The latest 13-F SEC filing from Berkshire Hathaway indicated the company had sold its $2.1B holding in Oracle which was only established the previous quarter. For answers we used our text analytics platform to look back at the last two earnings call transcripts, and uncovered one hot button issue that may be the culprit.
In its 13-F SEC filing for the quarter ended December 31, Berkshire Hathaway revealed that it had sold its entire $2.1B holding in Oracle. The position was first established only one quarter ago, and while we have no specific insight into the reason for Berkshire to buy or sell Oracle stock, we looked through the lens of the Amenity Analytics text analytics platform for insights from each of the last two quarters.
We first saw warning signs on the September call, while the December earnings call was more benign. However, one emerging hot button issue may have been the culprit.
The Amenity Analytics NLP model has the ability to focus analysis on the most critical element of earnings calls: the Q&A section. One of just a handful of times per year when CEOs and CFOs of public companies have to go off-script to take questions from analysts. We applied our standard Fundamental Analysis model to analyze Tone in the Q&A section as well as our unique Deceptive Language analysis, which identifies potential problem areas that management is trying to dodge.
Berkshire may have seen something in the 9/17 earnings call to trigger the $2 billion purchase, but the NLP model flagged two warning signs from the Q&A:
Insights in the Amenity Analytics platform always trace back to the Why behind the numbers, and ultimately to the specific text highlighted by the NLP model. We found the spike in Deception Score on the 9/17 earnings call was driven by an increase in comments characterized as Evasive by our model, where questions seeking additional supporting data on the Cloud business were met with little to no detail.
The above chart showed little change in the Q&A tone and a significant decrease in the Deception Score from the September to December earnings calls. Although the headline analysis was benign, when we dove into the hot button issues of the Q&A section, the database business and competitive threats in the Cloud (Amazon) did garner additional attention compared to prior quarters. After its painful IBM experience re: Amazon, was that enough to spook Berkshire?
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This communication does not represent investment advice. Transcript text provided by S&P Global Market Intelligence.
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