Investing

Warren Buffett and Berkshire Hathaway Make Major Changes to Equity Holdings

Jon C. Ogg

Published: November 14, 2018 5:04 pm

Last Updated: January 11, 2020 2:52 pm

Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of September 30, 2018, and many key changes have been seen. Warren Buffett still runs Berkshire Hathaway and, as he is one of the richest men alive, he is considered by many investors to be one of the greatest investors of the modern era. That sure implies that maybe he knows a thing or two about stock picking. And Buffett is also considered “Moby Dick” when it comes to the so-called whale-watchers who chase stock picks and strategies of the best investors.

24/7 Wall St. has tracked many of the investment picks and investing trends of America’s top investment managers, hedge fund managers and independent investors. Buffett and Berkshire Hathaway top that list. After all, Berkshire Hathaway and Buffett are sort of considered to be a hedge fund, a mutual fund, private equity, a financial services giant and a conglomerate all rolled into one entity (with two classes of shares).

Of the $207.3 billion worth of equity holdings as of the end of September, Berkshire Hathaway’s earnings and quarter filings showed that approximately 69% of the total fair value was concentrated in just five companies. For what it is worth, the actual 13F filing showed Berkshire Hathaway’s September 30 holdings of $221 billion in equities. These have been featured below and are followed by new changes to the Berkshire Hathaway portfolio. Small changes have not been tracked as Team Buffett has been moving away from having 10% of the outstanding shares of companies.

What matters about the holdings of Buffett is that some of the changes are gradual, while others are more rapid. We have focused on only the major holdings of Berkshire and the positions that actually changed from the prior quarter. These are Warren Buffett’s top stock holdings and positions that saw changes during the third quarter of 2018.

American Express Co. (NYSE: AXP) was the same 151.6 million shares as it has been for years. This was called a $16.1 billion stake on its quarterly earnings report.

Apple Inc. (NASDAQ: AAPL) was a $57.6 billion stake at the end of September, and the new 13-F filing showed it as 252,478,779 shares. This is marginally higher than in the second quarter, but Buffett already said in an interview that he had added a small number of shares.

Bank of America Corp. (NYSE: BAC) was a $26.5 billion stake when it reported earnings, but this was actually a larger stake of 877.25 million shares at the end of June. It had been counted as 679 million shares in June, and this was started as a big post-recession stake before Berkshire Hathaway converted its debt stake to equity.

Coca-Cola Co. (NYSE: KO) was the same 400 million shares, which is a stake that has not changed in years and years. Berkshire Hathaway’s earnings counted it as an $18.5 billion stake.

Wells Fargo & Co. (NYSE: WFC) has been shrinking as a stake in recent quarters after years of being increased. Berkshire Hathaway’s earnings report showed it worth some $24.4 billion, and this is no longer the largest stake of all public equities held by Berkshire Hathaway and Buffett. The September 2018 stake was 442.36 million shares, down from 452.0 million in June and from 456.5 million prior to that.

Kraft Heinz Co. (NASDAQ: KHC) is also a continued massive holding that is outside of the normal book-keeping in the largest public equity holdings. Berkshire Hathaway owned 325,442,152 shares of Kraft Heinz common stock at the end of September, representing 26.7% of the outstanding shares. The fair value of this investment was roughly $17.9 billion as of September 30.

A 2018 press release from Berkshire Hathaway confirmed that some “10% stakes” had been sold and others had been increased in other equity securities around the SEC’s 10% threshold for filings and restrictions. That release said:

These buy and sell decisions did not reflect our investment management’s views as to the relative attractiveness of the bought and sold securities but were rather a response to the 10% limitation. Similar situations may occur in future quarterly reports as Berkshire continues to have 9% plus holdings in a number of equity securities that are active repurchasers of their shares.

On DaVita Inc. (NYSE: DVA), a more recent SEC filing was made just this week. It showed that Berkshire Hathaway and its affiliates owned 38,565,570 shares for a 23.2% stake as of November 7, 2018. As of June 30, 2018, that DaVita stake was 38,565,570 ‎shares, and the changes made in the SC-13D/A filing were amended within the Berkshire entities.

There may have been other slight changes made in the Berkshire holdings, but the main changes and large additions and deletions are shown below.

American Airlines Group Inc. (NASDAQ: AAL) was a slightly smaller stake of 43.7 million shares, down from 44.7 million shares last quarter and making a second quarterly stake change.

Bank of New York Mellon Corp. (NYSE: BK) was a larger stake of 77.85 million shares at the end of September, up from 64.8 million shares in June and from 62.19 million shares in March.

Delta Air Lines Inc. (NYSE: DAL) was a larger stake of 65.54 million shares, up from 63.67 million shares in June and from almost 54.0 million shares in March.

General Motors Co. (NYSE: GM) was a larger stake of 52.46 million shares in September, up from 51.39 million shares in June and from 50.0 million shares in a prior report.

Goldman Sachs Group Inc. (NYSE: GS) was again listed as a larger stake of 18.35 million shares at the end of September 2018. This was just 13.25 million shares at the end of June and 10.959 million shares at the end of March. The original stake dated back to a recession financing Buffett made via preferred shares that he ultimately converted to an equity stake.

JPMorgan Chase & Co. (NYSE: JPM) is (maybe) an entirely new stake of 35.66 million shares for Berkshire Hathaway. Investors should know that Buffett previously said that he owned some of the JPMorgan shares in his own account before.

Oracle Corp. (NYSE: ORCL) was listed as a new stake entirely for Berkshire Hathaway, at 41.4 million shares as of the end of September.

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Phillips 66 (NYSE: PSX) was lowered yet again, down to 15.43 million shares. This stake already had been lowered to about 34.7 million shares in the prior quarter due to Buffett wanting to get out from under the 10% holding threshold.

Southwest Airlines Co. (NYSE: LUV) was a slightly smaller stake of 56.05 million shares. That is a tad smaller than the 56.54 million shares at the end of June but is still larger than the 47.66 million shares in an earlier report.

Travelers Companies Inc. (NYSE: TRV) is a new stake for Berkshire Hathaway, with a 3.54 million share stake worth close to $459 million at the end of the third quarter.

United Continental Holdings Inc. (NYSE: UAL) was listed as 25.98 million shares, down from 26.684 million shares in June and 27.7 million shares in March.

U.S. Bancorp (NYSE: USB) saw its stake rise yet again to a level of 124.92 million shares. This was listed as 100.69 million shares at the end of June and as 90.847 million shares previously.

Walmart Inc. (NYSE: WMT) had been trimmed down in prior quarters, but it has been eliminated from the Berkshire Hathaway holdings as of September 30.