Major Changes to Berkshire Hathaway’s Portfolio During First Quarter of 2016

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May 312016
 

In an SEC Form 13F filing on May 16, 2016, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) reported its common stock portfolio as of March 31, 2016.  There were two major changes that had not previously been reported:

(1) An initial investment in Apple (NASDAQ: AAPL) of 9.8 million shares that were valued at $1.1 billion on March 31.  This investment was made by Todd Combs or Ted Weschler.

(2) The sale of its entire investment in AT&T (NYSE: T) of 46.6 million shares that were valued at $1.6 billion on December 31, 2015.  This investment resulted from AT&T’s acquisition of DirecTV (NASDAQ:DTV), which was an earlier investment by Todd Combs and Ted Weschler.

Other smaller changes to Berkshire’s portfolio were:

  • Additional positions in Bank of New York Mellon (NYSE:BK), Charter Communications (NASDAQ:CHTR), Deere & Co. (NYSE:DE), International Business Machines (NYSE:IBM), Liberty Media (NASDAQ:LMCA)(NASDAQ:LMCK), Liberty Global (NASDAQ:LBTYA)(NASDAQ:LBTYK), and Visa (NYSE:V).
  • Reductions in investments in Mastercard (NYSE:MA), Wabco (NYSE:WBC), and Wal-Mart (NYSE:WMT).

Previously, Berkshire had disclosed its increase in its investment in Phillips 66 (NYSE:PSX).

During the first quarter Berkshire acquired Precision Castparts (NYSE:PCP).  It also swapped virtually all of its shares in Procter & Gamble (NYSE:PG) for ownership of Duracell.

(Note:  I was quoted in the Wall Street Journal and the Washington Post on May 17, 2016 on Berkshire’s investment in Apple.)

 

 

 

 

 

 Posted by at 3:29 pm

Berkshire Hathaway Continues To Add to Its Phillips 66 Stake

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May 262016
 

In an SEC Form 4 filing this evening, Berkshire Hathaway reported that it added $51 million to its stake in Phillips 66 (NYSE: PSX) on May 24, 25, and 26 at $79.10 – $79.97 per share.  Berkshire Hathaway now owns 77 million shares of PSX, representing 14.6% of its outstanding shares.  Berkshire’s PSX investment is valued at $6.2 billion at today’s closing price on the New York Stock Exchange of $80.04.  Previously, Warren Buffett had disclosed that PSX was his investment and not that of his portfolio managers Todd Combs and Ted Weschler.

 Posted by at 9:39 pm

Berkshire Hathaway Adds To Its Phillips 66 Stake

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May 232016
 

In an SEC Form 4 filing this evening, Berkshire Hathaway reported that it added $64 million to its stake in Phillips 66 (NYSE: PSX) on May 19, 20 and 23 at approximately $77.50 – $78.50 per share.  Berkshire Hathaway now owns 76.4 million shares of PSX, representing 14.5% of its outstanding shares.  This is the first PSX purchase Berkshire has made in three months.  Berkshire’s PSX investment is valued at $5.9 billion at today’s closing price on the New York Stock Exchange of $77.82.  Previously, Warren Buffett had disclosed that PSX was his investment and not that of his portfolio managers Todd Combs and Ted Weschler.

ValueWalk has published this blog post.

 Posted by at 11:14 pm

Berkshire Hathaway Takes $1 Billion Stake in Apple

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May 162016
 

In an SEC 13F filing released earlier this morning, Berkshire Hathaway revealed an initial $1 Billion stake in Apple (AAPL) as of March 31, 2016.  The investment was likely made by Todd Combs or Ted Weschler.

I am quoted in the Wall Street Journal on this topic:

“It appears to be a low-risk investment with considerable upside potential…however, I do not think this is an investment that Buffett would make,” said David Kass, a Berkshire shareholder and finance professor at the University of Maryland business school. “Todd Combs and/or Ted Weschler…perhaps have a better understanding of the competitive advantages Apple possesses vis a vis the technological challenges it might face in the years ahead.”

I am also quoted in a Washington Post article:

For David Kass, a University of Maryland Business School professor who writes frequently on Buffett, that makes sense given that the size of the deal — roughly $1 billion —  is the amount that Combs and Weschler typically invest. Buffett himself generally invests in the $10 billion range.

Apple stock has also plummeted recently, making it a possible target for investors hunting for discounted stocks.

“I certainly did not expect this investment,” Kass said. “But from a value investor point of view it makes some sense.”

 Posted by at 7:47 am
May 012016
 
This is a link to my interview on Bloomberg Radio on April 29, previewing the Berkshire annual meeting (There are 3 minutes of financial news preceding my 8 minute interview)
I was also quoted in two articles in the Omaha World-Herald (April 29 and April 30):

David Kass, a Berkshire shareholder, researcher and business professor at the University of Maryland, says that from 1965 through 1998, Berkshire’s book value compounded at an average annual rate of 25 percent, versus 13 percent for the S&P 500, dividends included.

The growth rate, however, dimmed to 9 percent from 1999 through 2015, versus 7 percent for the S&P 500, with dividends included. Worse, between 2009 and 2015, Berkshire has underperformed the S&P 500, with an average annual compounded return of 12 percent versus 15 percent for the index.

Has Buffett lost his touch? Is there some toxic flaw deep in the inner workings at Berkshire?

Not really. If anything, Berkshire supporters say, the company is simply a victim of its own size, and expectations should naturally change.

“The greatest limiting factor to Berkshire’s rate of growth in per-share book value is its increasing size,” Kass said. “With total assets of $552 billion at year-end 2015, and ranked fifth in market capitalization in the S&P 500, it is becoming increasingly difficult to move the needle.”

The entire article is available at:

Also,

University of Maryland business professor and Berkshire shareholder David Kass has attended the past 10 meetings and has kept detailed notes on each, including reviews of the Berkshire-produced short film, which has been a draw in recent years.

“The attendance has grown each year from 24,000 in 2006 to over 40,000 in 2015,” Kass said. I have always enjoyed the humorous film starring Warren and Charlie at the beginning of the annual meeting.”

As the attendance has grown over the years, so have the lines to get into the CenturyLink Center, Kass said, with shareholders recently beginning to arrive in line at 4 a.m. for a 7 a.m. entrance.

“In the earlier days I was able to recognize people I knew at the meeting a lot more easily than recently with the larger crowds,” Kass said. “But the main reason I am there has not changed — to be in the same room with Warren and Charlie as they answer shareholder questions.”

The entire article is available at:

 Posted by at 7:32 pm