Investing.com -- Warren Buffett's Berkshire Hathaway (NYSE:BRKa) shaked up its portfolio holdings during the second quarter, with a new stake in Ulta and increased investments in Chubb as well as Sirius XM among the highlights.
Berkshire Hathaway owned 690,106 shares in Ulta Beauty (NASDAQ:ULTA) as of Jun. 30, according to a regulatory 13-F filing on Wednesday, sending shares of the company up more than 12% in afterhours trading following the news.
Ulta wasn't the only new holdings as Heico Corporation (NYSE:HEI) was also snapped up, with Berkshire buying 1.04M shares of the aerospace and electronics company.
The investment conglomerate also increased its investment in Sirius XM Holding Inc (NASDAQ:SIRI) and Chubb Ltd (NYSE:CB) to 132.9M shares and 27M shares, respectively.
The additions come as positions in Capital One Financial Corporation (NYSE:COF) and Floor & Decor Holdings Inc (NYSE:FND) were trimmed by about 21% and 17% respectively, during the period.
In a note to clients Thursday, Oppenheimer analysts, focusing on the Ulta Beauty stake, told investors in a note that they view the move as a "vote of confidence for the company's longer-term prospects" and a "further validation of ULTA's significantly discounted valuation."
"With shares now trading back towards the high $360s and the potential for a miss and guide-down with ULTA's Q2 report on 8/29, we would still be positioned to take advantage of dips from here," said Oppenheimer.
Despite the recent share price increase (before Thursday's surge), the analysts believed Ulta remained in "value territory," trading at a significant discount to historical averages based on their Street-low FY24 EPS forecast of $24.25.
While Oppenheimer acknowledges a potentially promotional backdrop and cautious nearer-term outlook, the firm believes Ulta's fortunes could improve in FY25 and beyond as the company laps competitive pressures and executes on its strategic initiatives.
"We continue to play for a potentially improved comp outlook in FY25 and beyond as ULTA laps competitive incursions on its store base from KSS/Sephora and management efforts take hold," they add.
Despite the positives, Oppenheimer warns that the investment by Buffett has created a more complex landscape for short-term traders.