Warren Buffett is no stranger to multibillion-dollar investments. The Oracle of Omaha has been beating the market for decades while accumulating positions in some of the world’s most popular companies. Courtesy of a new filing, we now have a peek at how the legendary investor deployed capital in the first three months of 2017.
Many institutional investment managers recently filed their mandatory 13F with the Securities & Exchange Commission (SEC). The filing is a quarterly report of equity holdings required by managers who oversee more than $100 million in qualifying assets and must be filed within 45 days of the end of each quarter. The 13F provides a glance at what firms did in the previous quarter, but investors should keep in mind that hedging and trading strategies of each fund are still unknown.
Buffett’s Berkshire Hathaway made several big changes in the three months ended March 31, 2017. The conglomerate sold off its stake in 21st Century Fox, and increased positions in American Airlines, Southwest Airlines, Apple, Bank of New York Mellon, Liberty Media, and Sirius XM. Berkshire Hathaway sold 5 million shares of its Delta stake.
The largest investments in Berkshire Hathaway’s portfolio include some of the most popular blue chips known to Wall Street. Let’s take a look at Berkshire Hathaway’s top 10 holdings according to dollar value at the end of March, not including Buffett’s option to purchase 700 million shares of Bank of America at any time prior to September 2021 for $5 billion. No. 3 has been rapidly climbing Botanic Blog’s list of Buffett’s biggest holdings, and it’s one of the most beloved companies in the world.
The bond credit rating agency is Berkshire Hathaway’s No. 10 largest holding at the end of March, thanks to a sharp rise in share price. Buffett and company held 24.7 million shares, unchanged from the prior quarter and worth $2.8 billion.
Moody’s reported a revenue of $3.6 billion in 2016, and has a presence in 36 countries. In the most recent quarter, the company announced an operating income of $443.4 million, up 46% from the first quarter of 2016.
Next: One of America’s biggest cable companies.
9. Charter Communications
You may have cut the cord, but millions of people haven’t. Charter is the second largest cable operator in America. You may already be familiar with their Spectrum brand. It’s also Berkshire Hathaway’s No. 9 largest holding. At the end of the first quarter, Berkshire Hathaway held 9.4 million shares, worth $3.1 billion.
In 2016, Charter officially completed its $65 billion merge with Time Warner Cable and Bright House. As of December 31, 2016, Charter’s network passed 49.2 million homes and businesses, and served 26.2 million residential and small and medium business customers.
Next: A popular bank with more than 3,100 offices across the nation.
8. U.S. Bancorp
The financial industry is no stranger to Buffett. Berkshire Hathaway held 85.1 million shares of U.S. Bancorp at the end of the first quarter, worth $4.4 billion. The position is unchanged from the prior quarter, but what was deemed as the “Trump rally” in financial share prices continues to keep U.S. Bancorp as one of Berkshire Hathaway’s largest holdings.
U.S. Bancorp is based in Minneapolis and has nearly half a trillion dollars in assets. It’s the parent company of U.S. Bank National Association, the fifth largest commercial bank in the United States. The Company operates 3,106 banking offices in 25 states and 4,842 ATMs. In October, MONEY named U.S. Bank the Best Big Bank in a tie with TD Bank.
Next: An oil giant that Buffett once kept secret.
7. Phillips 66
The multinational American energy company was originally thought to be sold off by Buffett in the second quarter of 2015. As it turns out, Buffett had the stake classified as confidential so it wouldn’t show on the 13F and allow copycat investors to run the price up. At the end of March, Berkshire Hathaway held 80.7 million shares (worth $6.4 billion), unchanged the previous quarter, according to the 13F. Phillips 66 is Berkshire Hathaway’s No. 7 largest holding, and appears to be a favorite, especially when its share price dips toward $75.
Unlike oil giants Exxon Mobil and Chevron, Phillips 66 has escaped most of the carnage seen in the energy sector. Buffett told CNBC in 2015: “We’re buying it because we like the company and we like the management very much.”
Next: A company that Buffett admits he got wrong and is now selling.
