Recently, the Form 13F reports have arrived, and what everyone is most concerned about is the stock holdings of the stock god Buffett in the US.

Generally speaking, there are two aspects to study in the 13F reports: one is to look at the top ten holdings, and the other is to look at the changes in holdings for the quarter.

From these two aspects, the biggest change in the stock god's 13F report this quarter is reducing the shareholding of Apple (AAPL) and adding a mysterious position in Chubb Ltd, CB.

Regarding the reduction in Apple holdings, this matter was anticipated at the shareholders' meeting before, and Buffett explained it as a tax avoidance strategy.

So, the biggest highlight of this 13F report is the addition of the mysterious position in Chubb Ltd. This content will focus on explaining who Chubb Ltd is, why Buffett is interested in it, and analyze the trends of its stocks.

What is the background of Chubb Ltd?

As of the first quarter of 2024, Buffett's Berkshire Hathaway holds nearly 25.92 million shares of Chubb Ltd, worth $6.7 billion, accounting for 2.03% of his US stock portfolio, becoming the ninth heaviest stock in Buffett's portfolio.

It is called Buffett's most mysterious holding because Buffett started building a position in Chubb Ltd in Q3 of last year, then added to it for two consecutive quarters, but these quarters' 13F reports did not disclose this position, and the shareholders' meeting also made no mention of it, reportedly because Buffett requested non-disclosure.

Who exactly is this company that requires the mysterious creation of positions by the stock god?

Chubb Ltd is an insurance company headquartered in Switzerland, with insurance business covering 55 countries and regions globally, involving almost all insurance categories including property, life, and reinsurance, ranking fifth among global listed insurance companies in terms of market cap.

In 2023, the company's revenue was $49.74 billion, a 15.40% year-on-year growth, with a net profit of $9.015 billion, a 71.85% year-on-year growth.

In terms of revenue growth, Chubb Ltd demonstrates certain growth potential, with good revenue growth over the past 5 years. In terms of profitability, the company's net profit margin reached 18% in 2023, indicating decent earnings capability.

Furthermore, Buffett has always placed great emphasis on shareholder returns, such as dividends and share buybacks. Chubb Ltd excels in this aspect as well.

In 2023, Chubb Ltd paid dividends of $3.41 per share, calculated based on the closing price of $264.14 per share as of May 20, 2024, resulting in a dividend yield of around 1.3% for Chubb Ltd.

Some investors may consider the dividend yield not high, but Chubb Ltd's strength lies in its stability. The company has been paying dividends continuously for 31 years, and increases dividends every year.

Overall, Chubb Ltd is a company with good growth potential and stable dividends.

Technical Analysis

Driven by news of Berkshire Hathaway 13F holdings, Chubb Ltd's stock price reached a high of $275.41, hitting a historical high.

From a technical analysis perspective, Chubb Ltd's stock price has been strong since July 2023, rising from a low of $181.65 in July last year to a high of $275.41 in May 2024, achieving a 51.6% increase in less than a year.

Indicators Interpretation:

• Trend analysis: The daily chart shows that Chubb Ltd's stock price has been running in an upward channel since July 2023 when the uptrend started. Recently, driven by Berkshire Hathaway's holdings news, the stock price broke above the upper boundary of the channel, although it did not hold, possibly indicating resistance at the upper edge of the channel, but still within the upward channel.

• Overbought: With the Relative Strength Index (RSI) > 70, it may suggest that Chubb Ltd's stock price is overbought in the short term, implying the possibility of a short-term pullback.

• Resistance and Support: If Chubb Ltd's stock price experiences a short-term pullback, the previous high point may serve as a potential resistance level, which needs to be monitored to see if it can hold.

Focus direction:

Insurance has always been Buffett's most familiar industry. He has been increasing his holdings in Chubb Ltd for three consecutive quarters, possibly indicating the Oracle of Omaha's approval of the company. However, it is necessary to observe whether Buffett will maintain his position in the future.

From a technical analysis perspective, after Buffett's holdings were announced, it may have put the stock price in a short-term overbought condition. If the stock price retraces, investors can look at the previous high points as a potential support level, to see if it can find some short-term support.

Risk disclosure: This content does not constitute a research report, is for reference only, and should not be used as a basis for any investment decisions. The information involved in this article is not a comprehensive description of the securities, markets, or developments mentioned. Although the information source is considered reliable, the accuracy or completeness of the above content is not guaranteed. In addition, no guarantee is given for any statements, opinions, or forecasts provided in this article.