Bram Berkowitz, The Motley Fool

Mon, May 19, 2025, 5:28 AM5 min read

• In early 2025, Warren Buffett's Berkshire Hathaway exited its positions in Citigroup and Nu Holdings.

• Berkshire didn't launch any new positions in the quarter.

• However, the large conglomerate upped its stake significantly in one company that has served shareholders well since going public in 1995.

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One of the most anticipated events of each quarter is the unveiling of Berkshire Hathaway's 13F filing with the Securities and Exchange Commission (SEC). The document details the holdings in Berkshire's massive equities portfolio at the end of each quarter, effectively telling the market what stocks Warren Buffett and his team bought and sold over a three-month period.

With Buffett set to step down at the end of the year, this frequent glimpse into one of the brightest investing minds the world may ever see is now coming to an end. In the first quarter of 2025, Buffett sold his stake in two bank stocks, Citigroup (NYSE: C) and Nu Holdings (NYSE: NU), and piled into a stock up over 34,770% since its initial public offering (IPO).

Buffett and his team have long been experts in the banking sector. Over the 21st century, the company at one point or another has pretty much owned every major U.S.-based bank on Wall Street. That's why it was a big deal when Buffett acquired a stake in Citigroup in 2022 because he hadn't owned the stock since 2001, according to SEC filings. Citigroup has wildly underperformed its peers since the Great Recession and trades at a significant discount to tangible book value, making it a good candidate for Buffett's value playbook.

It looks like Buffett has done OK on the position. Berkshire bought the bulk of its shares in early 2022 at an average share price of $53.40. The average price of Citigroup in the fourth quarter of 2024 and first quarter of this year, when Berkshire sold nearly all of its shares, was $71.68, although we'll never know the exact price the company sold at.

Given that Citigroup's transformation under CEO Jane Fraser, who took over in 2021, remains on track, and that the large U.S. banks will see tailwinds from deregulation, I think Buffett and Berkshire are selling too early. But Buffett has clearly soured on the banking sector in recent years, ditching a number of his bank holdings and downsizing on many of his existing bank stocks. He may think a recession is coming, and banks, which are cyclical, tend to struggle in a recession.

Berkshire also exited its stake in the Brazilian digital bank Nu Holdings. Berkshire got shares through the company's IPO and initially invested $500 million at a $30 billion valuation. Berkshire would eventually double that position and sold its stake in 2024's Q4 and Q1 of the year, during which time Nu had an average market cap of over $60 billion.