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Warren Buffett's Berkshire Hathaway Buys General Motors and Viacom, Adds WMT, WFC, IBM, DVA

Holly LaFon

Holly LaFon

277 followers
Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.A)(BRK.B), and his two new portfolio managers, Todd Combs and Ted Weschler, bought two new stocks in the first quarter: General Motors (GM) and Viacom Inc. Cl B (VIAB).

Buffett also added to existing holdings: Bank of New York Mellon (BK), Davita Inc. (DVA), Liberty Media (LMCA), Walmart Stores (WMT), DirecTV (DTV) and IBM (IBM).

He reduced Berkshire’s positions in Ingersoll Rand (IR), Procter & Gamble (PG), Kraft Foods Inc. (KFT), Dollar General (DG), Intel Corp. (INTC) and Verisk Analytic (VRSK). He sold out of Comdisco Holding (CDC).

New Buys

General Motors (GM)

Buffett bought 10 million shares of General Motors (GM) at an average price of $25 per share. The stock price has declined 11% since then.

General Motors Company is engaged in the designing, manufacturing and retailing of vehicles globally including passenger cars, crossover vehicles, and light trucks, sport utility vehicles, vans and other vehicles. General Motors has a market cap of $34.45 billion; its shares were traded at around $22.3 with a P/E ratio of 5.7 and P/S ratio of 0.2.

Viacom Inc. Class B (VIAB)

Buffett bought 1,591,670 shares at an average price of $48. The stock price has declined 2% since then.

Viacom is a global entertainment content company whose family of prominent and respected brands includes the multiplatform properties of MTV Networks, BET Networks, Paramount Pictures, Paramount Home Entertainment and DreamWorks. Viacom Inc. Cl B has a market cap of $23.31 billion; its shares were traded at around $46.99 with a P/E ratio of 11.7 and P/S ratio of 1.6. The dividend yield of Viacom Inc. Cl B stocks is 2.1%. Viacom Inc. Cl B had an annual average earnings growth of 45.2% over the past five years.

Additions

Bank of New York Mellon (BK)

Buffett added 3,813,551 shares of Bank of New York Mellon (BK) at an average price of $22. He initiated the position with 1,992,759 shares at an average price of $25 in the third quarter of 2010, and sold 198,844 shares at an average price of $28. At the end of the first quarter, Buffett owned a total of 5,607,466 shares.

Bank of New York Mellon is a bank holding company and one of the world's larger financial institutions. Bank of New York Mellon has a market cap of $26.63 billion; its shares were traded at around $21.12 with a P/E ratio of 10.4 and P/S ratio of 1.8. The dividend yield of Bank of New York Mellon stocks is 2.3%.

Davita Inc. (DVA)

Buffett added 3,315,500 shares of Davita Inc. (DVA) at an average price of $84. In the fourth quarter of 2011 he bought 2,684,500 shares at an average price of $71. At the end of the first quarter of 2012, he owned a total of 6 million shares.

DaVita Inc. is one of the largest providers of high-quality dialysis and related services for patients suffering from chronic kidney failure, also known as end stage renal disease. Davita Inc. has a market cap of $7.77 billion; its shares were traded at around $82.23 with a P/E ratio of 14.6 and P/S ratio of 1.1. Davita Inc. had an annual average earnings growth of 17.8% over the past 10 years. GuruFocus rated Davita Inc. the business predictability rank of 3.5-star.

Liberty Media (LMCA)

Buffett added 1,298,600 shares of Liberty Media (LMCA) at an average price of $86. He initiated the position with 1,701,400 shares at an average price of $75. At the end of the first quarter of 2012, he owned 3 million shares.

Liberty Media Corporation owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Liberty Media has a market cap of $9.98 billion; its shares were traded at around $84.43 with a P/E ratio of 56 and P/S ratio of 7.1.

Walmart Stores (WMT)

Buffett bought 7,671,000 shares of Walmart at an average price of $61. He initiated the position in the third quarter of 2009 with 17,892,342 shares at an average price of $50, and bought 1,200,500 shares in the fourth quarter of 2009 at an average price of $53. At the end of the first quarter of 2012, he owned 46,708,142 shares.

