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Warren Buffett Watch
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Warren Buffett's Berkshire Hathaway has just released its fourth quarter stock portfolio snapshot.
Instead of asking what Buffett has been buying, we should have been wondering what Buffett has been selling.
Most notably, Berkshire slashed its holdings in Johnson and Johnson [JNJ
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] to just 28.6 million shares as of December 31. That's a drop of almost 54 percent. It had reported holding 61.8 million shares as of the end of the third quarter on September 30.
That brings Berkshire's stake in J&J down to just under 4 percent from almost 8 percent.
Johnson and Johnson's shares price fell almost 18 percent during the fourth quarter. We don't know whether Buffett avoided any or all of that drop since the filing doesn't say when the shares were sold. We do know that the stock is down another 6.4 percent year-to-date, a drop that Berkshire has avoided on the 33.2 million shares sold. Based on their December 31 close, those 33 million shares were worth about $2 billion.
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Berkshire also made a sizable cut in its holdings of another healthcare company, Procter & Gamble [PG
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]. That stake fell 9 percent to 96.3 million shares from 105.8 million.
Berkshire's smaller cuts in Q4:
- ConocoPhillips [COP
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] fell 4.8 percent to 79.9 million shares
- CarMax [KMX
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] dropped 4.4 percent to 17.6 million shares
- US Bancorp [USB
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] reduced by 7.4 percent to 67.6 million shares
Buffett wasn't just selling in the fourth quarter. Berkshire increased these holdings:
- NRG Energy [IR
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] soared 44 percent to 7.2 million shares
- Ingersoll-Rand [IR
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] increased by 38.1 percent to 7.8 million shares
- Eaton [ETN
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] jumped by 10 percent to 3.2 million shares
And there's one new stake: about 8.7 million shares of Nalco Holding. [NLC
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]
On its web site, the company describes itself as "the leading integrated water treatment and process improvement company in the world."
At today's closing price of $11.06, the Nalco stake is worth just $96 million. (The stock is getting a 6 percent boost in after-hours trading.)
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And Buffett is holding tight on his big financial holdings, including stakes in American Express [AXP
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] and Wells Fargo [WFC
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].
Overall, the dollar value of Berkshire's disclosed stock portfolio fell 25.8 percent to just under $52 billion as of December 31, down from almost $70 billion on September 30.
Our Berkshire Hathaway Portfolio Tracker shows the portfolio holdings as of December 31 are worth $41.4 billion, using today's closing prices
So what happened to Buffett's high-profile call last October to buy U.S. stocks? He said then he was buying domestic equities for his personal account. Apparently he felt Berkshire's money could be put to better use elsewhere. One alternative we know about are Berkshire high-interest rate loans to well-known companies facing tough times, such as Tiffany, Swiss Re, Harley-Davidson, Goldman Sachs, and General Electric.
Bloomberg quotes Buffett-style investor Mohnish Pabrai as saying before the portfolio filing, "Buffett has shown a preference over the past couple years toward buying whole companies, the debt markets or other private deals."
That's certainly evident in today's filing.
Data is a real-time snapshot *Data is delayed at least 15 minutes