Greg Abel exits Amazon, buys 3 million Macy's shares for Berkshire

Berkshire Hathaway sold its 2.3 million Amazon shares and bought 3 million Macy's shares in Greg Abel's first quarter as chief executive officer.

"Abel is executing faster and more decisively than I could have," Warren Buffett, Berkshire's chairman, said of the Taylor Morrison acquisition.

The Amazon exit involved shares managed by former Berkshire investment manager Todd Combs, who left in December for JPMorgan. The position represented a small portion of Berkshire's $263 billion equity portfolio as of the fourth quarter. Abel and his team liquidated several Combs-managed holdings during the period, with the conglomerate becoming a net seller of stocks for a 14th consecutive quarter. Still, Berkshire bought about $16 billion worth of shares in the period, its biggest outlay in four years, and resumed buybacks in March after a six-quarter pause.

The Macy's purchase adds about 3 million shares at a time when the retailer trades at 10.2 times forward earnings, less than half the consumer discretionary sector average of 26.2 times. The department store chain has struggled with declining mall foot traffic and the shift to e-commerce over the past decade, but recent results show improvement. Macy's reported first-quarter net sales of $4.7 billion, up 1.8 percent from a year earlier, with comparable sales rising 3 percent. Adjusted earnings per share reached $0.13, an 18 percent increase, beating Wall Street estimates. The company raised its full-year 2026 guidance.

Macy's has closed dozens of unprofitable stores and sold real estate assets while investing in its online business. The company's survival through a period that claimed many legacy retailers may reflect the value of its property portfolio, which includes flagship locations in major US cities. Berkshire's existing homebuilding and real estate operations through Clayton Homes and Berkshire Hathaway HomeServices could benefit from cross-selling opportunities.

The Macy's purchase follows a series of major capital deployment moves by Abel. Berkshire agreed to buy homebuilder Taylor Morrison for $8.5 billion and invested $10 billion in Alphabet through a private placement. The Alphabet investment gives Berkshire exposure to artificial intelligence through Google's search and cloud businesses, while the Taylor Morrison deal doubles down on housing at a time when the US faces a shortage of about 4 million homes.

The moves show a rotation from big technology into value-oriented retail and housing stocks under Abel's leadership. Berkshire held about $380 billion in cash at the end of March, giving it ample capacity for further portfolio shifts. The Macy's position, while small relative to Berkshire's size, represents a contrarian bet on brick-and-mortar retail at a time when most investors are avoiding the sector. Investors will watch Berkshire's second-quarter 13-F filing, due in August, for the full scope of Abel's repositioning.

This article is for informational purposes only and does not constitute investment advice.