Warren Buffett is famous for noting that his favorite holding period for a stock is "forever." As a result, his investment holding company, Berkshire Hathaway, makes waves when it buys or sells a stock.
The following list, culled from the first three quarterly reports of this year, shows both the major transactions in Warren Buffett's portfolio along with insights into his investment strategy.
Take a look and see if any of these Warren Buffett stocks make sense in your portfolio and discover which companies the "Oracle of Omaha" loves.
Change in position: Sold nearly 2.3 million shares
Buffett chose to lighten his position in numerous airlines in the second quarter of 2017, including American Airlines Group. His sale of 4.62 percent of his shares left Berkshire Hathaway with 47 million shares of AAL. The fact that Buffett had stakes in any airlines at all was news when he initiated his positions in 2016, as he had previously been quoted painting the industry in a negative light. Although he still suffered losses on his positions in the third quarter of 2017, trimming his holdings the previous quarter helped reduce the damage to his portfolio.
Change in position: Bought 76.7 million shares
Warren Buffett made news (again) in 2016 when he put aside his long-standing aversion to technology companies and acquired millions of shares of Apple stock. That move came after another Berkshire Hathaway money manager bought around 10 million shares of the tech giant. By June 30, 2017, Berkshire's position had grown to 130.2 million shares of Apple. Buffett indicated that he had more faith in Apple than in IBM, and went a step further and told reporters that he had never sold a single share of Apple since he had begun buying it. Berkshire Hathaway owns about 134 million shares of Apple, up from 57.36 million at the end of 2016.
Change in position: Opened new position by buying 700 million shares; ended quarter with 679 million shares
One of Warren Buffett's most noteworthy recent moves occurred in the third quarter of 2017, when he exercised warrants to buy 700 million shares of Bank of America common stock for the bargain price of $7.14 per share. With a stock price of $26.74 as of November 20, Mr. Buffett's purchase is a huge money-maker. The purchase brings to fruition a deal Buffett made in 2011, paying $5 billion for a package deal of Bank of America preferred stock, paying a 6 percent dividend and the warrants. To fund the exercise of the warrants, Buffett effectively exchanged the $5 billion in preferred stock for the common stock. The deal is just one of many examples where Buffett accurately predicted the stock market.
Change in position: Bought about 17 million shares
Buffett put the pedal to the metal with Bank of New York Mellon, increasing his stake in the bank by 52.1 percent during the third quarter of 2017, to just more than 50 million shares. This position represents 1.58 percent of the Berkshire Hathaway portfolio, and 4.68 percent of the total outstanding shares of Bank of New York Mellon. The bank provides steady earnings and stable income and is not dependent on interest rates to improve profits because it doesn't offer loans — all factors that likely appeal to Buffett.
Change in position: Sold about 900,000 shares
Buffett was an aggressive acquirer of Charter Communications stock in 2014 and 2015. In 2016 and 2017, however, Berkshire Hathaway reduced its position in the stock. The company currently owns about 8.5 million shares of Charter, down about 900,000 shares from the end of 2016. Berkshire Hathaway still owns about 2.8 percent of Charter's total outstanding stock.
Change in position: Maintained current holdings
Coca-Cola has long been one of Warren Buffett's favorite investments. For starters, the company exhibits many of the qualities that Buffett cherishes: a wide "moat" to keep out competitors, sustainable and predictable earnings and a high dividend. Buffett himself is also a big fan of the product, claiming to drink five Coca-Cola products every day. But this "forever holding" might be vulnerable to a future sale. At the end of 2016, Buffett's son, Howard Buffett, left his position on the Board of Directors at Coca-Cola.
Change in position: Liquidated entire position of 10.6 million shares
Warren Buffett made an unusual and fairly dramatic move during the 2017 second quarter: He dumped all of his General Electric stock. With the stock having a rough 2017, Buffett's sale proved prescient. GE shares fell from $27.01 on June 30 to $17.98 as of Nov. 20, a drop of over 33 percent. Along the way, Buffett collected a nice dividend and even made money on GE, with the stock rising about 40 percent during the period Berkshire Hathaway owned it.
Change in position: Bought 10 million shares
Buffett increased his stake in General Motors by 20 percent during the second quarter of 2017, to 60 million shares. General Motors had a five-year average yearly earnings growth rate of 8.2 percent at the time and carried a forward dividend yield of 4.35 percent, an attractive combination to investors like Buffett. From a cash flow perspective alone, Buffett stands to earn over $2.6 million per year just in GM dividends. In addition to its valuation and cash flow, Buffett may be interested in GM management's shifting focus from market share to return on invested capital and credit quality.
Change in position: Sold about 44 million shares
Buffett originally bought IBM in 2011, at prices between $158 and $185. At the Nov. 20 price of $151.95, the stock has not been a performer for Buffett. After increasing his share count of IBM in 2016, the next year Buffett began unloading some of his shares. Total IBM shares of over 81 million at the end of 2016 fell to just more than 37 million by the third quarter of 2017. Buffett told financial news network CNBC that he no longer valued IBM the same way he did when he was actively buying it.
