The mystery stock that Warren Buffett had kept secret for more than six months has finally been revealed, and it is Swiss insurer Chubb (CB).
Buffett’s holding company, Berkshire Hathaway (BRK.A / BRK.B) has purchased nearly 26 million shares of Zurich-based Chubb, building a stake worth $6.7 billion U.S.
The property and casualty insurer is now the ninth largest holding in Berkshire’s equity portfolio.
Chubb is one of several insurance companies that Berkshire Hathaway owns. The conglomerate owns outright both Geico and General Re, as well as a number of smaller home and life insurance companies.
In 2022, Berkshire Hathaway acquired insurance company Alleghany for $11.6 billion U.S. Buffett has said that he likes insurance companies because of the cash they generate through the premiums they collect.
Buffett had kept the purchase of Chubb stock a secret for two consecutive quarters, requesting confidential treatment from the U.S. Securities and Exchange Commission (SEC) while he built the stake.
Buffett has previously kept his stock purchases secret, most recently keeping confidential his 2020 purchases of Chevron (CVX) and Verizon (VZ).
There had been widespread speculation that the mystery stock would be a bank or insurance company given Buffett’s fondness for both types of businesses.
Chubb’s stock is up 10% on news that Buffett has been buying shares in the company. Over the last 12 months, Chubb’s share price has risen 27%.
The Swiss insurer also has a low valuation, trading at 11 times future earnings estimates. Buffett tends to buy stocks that have a price-to-earnings ratio of 15 or lower.
And Chubb pays a quarterly dividend of $0.86 U.S. per share, giving the stock a yield of 1.36%.
