Over the years, Gates’s friendship with Buffett has influenced Gates’s investment style. The portfolio of the Bill and Melinda Gates Foundation now mirrors that of Buffett’s Bekshire Hathway. As of June 30, 2010, the portfolio has over $11 billion worth of stocks. About half of that amount is in the form of Berkshire Hathaway stocks, gifted by Buffett. Gates’s performance, and that of his Foundation, has begun to increasingly mimic Buffett’s; and, more often than not the two billionaires share the same position.
In spite of the recent the economic climes, Gates remains optimistic in predicting a rise in fortunes for his foundation. The poor market performance drove Gates to rely more heavily on Buffett’s advice: “I talked to Warren Buffett, our co-trustee, more than ever this year to try to understand what was going on in the economy.” We can expect that one party’s moves will predict those of the other.
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|Top Five Holdings in 2010||Ticker||Percent Composition||Number of Shares|
|Coca Cola Company||KO||4.99||11,682,000|
Berkshire Hathaway (BRK.B)
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. Berkshire’s Insurance businesses are conducted on both a primary basis and a reinsurance basis. The Company also owns and operates a number of other businesses engaged in a variety of activities. Berkshire’s insurance businesses provide insurance and reinsurance of property and casualty risks worldwide and also reinsure life, accident and health risks worldwide. Its property/casualty reinsurance business in North America is conducted through General Reinsurance Corporation.
Their shares trade around $78.04, with an EPS of $6,850.38. Over the past ten years, BKR.B has seen an annual revenue growth of 6.6% per share. Gurufocus rated BRK.B with the business predictability rank of 1-star.
Caterpillar Inc. (CAT)
Caterpillar Inc. is engaged in the manufacturing of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Caterpillar operates in three principal lines of business: Machinery, Engines and Financial products. Machinery line of business includes the design, manufacture, marketing and sales of construction, mining and forestry machinery. Engines line of business includes designs, manufactures, marketing and sales of engines for Caterpillar machinery; electric power generation systems, and marine, petroleum, construction, industrial, agricultural and other applications and related parts.
Their shares trade around $105.00, with a P/E ratio of 18.6 and an EPS of $5.60. In the last quarter of 2010, CAT had revenue of $12.9 billion and a net income of $1.7 billion. Over the past ten years, CAT has seen an annual revenue growth of 11.3% per share. Gurufocus rated CAT with the business predictability rank of 1-star.
The Coca-Cola Company is the owner and marketer of nonalcoholic beverage brands. It also manufactures, distributes and markets concentrates and syrups used to produce nonalcoholic beverages. The Company owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks.
Their shares trade around $64.00, with a P/E ratio of 12.68 and an EPS of $5.05. In the last quarter of 2010, CocaCola had revenue of $10.4 billion and a net income of $5.7 billion. Over the past ten years, KO has seen an annual revenue growth of 8% per share. Gurufocus rated KO with the business predictability rank of 1-star.
McDonalds Corp (MCD)
McDonald’s Corporation franchises and operates McDonald’s restaurants in the global restaurant industry. These restaurants serve a varied, limited, value-priced menu in more than 100 countries around the world. All restaurants are operated either by it or by franchisees, including conventional franchisees under franchise arrangements, and foreign affiliated markets and developmental licensees under license agreements. The Company and its franchisees purchase food, packaging, equipment and other goods from various independent suppliers. It offers a range of products. Independently owned and operated distribution centers, approved by it, distribute products and supplies to McDonald’s restaurants.
Their shares trade around $82.00, with a P/E ratio of 17.26 and an EPS of $4.73. In the last quarter of 2010, MCD had revenue of $6.1 billion and a net income of $1.6 billion. Over the past ten years, MCD has seen an annual revenue growth of 8.2% per share. Gurufocus rated MCD with the business predictability rank of 4-stars.
Waste Management (WM)
Waste Management, Inc. is a holding company and all operations are conducted by its subsidiaries. The Company is a provider of waste management services in North America. Its subsidiaries provide collection, transfer, recycling and disposal services. The Company is also a developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the United States. The Company manages and evaluates its operations through five groups. The Company’s four geographic operating groups, consisting of its Eastern, Midwest, Southern and Western Groups, provide collection, transfer, disposal and recycling services. Its fifth Group is the Wheelabrator Group, which provides waste-to-energy services, and manages waste-to-energy facilities and independent power production plants.
Their shares trade around $39.00, with a P/E ratio of 19.52 and an EPS of $2.00. In the last quarter of 2010, WM had revenue of $3.1 billion and a net income of $306 million. Over the past ten years, WM has seen an annual revenue growth of 4.7% per share. Gurufocus rated WM with the business predictability rank of 3.5-stars.
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