Here at Profit Takeover, I regularly tell you when I spy impact money.
Why? Well, it’s all part of two-factor authentication trading. And it’s one of the best ways to use Wall Street’s tricks against them.
Here’s how it works:
Retail traders interested in a stock? Check. There’s your first factor, authenticated.
Impact money interested? Check. There’s your second.
When both parties are dumping money into a stock, well, that’s when you know a profit is on its way.
And that’s exactly what just happened to one stock in our Profit Takeover portfolio.
In the first quarter of 2021, Warren Buffett bought 12 million shares of one stock that we already have our money in.
There we have it – this stock has been two-factor authenticated… but we already have a position open in it.
So, how do we capitalize on this impact money move?
Yesterday, Warren Buffett’s massive holding company, Berkshire Hathaway, filed its 13F for Q1 2021.
Due to SEC regulations, any “institutional investment managers” with control over $100 million in assets must report their holdings quarterly. And that’s exactly what a 13F is.
According to the report, Buffett reduced Berkshire Hathaway Inc. Class B’s (NYSE:BRK.B) stake significantly in drug stocks like Bristol-Myers Squibb Co. (NYSE:BMY) and AbbVie Inc. (NYSE:ABBV).
He sold off a bulk of energy shares in Chevron Corp. (NYSE:CVX) and completely exited the Canadian Sucor Energy Inc. (NYSE:SU).
Buffett even shed nearly all of Wells Fargo & Co. (NYSE:WFC), a financial company he’s held since the late ’80s that was once a favorite stock.
And that’s only a sampling. Long story short, Buffett did a lot of selling in 2021’s first quarter. But he also did a little bit of buying…
He added 23,900 shares in home goods retailer Restoration Hardware Holdings Inc. (NYSE:RH)…
Bought up millions more shares of Marsh & McLennan Companies Inc. (NYSE:MMC) and Kroger Co. (NYSE:KR)…
And opened a new position in professional services company Aon PLC (NYSE:AON).
But here at Profit Takeover,we’re most interested in a particular 8.3% stake increase in the second-largest wireless carrier in the United States: Verizon Communications Inc. (NYSE:VZ).
BRK.B first opened a position in VZ in the fourth quarter of 2020, buying up 146.7 million shares for a whopping $8.62 billion, making up 3.2% of the holding company’s portfolio.
Since then, the company has added 12 million new shares, upping VZ’s weight by more than 8% with a $9.2 billion stake.
And that 10-digit number is exactly what I like to call impact money.
Now, while I don’t always agree with Warren Buffett on things, it’s hard to argue with his logic here. VZ is an attractive stock – good cash flow, great dividend… and it’s grossly undervalued.
Today, VZ has fallen a little over 2% in reaction to AT&T Inc.’s (NYSE:T) newest merger deal. That brings the stock to about $57 per share as I type. But I think this telecom is worth about $65-$70…
And Buffett’s buy could take it there.
The volatility in VZ is still relatively inexpensive. So, today’s the perfect day to add to our VZ position.
Let’s buy the VZ September 17, 2021 $60 calls for $0.95, good-’til-canceled through Friday, May 21.
This is a steal. Our first entry in the September $60 calls was for $1.32. And we’re still targeting an asymmetric gain on that position…
But now, with a new position for even less, that gain is going to be even bigger.
You can track our newest position starting tomorrow right here in the Profit Takeover portfolio.
May 18 2021