Berkshire Hathaway has made Barrick Gold Corp – the second-biggest precious metal mining company in the world – the latest addition to its growing investment in the second quarter, Bloomberg reported.
The Warren Buffett-led holdings group secured a new spot in Barrick, acquiring almost 21 million shares of the gold miner's outstanding stock, currently worth around $565 million, documents of a regulatory filing showed, Friday.
Berkshire disclosed it has unloaded shares of some of the most prominent American lenders, cutting its shares in JPMorgan Chase & Co and Wells Fargo, and ending a partnership with Goldman Sachs Group. Berkshire also disposed of shares in PNC Financial, BNY Mellon, US Bancorp, Mastercard, and Visa.
Buffett has not totally lost confidence in the banking business, after telling stakeholders in May that lenders were financially sound and had the capacity to deal with the ongoing global health crisis.
Buffet still has major stakes in several banks including Bank of America, where just this July Berkshire poured in over $2 billion and snagging nearly 12 percent shares valued at over $27 billion.
Barrick Gold's shares have gained from the increasing prices of the yellow metal, which registered a record last week, and was up 3.2 percent during extended sessions after report of Berkshire's investment. The Toronto-based miner's shares settled at 26.99 on Friday. The company did not immediately respond for comment.
The Berkshire CEO's latest investment is very unexpected considering that Buffet has been very vocal about gold, calling it "an inferior investment to businesses." In his 2011 stockholder note, he said the yellow metal is "neither of much use nor pro-creative."
Gold mining companies are now taking advantage of rising prices of the commodity that are elevating profit margins as manufacturing costs have remained firm, making them hugely enticing for investors. Giant miners like Newmont Corp. has been very optimistic about luring back investors who withdrew from the market years ago.
The surge in prices of the yellow metal has lifted investors' inclination to allot billions of money into the business, with gold miners securing $2.5 billion in secondary equity bids in the current quarter. Gold has become so in demand as central bank interest-rate reductions and a drop in federal bond output strengthened its appeal.
Meanwhile, Buffet's holding group included to its portfolio grocery chain Kroger, purchasing 3 million more shares in the second quarter. Berkshire last acquired nearly 22 million shares in the company, a stake worth around $743 million at end of the quarter.
