The Motley Foolยท2025-08-22 07:51Core Viewpoint - Warren Buffett is reducing his stake in Apple while increasing investment in a company that has delivered a nearly 48,000% total return since its IPO, reflecting a strategic shift in his investment approach [1][5]. Investment Activity - Berkshire Hathaway's second-quarter 13F filing indicates Buffett has sold over 635 million shares of Apple since mid-2023, representing 69% of Berkshire's position in the company [6][7]. - Despite selling Apple shares, Buffett has consistently purchased shares in Pool Corp. for four consecutive quarters, indicating a shift in focus towards companies with strong recurring revenue streams [13][14]. Company Performance - Apple has seen its shares skyrocket almost 48,000% since its IPO, but its growth has stalled for three years, particularly in physical device sales, which may have influenced Buffett's decision to sell [5][9]. - Pool Corp. benefits from a steady demand for maintenance and repair products, which aligns with Buffett's long-term investment strategy [15]. Valuation Considerations - Apple's trailing-12-month earnings multiple has increased to approximately 35, making it challenging for value investors like Buffett to justify holding the stock given the lack of growth in physical device sales [10]. - Pool Corp. is trading at nearly 28 times forward-year earnings, which is higher than the S&P 500's forward P/E ratio, raising questions about the potential upside for investors [17]. Capital Return Programs - Apple has initiated a significant capital-return program, spending $796.3 billion on stock buybacks since 2013, which has reduced its outstanding share count by 43.6% [12]. - Pool Corp. is also engaging in a capital-return program, having spent over $252 million on stock repurchases and dividends in the first half of 2025 [16].