Warren Buffett recently bought and sold these stocks. Here’s why I disagree

Each quarter, Berkshire HathawayYou are responsible for publishing a document (known as a 13F filing) showing your current investments. Warren Buffett may be in his 90s, but he is still involved in decisions related to what the company buys and sells. The Q3 lineup has just come out, with some interesting changes worth noting.

Clean the kitchen

Let’s start with the new stock addition. Notable was the assumed purchase of $557m Domino’s Pizza (NYSE:DPZ), equivalent to approximately 1.28m shares.

I understand why this might tick a lot of boxes for Buffett and his team at Berkshire. Buffett is known for favoring consumer staples businesses with a strong long-term track record. Domino’s was founded in 1960 by two brothers in Michigan. It has expanded over the decades, but it is still essentially tied to making a simple product (pizza) well.

Buffett also likes value stocks. While I wouldn’t say Domino’s is undervalued at the moment, it’s lagging behind in the broader market performance. Over the past year, the stock is up 15%, but not even close to its 52-week high. This compares to a 30% profit from S&P 500 that has been set to new heights every year.

However, I am not interested in tracking and buying now. I don’t see anything interesting going on in the company. Q3 results showed revenue growth of 5.1% compared to the same period last year, while revenue decreased by 0.5%. This doesn’t strike me as a forward-thinking company, or one that sees an influx of customer needs.

Not good

On the flipside, Berkshire Hathaway reduced its holdings Divine Beauty (NASDAQ:ULTA) almost entirely. This comes after buying more than $260m worth of stock just last quarter.

The stock is down 10% over the past year, but by my rough calculations Buffett hasn’t lost money this time based on when he bought and sold.

It’s not uncommon for a company to trade in and out of holdings for such a short period of time, so maybe there’s something we’re not noticing right now. However, based on the information I have, I am not in favor of the move.

It’s true that Ulta has been under pressure lately with stiff competition in the beauty space. However, the latest Q2 results showed many positive signs. Q3 results will be out in a few weeks so I’m surprised Berkshire and Buffett didn’t wait for this update before making an informed decision.

Certainly as a long-term investor, I would wait for more information before making this call. Granted, I don’t own the stock, so I can’t blame Buffett since he’s the one with skin in the game.