Warren Buffett's Berkshire Hathaway said it has begun investing in the stocks of four large drugmakers, betting on an industry that could benefit when the world begins emerging from the coronavirus pandemic.
In a regulatory filing detailing its US-listed stock holdings as of September 30, Berkshire disclosed $5.7 billion of new healthcare stakes.
This included more than $1.8 billion each in Abbvie, Bristol-Myers Squibb, Merck & Co and $136m in Pfizer.
The filing signals where Buffett and his portfolio managers Todd Combs and Ted Weschler see value. Buffett normally handles large investments for Berkshire's $245.3 billion stock portfolio himself.
"Covid-19 has made us think differently about healthcare," said James Armstrong, president of Henry H Armstrong & Associates in Pittsburgh, which owns Berkshire stock.
"The sector has become more efficient as big drug companies partner with smaller, inventive rivals," Armstrong added. "But you will always need companies with scale for manufacturing and distribution, including vaccines with global application."
During the third quarter, Berkshire also took a $276m stake in wireless phone company T-Mobile US.
It sold a $1.3 billion stake in Costco Wholesale, which benefited as people stocked up on groceries and home supplies during the pandemic, and pared holdings in four banks -JPMorgan Chase, Wells Fargo, PNC and M&T.
The stake in JPMorgan, where Combs is a director, fell by 96%.
Berkshire also bought more stock in the grocer KrogerN, sold some stock in mining company Barrick Gold, and confirmed it bought more Bank of America stock while trimming its Apple stake.
The healthcare bet is structured similarly to the more than $6 billion wager that Buffett made on the four largest US airlines.
Buffett sold Berkshire's airline holdings in April, saying the pandemic had changed the industry and made its outlook uncertain.
Other new investments in the quarter included a $6 billion stake in five Japanese trading houses and a $1.5 billion wager on newly public data storage company Snowflake.
Berkshire also has more than 90 operating units including Geico car insurance, BNSF railroad and Dairy Queen ice cream.