Investing

Significant Changes in Buffett and Berkshire Hathaway Holdings

Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of September 30, 2014. Warren Buffett’s portfolio has recently undergone some radical changes on the surface, some of which are good and some of which look mixed. Also, some of the substantial change has taken place since the end of the last reporting period and we have made an effort to capture those changes.

Warren Buffett and his team of portfolio managers listed some $107.785 billion in the formal filing, but the full list would be higher considering other private and/or international stakes. The most recent earnings report for September 30 had indicated that equity securities held were $116.432 billion, and that did not include the $11.83 billion Heinz investment.

We also knew ahead of time and going into this report that approximately 58% of the total value of the Berkshire Hathaway Inc. (NYSE: BRK-B) equity holdings was still concentrated in just four stocks – Wells Fargo & Company (NYSE: WFC) at $25.1 billion; International Business Machines Corporation (NYSE: IBM) at $13.4 billion; and The Coca-Cola Company (NYSE: KO) at $17.1 billion; and American Express Company (NYSE: AXP) at $13.3 billion.

That was the same percentage in June, but the concentration was just 56% in the March holdings.

One issue to consider as well is that some of the investments in key companies are no longer held in public stocks. Berkshire Hathaway invested $3 billion in 2009 into preferred shares of Dow Chemical Co. (NYSE: DOW), and it invested $5 billion for Preferred shares and warrants in Bank of America Corp. (NYSE: BAC) in 2011.

A newer stake in 2014 was Verizon Communications Inc. (NYSE: VZ), but that remained static. Express Scripts Holding Co. (NASDAQ: ESRX) was a new stake in the portfolio, while Deere & Co. (NYSE: DE) was eliminated from the portfolio.

The full list of Warren Buffett and Berkshire Hathaway stock holdings as of September 30, 2014, is as follows:

American Express Co. (NYSE: AXP) was again roughly that same number of more than 151 million shares (worth close to $13.3 billion). This number has been static even if the share price has backed off its high.

Bank of New York Mellon Corp. (NYSE: BK) was SLIGHTLY LOWER at 23.377 million shares, after having been static at 24.6 million shares.

Charter Communications Inc. (NASDAQ: CHTR) was a MUCH HIGHER STAKE at 4.95 million shares, after having previously been a new position of some 2.309 million shares.

Chicago Bridge & Iron Co. (NYSE: CBI) was the same stake at 10.701 million shares after having been raised in 2014 and in 2013.

Coca-Cola Co. (NYSE: KO) was yet again the same stake around 400 million shares. This was listed as being worth $17.1 billion at the end of September as one of its top four positions.

ConocoPhillips (NYSE: COP) was LOWER AGAIN at 471,994 shares. This position has been lowered more than once — down to 1,355,228 shares after having been 11.079 million shares in March, and lower than the 13.529 million shares at the end of 2013, and lower than the 24.1 million shares a year ago.

Costco Wholesale Corp. (NASDAQ: COST) was the same stake at 4,333,363 shares.

DaVita Inc. (NYSE: DVA) was listed as 37.621 million shares at the end of September, however insider purchase transactions from Ted Weschler as recently as November 7 showed that there were 38.441 million shares now held. DaVita had been raised over and over in prior quarters. As a reminder, Buffett has entered into a standstill agreement not to buy more than 25% of the company after already having increased its in prior quarters.

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DirecTV (NASDAQ: DTV) was raised to 30 million shares, but we noted last quarter that the stake had been lowered to 23.467 million shares after having been 34.514 million shares and ultimately as high as 37.275 million shares in 2013.

Express Scripts Holding Co. (NASDAQ: ESRX) was a NEW POSITION of 449,489 shares, but this was worth a mere $31.74 million as of September 30. It may be too small to really count.

Exxon Mobil Corp. (NYSE: XOM) was the same stake of 41.129 million shares, but this had been raised previously and was made a new stake in 2013.

General Electric Corp. (NYSE: GE) was the same stake of 10.585 million shares, but this was raised in the prior quarter and had been telegraphed before because of the warrants.

General Motors Co. (NYSE: GM) was a LARGER STAKE at 40 million shares, up from the last quarter at 32.96 million, and up from 30 million shares previously.

Goldman Sachs Group Inc. (NYSE: GS) was the same stake of 12.631 million shares.

Graham Holdings Co. (NYSE: GHC) is the remains of Washington Post and was the same stake at 107,575 shares — this is down from prior reports of 1.727 million shares, but the prior sale had been telegraphed.

International Business Machines Corp. (NYSE: IBM) was SLIGHTLY HIGHER at 70.478 million shares and was listed as being worth $13.4 billion with its last earnings report. Despite the earnings warning from IBM, Buffett had already telegraphed ahead of time that the IBM stake was growing. Last quarter it was 70.173 million shares, up from 68.355 million shares in March and up from first being added. The IBM stake was worth $13.4 billion at the end of September, but the mid-November value of IBM was down almost 14% from the end of September.

