NEW YORK — Investment guru Warren Buffett is apparently losing faith in Nike Inc. — at least in the short term.
Buffett’s Berkshire Hathaway Inc., which operates predominantly as an insurance company, sold more than half its stake in the footwear and apparel firm’s common stock during the fourth quarter, according a Form 13-F filed with the Securities and Exchange Commission on Monday.
The company now owns 2.5 million shares of Nike, or roughly 1 percent of Nike’s 264.1 million total shares outstanding. Previously, Buffett’s firm owned six million shares.
According to Merrill Lynch analyst Virginia Genereux, shares of Nike traded between $76.62 and $92.43 during the fourth quarter, making Berkshire’s profit between $268.2 million and $323.5 million.
Genereux noted in a Tuesday research report that Berkshire’s sale of the Nike shares “represents the partial unwinding of a three-and-a-half-year-old position.” Shares of Nike were scooped up by Berkshire around June 2001. Berkshire sold some around June 2002 and then bought more around September 2002.
An important point stemming from the stock sale is Buffett’s “astute” investment ability, Genereux explained. “Berkshire previously owned Nike for two quarters in 2000, effectively (and quite profitably) straddling two big earnings misses in February of 2000 and 2001,” she said.
As a result, Genereux said “while several investors have responded that Nike looks more compelling than many other large cap names, and valuation is not stretched, we believe that Nike fundamentally remains a top-line story, and that top line is slowing, especially relative to the stellar streak of the past 18 months.”
Indeed, in other forms filed with the SEC on Monday, institutional investment firm Janus Capital Management upped its investment in Nike by 5 percent in the fourth quarter, while Fidelity Management & Research Corp. also beefed up its stake by 7.5 percent, the analyst noted. Wellington Capital Management, however, decreased its stake of Nike shares by 19 percent.
Incidentally, the same Monday Form 13-F filing also showed that Berkshire Hathaway owns 5.3 million shares of Costco Wholesale, 15.4 million shares of Gap Inc., up from a prior stake of 15 million, and 8 million shares of Pier 1 Imports.