In the last week we reported that the only stock that Warren Buffett bought for Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) over the fourth quarter of 2010 was Wells Fargo (WFC, Financial). This triggers us to look deeper into his position and cost on Well Fargo Shares. An interesting question here: at what prices is Warren Buffett willing to pay for Well Fargo Shares?
As of Sept. 30, 2004, Warren Buffett owned 112 million shares of Well Fargo. Over the past 6 years, he bought 229 million more shares at the cost of $7.1 billion. This table is the history of Warren Buffett’s trades with Wells Fargo over the past 6 years.
With these numbers we found that the average cost of Well Fargo shares for Berkshire Hathaway was $31.17 a share, only about 5% lower than its close price on last Friday. Does this mean that Warren Buffett is willing to pay more than $31 for Wells Fargo shares?
If we look at the table more carefully, we found that Warren Buffett was willing to pay more than $35 a share before the market crash in 2008. Since 2008, the market gave him better opportunities. He buys when Well Fargo stock is traded below $28, and stops buying when the price is above $28.
Since 2008, Berkshire’s cost on Wells shares is considerably lower. Warren Buffett bought a total of 53 million shares of Wells Fargo at the total cost of $1.3 billion. This gives an average cost per share of $24.38, 25% below Wells Fargo’s close price last Friday.
Therefore, with the recent trading price of Wells Fargo, we do not expect to see Warren Buffett buying the shares again. But if the stock is traded below $27, we will not be surprised to see him striking again. Above all, this is the only stock that he keeps buying now.
A question here: Warren Buffett is willing to buy Wells Fargo at below $27, are you?
Check out the details of Warren Buffett’s portfolio:
1. Top Holdings
2. Top Yield Stocks
3. Buffett stocks that insiders are also buying.
As of Sept. 30, 2004, Warren Buffett owned 112 million shares of Well Fargo. Over the past 6 years, he bought 229 million more shares at the cost of $7.1 billion. This table is the history of Warren Buffett’s trades with Wells Fargo over the past 6 years.
| Date (YYYYMMDD) | Total Shares | New Shares | Quarterly Average Price ($) | Total Cost ($) |
| 20040930 | 112,896,760 | $ 29.03 | ||
| 20041231 | 112,896,760 | 0 | $ 30.67 | 0 |
| 20050331 | 112,896,760 | 0 | $ 30.20 | $ - |
| 20050630 | 112,896,760 | 0 | $ 30.23 | $ - |
| 20050930 | 169,630,960 | 56,734,200 | $ 30.19 | $ 1,712,521,827 |
| 20051231 | 170,184,400 | 553,440 | $ 30.67 | $ 16,974,005 |
| 20060331 | 185,161,200 | 14,976,800 | $ 31.69 | $ 474,614,792 |
| 20060630 | 190,641,600 | 5,480,400 | $ 33.30 | $ 182,469,918 |
| 20060930 | 190,641,600 | 0 | $ 25.53 | $ - |
| 20061231 | 204,022,100 | 13,380,500 | $ 36.04 | $ 482,233,220 |
| 20070331 | 232,244,700 | 28,222,600 | $ 35.29 | $ 995,975,554 |
| 20070630 | 257,675,468 | 25,430,768 | $ 35.60 | $ 905,335,341 |
| 20070930 | 279,669,568 | 21,994,100 | $ 35.38 | $ 778,151,258 |
| 20071231 | 289,259,868 | 9,590,300 | $ 32.56 | $ 312,260,168 |
| 20080331 | 290,654,868 | 1,395,000 | $ 29.53 | $ 41,194,350 |
| 20080630 | 290,654,868 | 0 | $ 28.00 | $ - |
| 20080930 | 290,407,668 | -247,200 | $ 30.03 | $ (7,423,416) |
| 20081231 | 290,244,868 | -162,800 | $ 29.53 | $ (4,807,484) |
| 20090331 | 302,609,212 | 12,364,344 | $ 16.53 | $ 204,382,606 |
| 20090630 | 302,609,212 | 0 | $ 22.49 | $ - |
| 20090930 | 313,355,657 | 10,746,445 | $ 26.41 | $ 283,813,612 |
| 20091231 | 320,088,385 | 6,732,728 | $ 27.60 | $ 185,823,293 |
| 20100331 | 320,088,385 | 0 | $ 28.59 | $ - |
| 20100630 | 320,088,385 | 0 | $ 30.33 | $ - |
| 20100930 | 336,408,845 | 16,320,460 | $ 26.08 | $ 425,637,597 |
| 20101231 | 342,623,925 | 6,215,080 | $ 27.70 | $ 172,157,716 |
| Net Shares Bought | 229,727,165 | Total Cost | $ 7,161,314,357 |
With these numbers we found that the average cost of Well Fargo shares for Berkshire Hathaway was $31.17 a share, only about 5% lower than its close price on last Friday. Does this mean that Warren Buffett is willing to pay more than $31 for Wells Fargo shares?
If we look at the table more carefully, we found that Warren Buffett was willing to pay more than $35 a share before the market crash in 2008. Since 2008, the market gave him better opportunities. He buys when Well Fargo stock is traded below $28, and stops buying when the price is above $28.
Since 2008, Berkshire’s cost on Wells shares is considerably lower. Warren Buffett bought a total of 53 million shares of Wells Fargo at the total cost of $1.3 billion. This gives an average cost per share of $24.38, 25% below Wells Fargo’s close price last Friday.
Therefore, with the recent trading price of Wells Fargo, we do not expect to see Warren Buffett buying the shares again. But if the stock is traded below $27, we will not be surprised to see him striking again. Above all, this is the only stock that he keeps buying now.
A question here: Warren Buffett is willing to buy Wells Fargo at below $27, are you?
Check out the details of Warren Buffett’s portfolio:
1. Top Holdings
2. Top Yield Stocks
3. Buffett stocks that insiders are also buying.
