Warren Buffett Sells Apple Stock and Buys a Restaurant Stock Up 3,100% Since Its IPO

Group 1: Berkshire Hathaway's Investment Strategy - Warren Buffett manages approximately 90% of Berkshire Hathaway's equity securities portfolio, with Todd Combs and Ted Weschler handling the remainder [1] - Buffett sold 100 million shares of Apple in Q3, reducing Berkshire's stake by 25%, totaling over 615 million shares sold in the last four quarters [2] Group 2: Apple Inc. - Apple has established brand authority and pricing power, with the average iPhone price being three times higher than that of the average Samsung smartphone during Q3 [5] - The company has expanded its focus beyond hardware, with services like App Store downloads and iCloud storage contributing to monetization of over 2.2 billion active devices [6] - Apple reported a 6% revenue increase in Q4 FY2024, driven by double-digit growth in services and mid-single-digit growth in Mac, iPad, and iPhone segments, with non-GAAP earnings rising 12% to $1.64 per diluted share [7] - The price-to-earnings (P/E) ratio for Apple increased from 26 in April to 42 in December, raising concerns about overvaluation despite expectations of 10% annual earnings growth [8][9] Group 3: Domino's Pizza - Domino's is the largest pizza company globally, delivering one in every three pizzas in the U.S., and has built a reputation for value through promotions and a loyalty program [10] - The company has reported same-store sales growth for seven consecutive quarters, outperforming competitors like Papa John's and Pizza Hut [11] - In Q3, Domino's revenue increased 5% to$ 1 billion, missing Wall Street's 7% expectation, while GAAP net income remained flat at $4.19 per diluted share, better than the anticipated 13% decline [12] - CEO Russell Weiner expressed confidence in achieving U.S. same-store sales growth of 3% or more annually, with guidance for approximately 8% annual income from operations growth through 2028 [13] - Wall Street expects Domino's earnings to grow at 8% annually, but the stock is considered expensive at a valuation of 26.6 times earnings [14]