This is the week that we will get to see 13-D and 13-F filings from investment firms, and one notable one is always that of Berkshire Hathaway Inc. (NYSE: BRK-A). Investors love Warren Buffett and they often copy his moves. It is presumed that General Electric Co. (NYSE: GE) and DaVita Healthcare Partners Inc. (NYSE: DVA) will be larger holdings. There might even be more International Business machine Corp. (NYSE: IBM) and Suncor Energy Inc. (NYSE: SU) as well. Wells Fargo & Co. (NYSE: WFC) seems a shoe-in to be a larger equity stake yet again.
Before getting too excited or too demanding about what to expect, be advised that this cut-off date shown this week will be for holdings as of September 30, 2013. Warren Buffett and his team at Berkshire Hathaway Inc. (NYSE: BRK-B) are not obligated at all to show any purchase or sale transactions during October or November.
Warren Buffett sometimes makes many purchases and many sales of companies in a quarter. Sometimes these are just adjustments higher or lower, and sometimes they are new positions or outright eliminations.
DaVita Healthcare Partners Inc. (NYSE: DVA) is the leader in kidney dialysis centers. Buffett likes steady businesses with predictable cash flows and limited competitions. Owning a stake in the leading dialysis specialty fits that bill. We would also point out that Buffett did reach the equivalent of a stand-still agreement, whereby Berkshire Hathaway Inc. is not to take more than a 25% stake of the company and the last stake was around 17%. The recent pullback suggests that Buffett’s portfolio managers would have bought, and the SEC filings confirmed that even if it was after the cut-off date of September 30.
General Electric Co. (NYSE: GE) is one that is almost certainly a larger stake than the piddly 588,900 shares that Berkshire Hathaway has disclosed for some time. An SEC filing in October referred back to the warrants from the old preferred stock bailout from during the meltdown. This filing said, “On October 16, 2013, Berkshire Hathaway Inc. exercised in full their warrants to purchase shares of GE common stock. GE will deliver 10.7 million shares to Berkshire Hathaway on October 17, 2013.” Notice that October date, so the shares cannot be expected to show up in the coming filing this week.
International Business Machines Corp. (NYSE: IBM) is a company that Buffett praised before, and he even signaled that he had bought more despite the filing last quarter showing that the IBM stake was static. Presumably, if Buffett signaled he was a buyer then we would expect to see it in the numbers. The only wild card here is that the big drop in shares came after earnings in October. Even if Mr. Buffett does own more shares, he might be losing money in those too. Whether Buffett bought more or not, he needs to consider the gutting that has taken place here just to meet that $20 in earnings per share by 2015.
Suncor Energy Inc. (NYSE: SU) was a new position listed as 17,769,457 shares, worth more than $524 million as of June 30. This stake as of today would be worth almost $620 million. The reason we think this stake will be larger is in part because we flagged it as such at the last report, showing that there may be a hidden message. Warren Buffett and Bill Gates looked at buying into the Canadian Oil Sands before, but did not do much. This was a signal to us that Buffett thinks the Keystone XL pipeline could get built, and that would likely put pressure on the huge increase that BNSF has seen from hauling oil around on rails.
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Wells Fargo & Co. (NYSE: WFC) is a banking giant that Team Buffett owns a huge stake in and they keep owning more and more. It seems as though Buffett gets his dividends reinvested as shares and/or that he writes put options hoping that he gets put the stock at lower prices. This stake was listed as roughly 463.1 million shares at the last report and Buffett has consistently added and added to the position here. Why should this last quarter be any different?