Berkshire Hathaway’s SEC 13F filing for the quarter ending September 30, revealed a stake of 40.1 million shares of Exxon Mobil (XOM) that is currently valued at $3.8 billion at XOM’s closing price of $95.27 on November 15. The majority of these shares were purchased by Warren Buffett during the second quarter of 2013, with the balance being added in the third quarter. Berkshire Hathaway had previously received permission from the SEC (confidential treatment) to withhold its investment in XOM from its second quarter 13F filing.
Berkshire also reported a 44% reduction in its position in ConocoPhillips (COP) during the third quarter. It sold 10.6 million shares of COP which are currently valued at $745 million at COP’s closing price of $73.30 on November 15.
I am quoted in a Bloomberg article discussing Berkshire’s investment in Exxon Mobil:
Exxon Mobil “is undervalued, in his opinion, and pretty much being ignored by the market,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business who has taken students to meet Buffett in Omaha. “He knows the company. He knows it well.”
Buffett could have been drawn to Exxon because he hasn’t been able to find a big acquisition recently, causing cash to accumulate at his company, said the University of Maryland’s Kass. The investment also could be beneficial if it’s still in the portfolio after Buffett’s no longer leading the company.
Stock in the energy company “certainly does a lot better than sitting in U.S. Treasury bills,” Kass said. “This is a conservative, safe stock — a nice position for whenever a successor takes over.”
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