In last week’s SEC filings, investors were given a chance to see which stocks have been bought and sold by Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-A). While new stakes were seen in shares of Dish Network Corp. (NASDAQ: DISH) and Suncor Energy Inc. (NYSE: SU), there was one position sold out of entirely and there were several stocks that had seen their stakes lowered.
24/7 Wall St. recently outlined which of the Buffett stocks had the most implied upside, but in this feature we wanted to see which of the Berkshire Hathaway stocks were being lightened up and sold off. If Buffett and his new portfolio managers think of things in a forever time frame for core portfolio holdings, what does it signal to investors who might be wondering if they should own those stocks?
Gannett Co. (NYSE: GCI) already had been lowered down to 1.74 million shares in the prior reporting period, but this most recent report showed that Buffett was out entirely by the end of June 2013. Two observations could be made, one is that it was too small to matter. The second was that Buffett may have felt a conflict here since he has been buying up community newspapers handily. For whatever it is worth, shares had risen handily over the past year.
GlaxoSmithKline PLC (NYSE: GSK) was listed as a slightly smaller stake at 1.476 million shares, versus what we had as 1.51 million shares previously. The difference here is so small that we might question whether there was a reporting error in the different Berkshire Hathaway accounts.
Kraft Foods Group Inc. (NASDAQ: KRFT) was lower yet again and down to only 192,666 shares, versus 1.602 million shares in March. This remains a tiny fraction of the past holdings and is representative of a position on the way out. Buffett was not too happy with things for a while and this is one that likely will be erased entirely unless Buffett thinks he can use his stake to benefit his investment in Heinz.
Mondelez International Inc. (NASDAQ: MDLZ) was in the same boat as Kraft, and the company is the other side of the Kraft breakup as well. Buffett seems to be on his way out here, now that the stake is down to 578,000 shares as of the end of June from 7.05 million shares in March, and versus 12.84 million shares at the end of 2012. Like Kraft, this is representative of a position on the way out of the portfolio.
Moody’s Corp. (NYSE: MCO) was haphazardly called one of Buffett’s favorite stocks from a rival website, but we would point out that the only reason Buffett still has this is because it has been held a long time and there is a huge cushion on the profits in the stake. The Berkshire Hathaway stake was down to 24.92 million shares as of June 30, versus 28.4 million as of March 31. Buffett started lightening up on this controversial credit ratings agency years ago, and we think he is likely to continue lightening up ahead.
There are some other Buffett stocks that have been unloaded in prior periods that were worth a look. Again, these stakes were from prior periods.
Johnson & Johnson (NYSE: JNJ) was the same size in the portfolio on June 30 versus March 31, but this stake is down to only 327,100 shares. This is down massively from prior quarters and years earlier, and it seems as though Team Buffett may have simply forgotten to bother clearing out of J&J.
And going back even further …
Archer Daniels Midland Co. (NYSE: ADM) had been removed entirely as of the end of March 2013, despite having been a new position of 5.95 million shares worth some $163.1 million as of the end of 2012. Maybe Buffett’s portfolio managers did not want to be in a GMO food fight.
General Dynamics Corp. (NYSE: GD) also was removed entirely by the end of March 2013. Buffett’s prior stake had been some 3.877 million shares previously. The driving force here was a bit of a mystery.
Dollar General Corp. (NYSE: DG) was removed from the portfolio back in 2012, but this was one of the recent screens in the “Buffett stocks with the most upside,” since we also keep prior holdings available for the screening. This was a profitable stake, and they seemed to have sold based on appreciation, since they did not go in much stronger and harder when the new portfolio managers decided to buy into the king of dollar stores.