Investing

Massive Changes for Berkshire Hathaway and Warren Buffett Stocks in 2017

Jon C. Ogg

Published: February 14, 2017 5:32 pm

Last Updated: January 12, 2020 2:49 pm

Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of December 31, 2016, and the number of changes in the equity portfolio were nothing short of massive. What investors are going to take away from this report is that this is the public portfolio of Warren Buffett stocks for 2017.

24/7 Wall St. has tracked Warren Buffett and Berkshire Hathaway’s investments over the years, and there were many surprises seen from the end of 2016 versus a year earlier. Some of Buffett’s changes have been substantial.

Warren Buffett and his team of portfolio managers listed some 148 positions worth a whopping $147.9 billion in equities in the official Form 13F filing with the U.S. Securities and Exchange Commission. This compared to $128.8 billion as of the end of the third quarter of 2016 and $115.46 billion as of December 31.

It is important to understand that some changes are made by Buffett himself, with 14 sub-entities of Berkshire Hathaway in prior filings. Other changes may have come from the likes of newer portfolio managers Ted Weschler and Todd Combs. It appears as though the Buffett portfolio managers have been given much larger investing amounts.

If there is one key takeaway for the 2017 stocks, it would be that this was one of the largest changes we have seen in years. New stakes were added and other stakes were grown. Other stakes were cleaned out or decreased.

24/7 Wall St. has known for years now that four stocks make up the lion’s share of the Berkshire Hathaway public holdings. One issue to consider is that Berkshire Hathaway’s public equity investments are held in other instruments outside of common stocks, which are not counted in this 13F filing. Berkshire Hathaway invested $3 billion in 2009 into preferred shares of Dow Chemical, and it invested $5 billion for preferred shares and warrants in Bank of America back in 2011.

Wells Fargo & Co. (NYSE: WFC) was listed as 479,704,270 shares, the same stake as seen in September. As a reminder, it has been documented that Buffett has filed to be allowed to increase his stake north of the 10% threshold with the SEC, and Buffett did not sell any Wells Fargo shares after the account-opening scandal and during the Stumpf exit. International Business Machines Corp. (NYSE: IBM) was listed as 81.232 million shares at the end of 2016, the same as in September, June and March. Buffett’s Big Blue stake has been raised previously. Three more giant stakes that remained static were as follows:

• Coca-Cola Co. (NYSE: KO) was the exact same stake of 400 million shares. This position has remained static, and Buffett has defended his stake for years.
• American Express Co. (NYSE: AXP) was the same 151.6 million or so shares, a position that remains perpetually static. We have said this before, but Buffett has owned Amex for so long it may be cheaper for him to just hold rather than pay capital gains.
• Kraft Heinz Co. (NYSE: KHC) was listed as the same 325,634,818 shares and was previously a stake from the 3G Capital deal. The value in the portfolio was a whopping $28.4 billion, but that was down from the prior quarter. Please note that the 10-Q filing for September 30 said that the carrying value of this investment was down to $15.711 billion as it had recorded a noncash pretax holding gain of approximately $6.8 billion in 2015.

Apple Inc. (NASDAQ: AAPL) was a vastly larger stake at the end of the fourth quarter of 2016 when compared with the third quarter. The new Apple stake is some 57,359,652 shares, up from just 15.227 million in the prior quarter. Apple shares just hit a new all-time high on this same day. This may seem odd considering that Buffett is good friends with Bill Gates, but that was certainly a position taken by Weschler or Combs.

Another major change that had been seen was a big bet on the airline sector. This was divulged late in 2016 and was a noted departure by Buffett’s portfolio managers rather than by Buffett himself. That position was recently shown to have been wildly profitable. These larger airline stakes were shown as follows:

• American Airlines Group Inc. (NASDAQ: AAL) was a new stake last quarter, but that stake rose to 45.54 million shares from 21.77 million shares.
• United Continental Holdings Inc. (NYSE: UAL) was a much larger stake of 28.95 million shares at the end of 2016. This had been listed as a new stake of 4.533 million shares at the end of September.
• Delta Air Lines Inc. (NYSE: DAL) was listed as a new stake of 60.02 million shares. This is massively higher than the prior stake of 6.333 million shares.
• Southwest Airlines Co. (NYSE: LUV) was also a stake that was taken at the end of the third quarter, but it was unknown about the actual size because Buffett hadn’t disclosed that stake. The Southwest stake at the end of 2016 was just over 43.2 million shares.

Phillips 66 (NYSE: PSX) was the same 80.689 million shares at the end of 2016 versus the end of September, but the stake was a Buffett pick and had been raised from 78.782 million shares as of June 30 and 75.55 million share stake in March of 2016. As a reminder, Phillips 66 had previously had been classified as an elimination in 2015 and then was shown after Buffett got the stake classified with the SEC as confidential.

The full list of Warren Buffett and Berkshire Hathaway stock holdings as of December 31, 2016 was shown as follows:

Axalta Coating Systems Ltd. (NYSE: AXTA) was the same stake of 23.324 million shares, after having been listed as a new position of 20 million shares.

