Major Changes in Warren Buffett & Berkshire Hathaway Stocks: American Airlines, Delta, Kinder Morgan, Wal-Mart, BNY Mellon and More
Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of September 30, 2016. Outside of Warren Buffett being one of the richest men alive and being considered the greatest investor of modern times, there have been many key changes in the Buffett stocks over recent quarters.
The Berkshire Hathaway quarterly SEC filing for earnings showed that the total equity securities listed on the balance sheet was $100.757 billion as of September 30 (versus $102.563 billion as of June 30). The 13F filing with the SEC showed the balance as of September 30 as $128.8 billion (versus $129.7 billion as of June 30).
24/7 Wall St. and its founders have tracked the major and minor portfolio changes from Buffett’s stock holdings for about two decades now. These are tracked each quarter, and what ends up happening is that these holdings can change drastically through time. The addition of two more portfolio managers in recent years has only made the changes look even more extreme.
Investors need to keep in mind that approximately 60% of the aggregate fair value of the common equity securities is concentrated in just four companies: Wells Fargo at $22.1 billion (versus $23.7 billion in June), IBM at $12.9 billion (versus $12.3 billion in June), Coca-Cola at $16.9 billion (versus $18.1 billion in June) and American Express at $9.7 billion (versus $9.2 billion in June).
American Express Co. (NYSE: AXP) was the same 151.6 million or so shares, a position that remains perpetually static, whether shares rise or fall. This has been said before, but Buffett has owned Amex for so long it may be cheaper for him to just hold rather than pay capital gains.
Coca-Cola Co. (NYSE: KO) was the exact same stake of 400 million shares. This has been a position that also has remained static, and Buffett has defended his stake here for years.
International Business Machines Corp. (NYSE: IBM) was listed as 81.232 million shares in September, same as June and March. Still, this Big Blue stake has been raised previously. It was 81.03 million shares as of December 31, about 79.5 million shares as of the end of last June, and the end of 2014 position was 76.971 million IBM shares. Berkshire Hathaway’s 10-Q SEC filing said on IBM:
Unrealized losses at September 30, 2016 included $941 million related to our investment in IBM common stock of which $855 million had been in a continuous unrealized loss position for more than twelve months. Unrealized losses represented 7% of our cost. IBM continues to be profitable and generate significant cash flows. We currently do not intend to dispose of our IBM common stock and we expect that the fair value of this investment will recover and ultimately exceed our cost.
Wells Fargo & Co. (NYSE: WFC) was listed as 479.704 million shares in September, the same as in June and March. This was 470.29 million shares last September. As a reminder, it was documented that Buffett has filed to be allowed to increase his stake north of the 10% threshold with the SEC. He just recently confirmed that he did not sell Wells Fargo shares after the account opening scandal.
Kraft Heinz Co. (NYSE: KHC) was listed as the same 325,634,818 shares, as it was on March 31 and at the end of 2015. This stake is from the 3G Capital deal and is worth $29.1 billion. Please note that the 10-Q filing for September 30 said that the carrying value of this investment was down to $15.711 billion as it had recorded a noncash pretax holding gain of approximately $6.8 billion in 2015.
Phillips 66 (NYSE: PSX) was an increased stake yet again, rising to 80.689 million shares at the end of September. This stake was 78.782 million shares as of June 30, and it was a 75.55 million share stake in March. This stake previously had been classified as an elimination in 2015 and then was shown after Buffett got the stake classified with the SEC as confidential.
Apple Inc. (NASDAQ: AAPL) was the same 15.227 million shares as of September 30, but it has been increased in June after having been a new position back in the March quarter. The timing here worked rather well and was a stake by the new portfolio managers.