In its SEC 13F filing on May 15, 2012, Berkshire Hathaway revealed several significant changes to its equity portfolio that were made during the first quarter. The largest addition was the purchase of 7.7 million shares of Wal-Mart with a current market value of $495 million. This resulted in an increase of 20% in Berkshire’s stake in the company. The second largest purchase was for 10.6 million shares of Wells Fargo, currently valued at $340 million, which increased Berkshire’s holdings by 3%. The third largest purchase was for 3.3 million shares of DaVita, currently valued at $265 million. This increased Berkshire’s stake in the company by 124%. DaVita represented one of the largest holdings in the hedge fund, Peninsula Capital, that was managed by Ted Weschler prior to his joining Berkshire earlier this year.
Berkshire’s largest sales during the first quarter were 9.0 million shares of Kraft ($350 million, 10% of stake), 3.5 million shares of Procter & Gamble ($220 million, 5% of stake), and 3.8 million shares of Intel ($95 million, 33% of stake).
Berkshire also reported “confidential information has been omitted…and filed separately” with the SEC. Most likely Warren Buffett is accumulating a large position in one or more companies. Last year Berkshire received confidential treatment while it was accumulating $11 billion of IBM.
Two new purchases during the first quarter were 10 million shares of General Motors ($220 million) and 1.6 million shares of Viacom ($75 million). Both of these purchases were most likely made by Berkshire’s new portfolio managers, Todd Combs, who joined Berkshire in early 2011, or Ted Weschler, because of their relatively small size.
I am quoted in a Bloomberg article (May 15) on Berkshire’s investments in General Motors and Viacom:
“There’s a pent-up demand for cars in this country, because of the financial crisis,” David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business, said in a phone interview. Buffett’s stock pickers “had an opportunity to buy at an attractive price, well below the initial public offering price,” he said. …
Berkshire’s stake in Viacom, the owner of MTV and Paramount Pictures, recalls Weschler’s holding of Liberty Media Corp. when he was running hedge fund Peninsula Capital Advisors LLC, said the University of Maryland’s Kass. Viacom advanced 0.6 percent in New York trading.
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