Bank of New York Mellon Corp. (NYSE: BK) was a larger stake yet again at 21.671 million shares at the end of 2016. This was 21.136 million shares as of September 30 and has grown more since the start of 2016.

Charter Communications Inc. (NASDAQ: CHTR) was 9.443 million shares, and this position has fluctuated.

Costco Wholesale Corp. (NASDAQ: COST) was the same stake at 4,333,363 shares.

DaVita Inc. (NYSE: DVA) was the same 38.565 million 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) appears to have been eliminated entirely from the Berkshire Hathaway portfolio. This was previously a slightly smaller stake at 21.085 million shares as of September 30.

General Electric Corp. (NYSE: GE) was the same stake of 10.585 million shares. It was raised in 2014 and had been telegraphed before because of the warrants.

General Motors Co. (NYSE: GM) was the same stake of exactly 50 million shares, but this previously had been raised from 41 million shares last year.

Goldman Sachs Group Inc. (NYSE: GS) was the same stake of 10.959 million shares, but this had been as high as 12.631 million shares prior to the end of 2015.

Graham Holdings Co. (NYSE: GHC) remains the same tiny stake of 107,575 shares in the remains of the Washington Post breakup.

Johnson & Johnson (NYSE: JNJ) was the same tiny stake of only 327,100 shares, but Buffett watchers know this is a leftover bit from a much larger stake in years past.

Kinder Morgan Inc. (NYSE: KMI) was eliminated entirely from Berkshire Hathaway’s public stocks. This had been a lower stake and was last seen down at 20 million shares in September, versus 26.533 million shares as of June 30. Kinder Morgan was selected by one of Buffett’s portfolio managers rather than on his own.

Lee Enterprises Inc. (NYSE: LEE) was eliminated entirely after having been the same tiny stake of only 88,863 shares.

Liberty Media Corp. (NASDAQ: LMCA) and Liberty Global PLC (NASDAQ: LBTYA) are both again listed as Buffett and Berkshire Holdings, but this now shows up as Sirius XM shares under Liberty Media.

M&T Bank Corp. (NYSE: MTB) was the same position at 5.382 million shares, and this stake has been static for quite some time.

Mastercard Inc. (NYSE: MA) was the same 4.934 million shares at the end of 2016. While unchanged from prior quarters, the Mastercard stake was 5,229,756 shares at the end of 2015.

Mondelez International Inc. (NASDAQ: MDLZ) is the same position again at 578,000 shares, remaining handily lower than in the past and dating back to the Kraft breakup.

Monsanto Co. (NYSE: MON) was a new stake listed as some 8.04 million shares at the end of 2016.

Moody’s Corp. (NYSE: MCO) was the same position of 24.669 million shares yet again, but this stake is much lower than in years past.

Procter & Gamble Co. (NYSE: PG) is still a tiny stake of just 315,400 shares, same as in March and in April. This had previously been listed as almost 52.8 million shares in the prior formal 13F report before the Duracell swap. P&G had once peaked at 96.3 million shares in the Buffett stocks.

Restaurant Brands International Inc. (NYSE: QSR) was the same stake at 8.438 million shares. As noted previously, this stake is much larger if you consider the $3 billion in perpetual preferred shares Buffett received.

Sanofi (NYSE: SNY) was the same position at 3.905 million shares.

Torchmark Corp. (NYSE: TMK) the same stake at 6.353 million shares.

Twenty-First Century Fox Inc. (NASDAQ: FOXA) was the same size of 8.951 million shares at the end of 2016, and the same as at the end of 2015. This stake was raised from 6.228 million shares in prior reports, versus 4.747 million shares at the end of 2014.

United Parcel Service Inc. (NYSE: UPS) was the same position of just 59,400 shares, which is way down from 2012.

U.S. Bancorp (NYSE: USB) was the same size of 85.06 million shares at the end of 2016, but this stake had been raised slightly before the prior quarters (it was 80.09 million shares at the end of 2014).

USG Corp. (NYSE: USG) was the same stake at just over 39.002 million shares, but this had been raised prior to the end of 2014.

Verisign Inc. (NASDAQ: VRSN) was the same 12.952 million share stake, but that had been reduced previously from 13.044 after having previously grown in 2014.

Verizon Communications Inc. (NYSE: VZ) was practically eliminated, down to just 928 shares worth a mere $50,000 at the end of 2016. This was likely overlooked as it was 15 million shares during most of 2016.

Verisk Analytics Inc. (NASDAQ: VRSK) was the same position at 1,563,434 shares, but that is lower than in prior quarters before the last quarter.

Visa Inc. (NYSE: V) was the same size stake of 10.562 million shares versus at the end of the third quarter, but this stake is up from 10.239 million shares at the end June and up from 9.885 million shares in 2015.

WABCO Holdings Inc. (NYSE: WBC) was listed as 3.368 million shares and this stake has fluctuated through time.

Wal-Mart Stores Inc. (NYSE: WMT) was a massively lower stake, down to 1.393 million shares at the end of 2016. That stake had been cut down to about 12.9 million shares at the end of September and had been as high as 60.385 million shares during 2015.