Buffett Dumps Moody's (MCO, BRK-A)

Moody’s Corporation (NYSE: MCO) just got a rather interesting insider selling shares, none other than Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A).  The listed entities were Berkshire itself, National Indemnity, OBH, and GEICO.  The new stake is down to 16.98% from roughly 20.2%.  The filing outlines the terms for more shares to possibly be sold ahead.  Frankly, this should have come long ago.

Here were the listed sales in the filing:

7/20/09… 1,817,000 at $28.7269 average in open market sale.
7/21/09… 3,915,100 at $26.9188 average in open market sale.
7/22/09… 2,254,200 at $26.6425 average in open market sale.

In the filing:  One or more of the reporting persons may determine to sell additional Shares in the open market or otherwise, depending upon price, market conditions, availability of funds, evaluation of alternative investments and other factors. While none of the persons filing this Schedule has any present plans to purchase any shares of MCO Common Stock, one or more of them could determine, based upon the same set of factors listed above with respect to sales, to purchase additional shares of MCO Common Stock or other securities of Moody’s Corporation. Except as set forth above, the reporting persons have no intention to effect any of the transactions specified in Item 4 of Schedule 13D.

National Indemnity Company is the holder of record of 24,294,300 shares, or 10.31% of the outstanding common stock.  GEICO is the holder of record of 15,719,400 shares, or 6.67% of the outstanding common stock.

Frankly, after the new regulations have been coming for almost an eternity and after Moody’s and its rivals did such an awful job on the debt and mortgage ratings game, we are only surprised by the notion that Buffett and friends held shares for this long of a time.

Moody’s closed down 1% today at $26.52, and shares are down almost 6% more right around $25.00 in late after-hours trading.  Moody’s 52-week trading range is $15.41 to $43.07.  Before the financial mess became the mortgage and debt crisis in 2007, this was a $60.00 stock.

Buffett usually likes to have an outlook period of close to eternity.  What does this tell you about the future model when you consider the new restrictions that lie ahead?

You can see the full list of Buffett holdings here.  Also, you can join our open email distribution list if you want to get daily and weekly emails showing developments on Buffett and other influential investors, IPOs, mergers, key insider trading, and more.

JON C. OGG