24/7 Wall St.

Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of December 31, 2018. Most investors should look at these public equity holdings as the top holdings at the start of 2019. After all, Warren Buffett and his portfolio managers tend to buy stocks on behalf of Berkshire Hathaway’s shareholders and hold the positions for years.

Buffett still helps to run Berkshire Hathaway each day. He is one of the world’s richest people, and he is considered by many to be one of the greatest investors and financiers of the modern era. That obviously would imply that maybe he knows a thing or two about stock picking for the long haul. Buffett is also considered to be the “Moby-Dick” when it comes to the so-called whale-watchers who chase stock picks and strategies of the best investors.

24/7 Wall St. has tracked many of the investment strategies of America’s top investment managers, hedge fund managers and independent investors for years. Buffett and Berkshire Hathaway top that list over time. When you roll up Berkshire Hathaway, Buffett and his team, you end up with one of the world’s largest public companies that is a blend of a conglomerate with industrial and services operations, a mutual fund, private equity (or a hedge fund) and an insurance outfit all rolled into one giant entity.

Before getting into the valuations here, it is important to consider that the fourth quarter of 2018, and December in particular, was a very bad time for equity investors. Buffett likely will have not been scared like the financial media scared the public, but Berkshire Hathaway’s headline number of stock holdings was $207.3 billion at the end of September 2018. Approximately 69% of that total fair value at that time was concentrated in just five companies. The actual 13F filing for September 30, 2018, showed Berkshire Hathaway’s holdings were even a larger sum of about $221 billion in equities, and the “new” 13F filing for December 31, 2018, showed the full equity value totaling $183 billion.

Equally as important as the stock market drop that was seen through the end of December is that the Dow Jones industrial average on last look was already up over 2,500 points from the lows of the market at the start of January. Many media headlines around this are going to be about how many billions of dollars the Buffett picks (particularly around the bank stocks added in the third quarter) made. The market gains since the end of 2018 will mean much of the losses already have been recovered — particularly if Buffett bought even more of them toward the end of the year.

24/7 Wall St. has tracked the largest equity positions held by Buffett and made notes around other stake changes in some of the dozens of other equities owned by Berkshire Hathaway. These represent the top Buffett stocks for 2019 and beyond as of the current time.

American Express Co. (NYSE: AXP) was the same 151.6 million share stake it has been for years.

Apple Inc. (NASDAQ: AAPL) was listed as 249.59 million shares in the 13F filing, down marginally from the 252.47 million shares in September (barring any confidential information, which was since “confirmed” of sorts).

Bank of America Corp. (NYSE: BAC) was 896.17 million shares at the end of December, up by roughly 19 million shares.

Coca-Cola Co. (NYSE: KO) was the same 400 million shares, another stake that has not changed in many years.

Wells Fargo & Co. (NYSE: WFC) was listed as 426.77 million shares, down from the September 2018 stake of 442.36 million shares (and down from 452.0 million in June and from 456.5 million prior to that).

Kraft Heinz Co. (NASDAQ: KHC) is also a continued massive holding that is outside of the normal book-keeping in the largest public equity holdings. Berkshire Hathaway owned 325.63 million shares at the end of December.

Note that Buffett announced in the recent quarters that Berkshire Hathaway would be trimming some stakes that would put the conglomerate above the 10% ownership threshold to ease regulatory filing duties and the like that are required by the U.S. Securities and Exchange Commission. Some of the Buffett portfolio changes have been gradual, while others have been much more rapid.

Back in 2018, Berkshire Hathaway issued a press release confirming that “some 10% stakes” had been sold and others had been increased in areas around the companies to avoid the SEC’s 10% threshold for filings and restrictions. That release said:

These buy and sell decisions did not reflect our investment management’s views as to the relative attractiveness of the bought and sold securities but were rather a response to the 10% limitation. Similar situations may occur in future quarterly reports as Berkshire continues to have 9% plus holdings in a number of equity securities that are active repurchasers of their shares.

There may have been other slight changes made in the Berkshire Hathaway holdings, but the main changes in positions and the new position additions and deletions as of December 31, 2018, have been shown below.

American Airlines Group Inc. (NASDAQ: AAL) was the same stake of 43.7 million shares, but that was down from 44.7 million shares earlier in 2018.

Bank of New York Mellon Corp. (NYSE: BK) increased to 80.94 million shares at the end of December, up from 77.85 million shares at the end of September and from 64.8 million shares in June.

DaVita Inc. (NYSE: DVA) was a stake of 38.565 million shares, same as in September.

Delta Air Lines Inc. (NYSE: DAL) was the same stake of 65.54 million shares as in September, but that had been up from 63.67 million shares in June and even higher than it had been in March.

General Motors Co. (NYSE: GM) was a larger stake of 72.27 million shares in December, up from 52.46 million shares in September and from 51.39 million shares in June.

Goldman Sachs Group Inc. (NYSE: GS) was the same 18.35 million shares as it was at the end of September 2018 but handily above the levels seen earlier in 2018.

JPMorgan Chase & Co. (NYSE: JPM) was listed as a new stake in September, but at the end of December it was 50.12 million shares, versus a September stake of 35.66 million shares.

Oracle Corp. (NYSE: ORCL) had been a new stake of 41.4 million shares as of the end of September, but the December filing does not include Oracle in the 13 filing at all.

Phillips 66 (NYSE: PSX) was down to 11.9 million shares at the end of 2018, lower than the 15.43 million shares in September and far lower than the 34.7 million shares when Buffett decided to get out from under the 10% SEC holding threshold.

PNC Financial Services Group Inc. (NYSE: PNC) increased to 8.26 million shares in December from 6.09 million in September.

RedHat Inc. (NYSE: RHT) was listed as a new stake of 4.18 million shares at the end of 2018, but this may be an arbitrage play on the IBM merger spread. Buffett and his team have made similar merger-arb transactions in the past.

Southwest Airlines Co. (NYSE: LUV) was 54.85 million shares at the end of 2018, down from 56.05 million shares in September and 56.54 million shares at the end of June.

StoneCo Ltd. (NASDAQ: STNE), a fintech company, is a new stake of about 14.17 million shares as of the end of 2018.

Suncor Energy Inc. (NYSE: SU) was a new stake of 10.76 million shares.

Travelers Companies Inc. (NYSE: TRV) was increased to 5.96 million shares at the end of December, after it had been a new stake of 3.54 million shares at the end of September.

United Continental Holdings Inc. (NYSE: UAL) was 21.94 million shares, down from the 25.98 million shares in September, and down from 26.684 million shares in June and 27.7 million shares in March.

U.S. Bancorp (NYSE: USB) was 129.31 million shares at the end of December, up from 124.92 million shares in September and 100.69 million shares at the end of June.

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