Berkshire Hathaway (NYSE: BRKB) just sold its entire 7.5 million-share stake in Intel (NASDAQ: INTC). Will other investors now follow suit?
Shares of the blue-chip chipmaker have risen steadily of late, gaining 7% since July 24 and more than 8% this year. At $26.76 per share entering the day, the stock was trading at less than 12 times earnings – a very reasonable price, especially for a tech stock.
But Warren Buffett’s investment company apparently felt it was time to sell its Intel shares, doing so at the end of the second quarter. Given Mr. Buffett’s legendary reputation as the world’s foremost value investor, the move seems to indicate that Berkshire Hathaway felt Intel shares had become overvalued.
Might that convince other investors to do the same? After all, many investors model their investment strategies after Buffett’s. That’s why many investors buy Berkshire Hathaway shares to invest alongside him.
So it stands to reason that those who try to “trade like Buffett” might wish to emulate him again by ditching their Intel shares.
In fact, it may already be happening.
News of Berkshire’s Intel sell-off leaked today when an SEC filing reflecting the trade was made public. Perhaps that’s why Intel shares fell 0.8% today and have slid another 0.6% in after-hours trading.
If the sell-off continues tomorrow, it could spell long-term trouble for the world’s most valuable chipmaker.