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Buffett's Berkshire dumps GE but bets further on banking sector

  • Berkshire previously had 10.6 million shares in GE, recently had a new CEO take over.
  • Buffett's conglomerate also loaded up on shares of Bank of New York Mellon and Synchrony Financial in the second quarter, a filing shows.
  • Berkshire took additional shares of General Motors.

Warren Buffett's Berkshire Hathaway sold its stake in General Electric as of the end of June, according to a regulatory filing on Monday.

The conglomerate had previously held 10.6 million shares of GE, according to its regulatory disclosure in May. John Flannery became CEO of General Electric on Aug. 1 after Jeff Immelt stepped down after 16 years. Flannery was previously president and CEO of GE Healthcare.

Berkshire appears to be keeping its hand in a legacy part of GE. It reported a 17.5 million share stake in Synchrony Financial, the financing arm of GE that was spun out in a 2014 initial public offering. Shares of Synchrony are down more than 18 percent this year, but they bounced up over 4 percent in after-hours trading Monday.

Berkshire also increased its holdings of Bank of New York Mellon by 52.2 percent, to 50.2 million shares.

Buffett has embraced the financial sector, which many believe is poised for growth after years of historically low interest rates and extra regulation. In June, Berkshire announced it would convert warrants it has in Bank of America to 700 million common shares, which will make it the bank's biggest shareholder once that conversion is complete.

Omaha, Nebraska-based Berkshire also raised its stake in General Motors by 20 percent in the second quarter, to 60 million shares. The automaker's shares are up 1.8 percent this year after battling a proxy contest by activist hedge fund Greenlight Capital, run by David Einhorn. GM shareholders voted overwhelmingly in support of the company in June, a defeat for Einhorn. Greenlight reported it held 59.7 million shares of GM at the end of June

Berkshire's GE holdings were just 0.12 percent of the outstanding shares. GE shares are down nearly 20 percent this year.

Buffett struck a deal during the financial crisis to invest $3 billion in GE and later converted warrants to common shares in the blue chip company in a deal similar to those he reached with Goldman Sachs and Bank of America.

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