6. International Business Machines
If you’re looking for a reason not to follow in Buffett’s footsteps, IBM is it. The company was the worst performer in the Dow Jones Industrial Average in 2014, and one of the worst performers in 2015. In fact, IBM’s revenue has fallen for 20 consecutive quarters. IBM’s stock price surged from $115 to $180 in the span of a year, but Buffett recently did some selling and now the stock is below its highs.
Citing strong competitors, Buffett says he “revalued” IBM’s business downward, and sold about a third of his 81 million share position, adding that Berkshire Hathaway sold a “reasonable amount” once the share price broke above $180. However, as of the end of March, Berkshire Hathaway held 64.6 million shares, worth $11.2 billion.
Next: Buffett’s favorite credit card company.
5. American Express
Warren Buffett has liked American Express since at least the 1960s. Today, the credit card giant is Berkshire Hathaway’s No. 5 largest holding. At the end of the first quarter, Berkshire Hathaway held 151.6 million shares (worth $12 billion), unchanged from the prior quarter.
American Express shares have struggled in recent years. Costco severed ties from American Express after 16 years in business with each other. American Express was able to make a deal with Sam’s Club, but it did little to comfort Mr. Market at the time. However, shares found a bottom in early 2016 after touching $50, and are in the green this year. Berkshire Hathaway’s positions in Mastercard and Visa come nowhere close to the size of its American Express position.
Next: The most predictable position at Berkshire Hathaway.
Coca-Cola is the most predictable position at Berkshire Hathaway. Buffett is on record saying he will never sell his shares in the world-renowned beverage company, and can often be seen holding a Cherry Coke. At the end of the first quarter, Berkshire Hathaway held the usual 400 million shares of Coca-Cola (worth $17 billion), making it the company’s No. 4 largest holding.
While sugar water has seen its fair share of problems over the years, Coca-Cola shares have been experiencing support near $40 since late 2015. Coca-Cola has investments in Monster Beverage, Keurig Green Mountain, and Suja Juice. The company is also making operating changes to drive stronger growth and save $3 billion annually by 2019.
Next: One of the most beloved companies in the world.
The beloved Apple is on our Buffett Cheat Sheet list for only the second time. Berkshire Hathaway is completely on the Apple train and now owns 129.4 million shares of the tech giant, worth $18.6 billion, according to the 13F.
Despite concerns about growth, Apple doesn’t appear to be slowing down. The company continues to sell millions of iPhones every quarter like clockwork. Furthermore, Apple’s cash hoard of $257 billion will likely continue to reward investors with dividends and share buybacks for years to come. Apple returned $10 billion to investors in the first quarter alone. In May, Apple announced another $50 billion increase in its capital return program.
Next: The most infamous bank in the market right now.
2. Wells Fargo
America’s second most profitable bank is also Buffett’s No. 2 largest holding. Berkshire Hathaway held 479.7 million shares (worth $26.7 billion) of Wells Fargo at the end of March. Somewhat surprisingly, this was once again unchanged from the prior quarter.
Wells Fargo quickly become Buffett’s most controversial holding in September. The mega bank finally admitted it created roughly 2 million fake accounts, which inflated sales numbers and banking fees. Wells Fargo had an incentive program in place that essentially forced employees to commit fraud or risk being fired for underperforming unrealistic sales goals. More than 5,000 workers related to the scandal were fired. Wells Fargo CEO John Stumpf also resigned in the wake of the financial abuse.
More recently, the number of fraudulent accounts has ballooned to as many as 3.5 million. Some communities, such as East Orange County in New Jersey, are also pulling public funds from Wells Fargo to take a stand against the mega-bank’s actions.
Next: A stake worth almost $30 billion.
1. Kraft Heinz
Berkshire Hathaway’s position in the merged Kraft Heinz has been listed on the 13F for the past seven quarters. Buffett teamed up with investment firm 3G Capital to takeover Kraft Foods with Heinz. The deal created one of the biggest food companies in history, with over 10 different brands valued at more than $500 million each. More recently, the company has laid off thousands of workers to cut costs and “consolidate manufacturing across the Kraft Heinz North American network.” In August, Kraft Heinz raised its quarterly dividend 4.3% to $0.60 per share.
Buffett and company held 325.6 million shares of Kraft Heinz at the end of March, worth a whopping $29.6 billion. That makes it Buffett’s largest portfolio holding.
Disclosure: Author holds BRKB and AAPL
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