none have been at the center of the current rumor mill.
Still, the reveal could be months away. If Berkshire skips spilling the beans in Thursday's 13-F filings, investors will have to wait until mid-November for the third quarter update.
Buffett, who's set to hand the CEO reins to Greg Abel at year-end, seems determined to go out with one last Wall Street guessing game — and judging by the chatter, it's working.
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