War­ren Buf­fett adds air­lines, Visa, BNY Mel­lon, cuts Wal­mart stake

Financial Mirror (Cyprus) - - FRONT PAGE -

Berk­shire Hath­away Inc. (NYSE: BRK-A) has re­leased its pub­lic eq­uity hold­ings as of Septem­ber 30. 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 bln as of Septem­ber 30 (ver­sus $102.563 bln as of June 30). The 13F fil­ing with the SEC showed the bal­ance as of Septem­ber 30 as be­ing $128.8 bln (ver­sus $129.7 bln 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. 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 over time.

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 & Co. (NYSE: WFC) at $22.1 bln (ver­sus $23.7 bln in June); In­ter­na­tional Busi­ness Ma­chines Corp. (NYSE: IBM) at $12.9 bln (ver­sus $12.3 bln in June); The Coca-Cola Com­pany at $16.9 bln (ver­sus $18.1 bln in June); and Amer­i­can Ex­press Co. (NYSE: AXP) at $9.7 bln (ver­sus $9.2 bln in June).

Amer­i­can Ex­press was the same 151.6+ mln shares, a po­si­tion which 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 was the ex­act same stake of 400 mln shares. This has been a po­si­tion which has also re­mained static for years, and Buf­fett has de­fended his stake here for years.

IBM was listed as the same 81.232 mln shares in Septem­ber, same as June and March. Still, this Big Blue stake has been raised pre­vi­ously. It was 81.03 mln shares as of De­cem­ber 31, about 79.5 mln shares as of the end of last June, and the end of 2014 po­si­tion was 76.971 mln IBM shares. Berk­shire Hath­away’s 10-Q SEC fil­ing said on IBM: “Un­re­alised losses at Septem­ber 30, 2016 in­cluded $941 mln re­lated to our investment in IBM com­mon stock of which $855 mln had been in a con­tin­u­ous un­re­al­ized loss po­si­tion for more than twelve months. Un­re­alised 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. was listed as the same 479.704 mln shares in Septem­ber — same as in June and March. This was 470.29 mln 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. It was just re­cently con­firmed by Buf­fett that he did not sell Wells Fargo shares after the ac­count open­ing scan­dal.

Kraft Heinz Co. (NYSE: KHC) was listed as 325,634,818 shares, the same stake it was on March 31 and at the end of 2015. This stake is from the 3G Cap­i­tal deal and is worth $29.1 bln. Note that the 10-Q fil­ing for Septem­ber 30 said that the car­ry­ing value of this investment was down to $15.711 bln as it had recorded a non-cash pre-tax hold­ing gain of $6.8 bln in 2015.

Phillips 66 (NYSE: PSX) was an in­creased stake yet again, ris­ing to 80.689 mln shares at the end of Septem­ber. This stake was 78.782 mln shares as of June 30 and it was a 75.55 mln 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 mln 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.

War­ren Buf­fett was also shown to be a new in­vestor in the ma­jor air­lines. Amer­i­can Air­lines Group Inc. (NASDAQ: AAL) was a new stake, and rather un­usual con­sid­er­ing that Buf­fett hates air­lines (ex­cept NetJets of course). Still, this new stake was 21.77 mln shares and was worth al­most $800 mln. United Con­ti­nen­tal Hold­ings (NYSE:UAL) was also listed as a new stake at 4.533 mln shares worth about $238 mln. Delta Air Lines Inc. (NYSE: DAL) was listed as a new stake of 6.333 mln shares, worth some $249.3 mln at the end of Septem­ber. CNBC’s Becky Quick also said that South­west Air­lines (NYSE: LUV) was also a stake that was taken.

Other key hold­ings were shown as fol­lows in the Berk­shire Hath­away quar­terly (13FHR) fil­ing:

Ax­alta Coat­ing Sys­tems Ltd. (NYSE: AXTA) was the same stake of 23.324 mln shares, after hav­ing been listed as a new po­si­tion of 20 mln shares.

Bank of New York Mel­lon Corp. (NYSE: BK) was a larger stake again at 21.136 mln shares as of Septem­ber 30. This was pre­vi­ously shown as a 20.827 mln shares, up from a prior 20.112 mln. That was ver­sus 24.6 mln shares in the past.

Char­ter Com­mu­ni­ca­tions Inc. (NASDAQ: CHTR) was 9.443 mln shares and this po­si­tion has been fluc­tu­at­ing.

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

DaVita Inc. (NYSE: DVA) was the same 38.565 mln shares, but this had been on an up­ward trend prior to Buf­fett en­ter­ing into a stand­still agree­ment not to buy more than 25% of the com­pany.

Deere & Co. (NYSE: DE) was a slightly smaller stake at 21.085 mln shares as of Septem­ber 30. The prior stake was also smaller at 21.959 mln shares — down from 23.28 mln shares.

Gen­eral Elec­tric Corp. (NYSE: GE) was the same stake of 10.585 mln shares. This stake was raised in 2014 and had been tele­graphed be­fore be­cause of the war­rants.

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