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