Change in position: Maintained current holdings
Berkshire Hathaway did not buy or sell any stock in Kraft Heinz as of November 2017, but that inaction can be interpreted as a "strong buy" recommendation from Warren Buffett. Berkshire's position in KHC represents one of the single largest holdings in the company's entire portfolio, valued at nearly $16 billion and representing a 26.7 percent ownership position of the stock as of Sept. 30, 2017. Through the first nine months of 2017, Berkshire Hathaway earned $594 million just in dividends on Kraft Heinz stock.
Change in position: Bought 13.6 million shares
Liberty SiriusXM is an unusual type of stock in that it tracks another company. Liberty is a diverse company that offers tracking stocks for each of the properties it invests in, either SiriusXM, Formula One or the Atlanta Braves. The Liberty tracking stock doesn't pay a dividend but offers a way to buy SiriusXM at a discount. In the second quarter of 2017, Berkshire increased its Liberty stake by 45.01 percent.
Change in position: Bought 831,682 shares
Monsanto provides seeds for fruits, vegetables and crops such as corn, soybeans and cotton. Berkshire Hathaway initiated its Monsanto position in the 2016 fourth quarter at prices between $98 and $106. It upped its stake about 10 percent more in the third quarter of 2017, to a total of 8.87 million shares. With a closing share price of $118.09 as of Nov. 20, Berkshire's stake is worth more than $1 billion. The stock could be in line for further gains as it still trades below its agreed-upon acquisition price of $128 per share offered by Bayer.
Change in position: Sold about 28 million shares
While Buffett's Berkshire Hathaway was upping its stake in Liberty Media in 2017, it was dropping its direct exposure to SiriusXM. In the second quarter Berkshire's share count in SiriusXM dropped by nearly 20 percent, to just shy of 138 million shares. Shares of SIRI are a bit different than the Sirius tracking stock issued by Liberty Media, in that an investment in SIRI pays a dividend and gives a direct vote. The structure of the Liberty tracking shares might suit Buffett's investment purposes better, at least for now.
Change in position: Bought about 4.45 million shares
Berkshire Hathaway increased its Southwest Airlines position in the first quarter of 2017, with the company adding about 4.45 million shares of LUV to its portfolio. The position is significant, totaling more than 8 percent of total outstanding Southwest shares. Buffett began buying the stock in the fourth quarter of 2016 at prices between $38.50 and $51. The stock currently trades near $55, and has only added to Buffett's extraordinary wealth.
Change in position: New position, bought 18.6 million shares
During the 2017 second quarter Berkshire Hathaway initiated a new position in Store Capital, a real estate investment trust whose main clients are stand-alone, service-oriented retail businesses. After buying up nearly 10 percent of the entire company, Berkshire Hathaway turned an immediate profit, as the stock had run up by 30 percent in less than three months. Berkshire continued to maintain its original position as of the third quarter.
Change in position: New position, bought 20.8 million shares
Synchrony Financial, a new play for Berkshire Hathaway in 2017, is the credit card spinoff from General Electric that began trading in 2014 at about $23 per share. Berkshire Hathaway made two purchases of Synchrony in 2017, one for 17.46 million shares and one for 3.34 million shares. This brings current holdings to 20.8 million shares with a value of over $704 million at the Nov. 20 share price of $33.86.
Change in position: Liquidated position of nearly 9 million shares
Buffett reversed course and sold all of his stake in 21st Century Fox in the first quarter of 2017. Negative news items surrounded the stock, from sexual harassment scandals to the trend of cord-cutting and how it would affect the profits of cable news networks. Fox also backed the run of presidential candidate Donald Trump while Buffett, a long-time Democrat, backed Hillary Clinton. In its second quarter 2017 filling, Berkshire Hathaway had shed all 8.95 million shares of Fox.
Change in position: Liquidated position of 3.37 million shares
Buffett had a relatively small position in Wabco Holdings to begin with, but he unloaded it throughout 2017. At the end of 2016, Berkshire Hathaway held 3.37 million shares of WBC, but that position had been completely liquidated by the 2017 third quarter. Wabco, the leading global supplier of commercial vehicle technologies, is the type of old-line, "easy-to-understand" business that Buffett traditionally likes. However, with the small number of shares involved, it appears that Berkshire's interest in the company was just a test position rather than the type of concentrated, long-term position that Buffett favors.
Change in position: Sold about 9 million shares
Wells Fargo has long been one of the largest positions in the Berkshire Hathaway portfolio. Buffett has referred to the bank as an "incredible institution," and he has praised Wells Fargo CEO Tim Sloan's handling of recent scandals at the bank. Buffett occasionally sells shares in WFC to keep his ownership of the company below 10 percent, at which point additional regulatory filing is required.
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