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Warren Buffett's Berkshire Hathaway Cuts Johnson & Johnson Stake By Half

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 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.

Berkshire also made a sizable cut in its holdings of another healthcare company, Procter & Gamble . That stake fell 9 percent to 96.3 million shares from 105.8 million.

Berkshire's smaller cuts in Q4:

  • ConocoPhillips fell 4.8 percent to 79.9 million shares

  • CarMax dropped 4.4 percent to 17.6 million shares

  • US Bancorp 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 soared 44 percent to 7.2 million shares
  • Ingersoll-Rand increased by 38.1 percent to 7.8 million shares
  • Eaton jumped by 10 percent to 3.2 million shares

And there's one new stake: about 8.7 million shares of Nalco Holding.

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.)

And Buffett is holding tight on his big financial holdings, including stakes in American Express and Wells Fargo .

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.

COMPLETE DETAILS ON BERKSHIRE PORTFOLIO FILING

Here are the details from tonight's Berkshire Hathaway portfolio snapshot as of December 31, compared to the filing for September 30.

ADDED STAKES

  • Constellation Energy added at 19,894,322 shares. Berkshire obtained these shares in mid-December as part of its break-up fee after Constellation agreed to be acquired by √Člectriciti√© de France and canceled its tentative deal with Berkshire's MidAmerican Energy Holdings. Subsequent filings show that Berkshire sold over five million shares in January and early February, bringing its holdings down to 14,831,107 shares as of February 6.


  • Nalco Holding added at 8,739,100 shares.


INCREASED STAKES

  • Burlington Northern increased 9.9% to 70,089,829 shares from 63,785,418 shares.
    (Berkshire reported holding 76,777,029 shares as of January 30.)


  • Eaton Corp. stake increased 10.0% to 3,200,000 shares from 2,908,700 shares. Eaton was a new holding as of the end of the third quarter.


  • Ingersoll-Rand stake increased 38.1% to 7,782,600 shares from 5,636,600 shares.


  • NRG Energy stake increased 44.0% to 7,200,000 shares from 5,000,000 shares. The stake was also up in the third quarter, increasing by 54.4%.


DECREASED STAKES

  • Carmax stake decreased 4.4% to 17,636,500 shares from 18,444,100 shares from 21,300,000 shares.


  • ConocoPhillips stake decreased 4.8% to 79,896,273 shares from 59,688,000 shares.


  • Johnson & Johnson stake decreased 53.7% to 28,611,591 shares from 61,754,448 shares.


  • Procter & Gamble stake decreased 9.0% to 9,530,990 shares from 105,847,000 shares.


  • US Bancorp stake decreased 7.4% to 67,551,426 shares from 72,937,126 shares.

  • UnitedHealth Group stake decreased 1.3% to 6,300,000 shares from 6,379,900 shares.

  • Wells Fargo stake decreased 0.1% to 290,244,868 shares from 290,407,668 shares.

UNCHANGED STAKES

  • American Express unchanged at 151,610,700 shares.


  • Bank of America unchanged at 5,000,000 shares. The stake had dropped 45.1% in the third quarter.


  • Coca-Cola unchanged at 200,000,000 shares.


  • Comcast unchanged at 12,000,000 shares.


  • Comdisco unchanged at 1,538,377 shares.


  • Costco Wholesale unchanged at 5,254,000 shares.


  • Gannett unchanged at 3,447,600 shares.


  • General Electric unchanged at 7,777,900 shares.


  • GlaxoSmithKline unchanged at 1,510,500 shares.


  • Home Depot unchanged at 3,700,000 shares.


  • Iron Mountain unchanged at 3,372,200 shares.


  • Kraft Foods unchanged at 138,272,500 shares.


  • Lowes Companies unchanged at 6,500,000 shares.


  • M&T Bank unchanged at 6,715,060 shares.


  • Moody's unchanged at 48,000,000 shares.


  • Nike unchanged at 7,641,000 shares.


  • Norfolk Southern unchanged at 1,933,000 shares.


  • Sanofi Aventis unchanged at 3,903,933 shares.


  • SunTrust Banks unchanged at 3,204,600 shares.


  • Torchmark unchanged at 2,823,879 shares.


  • USG unchanged at 17,072,192 shares.


  • Union Pacific unchanged at 8,906,000 shares.


  • United Parcel Service unchanged at 1,429,200 shares.


  • Wabco Holdings unchanged at 2,700,000 shares.


  • Wal-Mart Stores unchanged at 19,944,300 shares.


  • Washington Post unchanged at 1,727,765 shares.


  • Wellpoint stake unchanged at 4,777,300 shares.


  • Wesco Financial unchanged at 5,703,087 shares.


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