Warren Buffett & Berkshire Hathaway Make Key Changes to 2019 Stock Picks
Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of March 31, 2019. Warren Buffett still runs Berkshire Hathaway and, as he is one of the richest men alive, he is considered to be one of the greatest investors of the modern era. Investors automatically assume he knows quite a bit more than a thing or two about stock picking and investing. Buffett is also considered to be “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 the changes among Buffett’s investment picks and other top investment managers, hedge funds and independent investors for years now. Berkshire Hathaway would absolutely be at the top that whale-watcher’s list.
Some portfolio changes are made gradually, while other changes are made rapidly. And now many of the new investment selections are made by portfolio managers Todd Combs and Ted Weschler as they are free to manage billions of dollars worth of capital without much oversight by Mr. Buffett nor by Charlie Munger. Just don’t count Warren Buffett out as being involved — he eats, breathes, and lives for discovering new large financial opportunities and businesses. Some of those opportunities are seen in his public equity holdings within the Berkshire Hathaway empire.
We have focused on only the major holdings of Berkshire and the positions which actually changed from the prior quarters to keep the list of changes relative.
The first two positions which have to be considered here are Berkshire Hathaway’s $10 billion committed-but-still-pending investment in Occidental Petroleum Corp. (NYSE: OXY). The oil giant is now set to win the Anadarko buyout over rival Chevron, but the investment will not be made until the acquisition actually closes. Buffett also released the whopper of news that “one of his portfolio managers” finally bought shares of Amazon.com Inc. (NASDAQ: AMZN) and that the upcoming 13F filing for the first quarter of 2019 would reflect that. The actual size of the holding may grow or may just be a short-term investment for the conglomerate and its managers.
Buffett’s equity portfolio recovered handily with over $15 billion in related gains in the first quarter of 2019 after a late-2018 panic. It was also seen that Berkshire Hathaway’s share buybacks were less than aggressive despite the buyback criteria being dwindled down to whenever Team Buffett & Munger decide to buy back stock. The full SEC filing for the March 31, 2019 holdings showed almost $199.5 billion (versus more than $183 billion as of December 31, 2018) in direct equity holdings, not including convertibles and other related holdings.
These are Buffett’s top stock holdings and positions worth noting during the first quarter of 2019. We have also included what the percentage stake held by Berkshire Hathaway was at the end of 2018, but that is too soon to update for the end of the first quarter.
The stake in Amazon.com Inc. (NASDAQ: AMZN) was 483,300 shares. Again this was a known addition from one of Buffett’s portfolio managers but the actual size was not known. The combined value at the end of the first quarter was shown to be just over $860 million.
American Express Co. (NYSE: AXP) was the same 151.6 million shares as it has been for years. Berkshire Hathaway was the largest AmEx holder of all, with a better than an 18.1% stake at the end of 2018.
Apple Inc. (NASDAQ: AAPL) was again listed as 249.59 million shares in the 13F filing, which was the same as the prior quarter but down marginally from the 252.47 million shares in September. While Buffett had been considered a seller, the man himself explained that one of the portfolio managers had sold Apple shares to make an unrelated purchase and that Buffett himself has sold no Apple shares. That also represented close to a 5.4% stake at the end of 2018.
Bank of America Corp. (NYSE: BAC) was the same 896.17 million shares at the end of March as it was at the end of 2018 but it had been raised in the fourth quarter. Berkshire Hathaway was listed as holding a 9.4% stake and the largest BofA stockholder at the end of 2018.
Coca-Cola Co. (NYSE: KO) was the same 400 million shares, another stake that has not changed in many years. Berkshire Hathaway was listed as the largest holder of Coca-Cola at the end of 2018 with almost a 9.4% stake.
Wells Fargo & Co. (NYSE: WFC) was a stake of 409.8 million shares, down from the 426.77 million shares at the end of 2018 and down from the September 2018 stake of 442.36 million shares. Despite having trimmed the exposure to stay under the 10% SEC threshold, Berkshire Hathaway’s stake in Wells Fargo was 9.5% at the end of 2018 and was the largest holder by more than 2 full percentage points.
Kraft Heinz Co. (NASDAQ: KHC) has been a continued disappointment that Buffett has admitted he got it wrong. Unfortunately, even without Kraft Heinz changing from 325.63 million shares counted (worth $10.6 billion at the end of the first quarter), this is the type of position and type of company that Buffett might make the same mistake in over and over.
Berkshire Hathaway confirmed in 2018 that some “10% stakes” had been sold and others had been increased in other equity securities around the SEC’s 10% ownership threshold for filings and restrictions. There may have been other slight changes made in the Berkshire holdings, but the main changes and positions worth noting have been shown below.