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Johnson & Johnson (NYSE: JNJ) was the same tiny stake of only 327,100 shares, but this much lower than years past.

Kraft Foods Group Inc. (NASDAQ: KRFT) was the same small stake of only 192,666 shares, but this used to be much higher.

Lee Enterprises Inc. (NYSE: LEE) was the same size of only 88,863 shares, but a deal in 2013 may have given more leverage on the debt size.

Liberty Media Corp. (NASDAQ: LMCA) was the same stake at 4 million shares versus 5.3 million shares two quarters ago, but the team has a new 8 million shares of the Class C structure.

Liberty Global PLC (NASDAQ: LBTYA) appears to be a LARGER STAKE AGAIN at 17.747 million shares versus 17.213 million shares one quarter ago and versus 14.693 million in March.

M&T Bank Corp. (NYSE: MTB) was the same position at 5.38 million shares — same as always.

MasterCard Inc. (NYSE: MA) was a LARGER STAKE at 4,715,400 shares versus 4,050,000 shares as before.

Media General Inc. (NYSE: MEG) was the same position of 4.64 million shares.

Mondelez International Inc. (NASDAQ: MDLZ) is the same position at 578,000 shares, but this remains far lower than in the past.

Moody’s Corp. (NYSE: MCO) was the same position of 24.669 million shares, but this is lower than before.

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National Oilwell Varco Inc. (NYSE: NOV) was a LOWER STAKE at 6.382 million shares, down from 7.302 million shares in June. Please note — this change may be due to the next position of Now Inc. (NYSE: DNOW) below. This NOV stake had been listed as 8.88 million shares previously and had been raised in 2013.

NOW Inc. (NYSE: DNOW) was the same stake of 1.825 million shares. See NOV above.

Phillips 66 (NYSE: PSX) is SMALLER AGAIN at 6,202,400 shares versus 6.495 million shares in June and versus 9.741 million shares in March. This used to be above 27 million shares before that.

Precision Castparts Corp. (NYSE: PCP) was the same position at roughly 2.08 million shares.

Procter & Gamble Co. (NYSE: PG) has changed since the September report. This was the same position at 52.8 million shares in the formal report, but that had been lowered in 2012 from a prior peak of 96.3 million shares. P&G just recently reached an agreement with Buffett to exchange his P&G shares worth about $4.7 billion for a recapitalized Duracell Co., plus the NewCo will get close to $1.8 billion in capital.

Sanofi (NYSE: SNY) was the same position at 3.905 million shares.

Suncor Energy Inc. (NYSE: SU) was a LARGER STAKE again at 18.477 million shares, up from 16.458 million shares last report and up from 13 million shares in March.

Torchmark Corp. (NYSE: TMK) was the same stake if you account for a 3-for-2 stock split in July. This is now listed 6.35 million versus roughly 4.2 million shares before the split.

U.S. Bancorp (NYSE: USB) was left the same at 80.09 million shares. Be advised that this stake had been rising and rising in prior reports.

USG Corp. (NYSE: USG) was the same stake at just over 39 million shares, but this had been raised in prior reports at 34.89 million shares and previously as 17.072 million shares before that.

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United Parcel Service Inc. (NYSE: UPS) was the same paltry position at 59,400 shares, but this is way down from 2012.

VeriSign Inc. (NASDAQ: VRSN) was the same stake at 12.985 million shares, but this one had previously grown — versus 11.685 million the prior quarter, and up from 10.96 million shares before that.

Verisk Analytics Inc. (NASDAQ: VRSK) was the same position at 1,563,434 shares, but that is lower than prior quarters before.

Verizon Communications Inc. (NYSE: VZ) was the same stake at 15 million shares, but that had been raised last quarter and was a new position in March of 11,022,743 shares.

Viacom Inc. (NASDAQ: VIA) was SLIGHTLY HIGHER at roughly 7.7 million shares versus 7.6 million last quarter, and the stake in Viacom had been raised in 2013.

Visa Inc. (NYSE: V) was a LARGER STAKE at 2,146,290 versus a prior stake of 1,799,749 shares last quarter, and up from 1.555 million shares in March.

WABCO Holdings Inc. (NYSE: WBC) is the same position at just over 4.076 million shares.

Wal-Mart Stores Inc. (NYSE: WMT) was a LARGER STAKE at 60.385 million shares. Last quarter it was a larger stake yet again at almost 58.8 million shares, up from 58.05 million shares previously, and up from 49.48 million shares before that.

Wells Fargo & Co. (NYSE: WFC) was the same stake again at 463.458 million shares — listed as a $25.1 billion value with the last Berkshire Hathaway earnings report. This is another quarter that Wells Fargo’s share count remained the same after years of the stake growing.

Deere & Co. (NYSE: DE) has BEEN ELIMINATED after it had been the same last quarter at roughly 4 million shares.

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