Walmart Stores Inc. is the world's largest retailer. Walmart Stores has a market cap of $202.07 billion; its shares were traded at around $59.35 with a P/E ratio of 13.3 and P/S ratio of 0.5. The dividend yield of Walmart Stores stocks is 2.7%. Walmart Stores had an annual average earnings growth of 11.3% over the past 10 years. GuruFocus rated Walmart Stores the business predictability rank of 5-star.

DirecTV (DTV)

Buffett bought 2,651,200 shares of DirecTV (DTV) at an average price of $46. He initiated the position in the third quarter of 2011 with 4,249,400 shares at an average price of $46, and added 16,099,000 shares at an average price of $45 in the fourth quarter of 2011. At the end of the first quarter of 2012, he owned 22,999,600 shares.

DirecTV is a provider of digital multichannel television entertainment in the United States and Latin America. DirecTV has a market cap of $32.19 billion; its shares were traded at around $46.99 with a P/E ratio of 12.9 and P/S ratio of 1.2. DirecTV had an annual average earnings growth of 33.4% over the past 10 years. GuruFocus rated DirecTV the business predictability rank of 2.5-star.

Wells Fargo (WFC)

Buffett added 10,631,300 shares of Wells Fargo (WFC) at an average price of $31. It is a long-term holding. At the end of the first quarter of 2012, Buffett owned 394,334,928 shares.

Wells Fargo & Co. is a diversified financial services company providing banking, insurance, investments, mortgage and consumer finance services through stores, its Internet site and other distribution channels across North America as well as internationally. Wells Fargo has a market cap of $175.8 billion; its shares were traded at around $32.24 with a P/E ratio of 11.5 and P/S ratio of 2. The dividend yield of Wells Fargo stocks is 2.6%. Wells Fargo had an annual average earnings growth of 2.2% over the past 10 years. GuruFocus rated Wells Fargo the business predictability rank of 2-star.

IBM (IBM)

Buffett bought 489,769 shares of IBM at an average price of $195 per share. He initiated the position in the first quarter of 2011 at an average price of $159. At the end of the first quarter of 2012, he owned 64,395,700 shares.

IBM uses advanced information technology to provide customer solutions. IBM has a market cap of $233.09 billion; its shares were traded at around $199.3 with a P/E ratio of 14.5 and P/S ratio of 2.2. The dividend yield of IBM stocks is 1.7%. Intl Bus Mach had an annual average earnings growth of 11.8% over the past 10 years. GuruFocus rated IBM the business predictability rank of 4.5-star.

See Warren Buffett’s equity portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Warren Buffett.


Rating: 3.4/5 (27 votes)

Comments

mcwillia
Mcwillia - 2 years ago
Well, GM. Hummm. High capex, horribly underfunded pension, highly-competitive marketplace, no moat, union labor, long term prospects sketchy, little free cash flow, historically underwhelming management, no competitive advantage, vulnerable to inflation, vulnerable to lower-cost foreign production...Really Guys?--Really? Did the Mayan Calendar reverse the world's gravitation field and all Buffett's investment principles too? Maybe Ted and Todd are just aping the old Peter Lynch Chrysler trade?
sww
Sww - 2 years ago
GM - Really?
noblepaladin
Noblepaladin - 2 years ago
GM is trading at a P/E of about 5, so it is cheap. But it is in a terrible business, I wouldn't touch it at a P/E of more than 7. However, Buffett typically avoids terrible businesses even if they are cheap. I guess Ted and Todd have a slightly different philosophy.
Josh Zachariah
Josh Zachariah - 2 years ago
We should be careful on the wording - "Berkshire Hathaway Buys GM, Viacom..."
yhlbb
Yhlbb - 2 years ago
Totally agree with Pepper999. It should be "Berkshire Hathaway Buys GM, Viacom..." or "Warren Buffett's Berkshire Hathaway Buys..." (CNBC) or "Berkshire Adds General Motors, Viacom Stakes" (Barron's).

If the text is generated by a computer program, it should replace "Buffett added" with "Berkshire added," etc.
JMoney
JMoney - 2 years ago


From the 2011 Berkshire Annual Report, Buffett owned exactly 400,015,828 shares of Wells Fargo at YE 2011. It's stated in the above article that he now owns 394,334,928 shares. IF that is true, Buffett actually sold WFC is Q1. What's the correct answer?
gurufocus
Gurufocus premium member - 2 years ago
No Warren Buffett did not sell Wells Fargo. We have always observed the difference from 10Q/10K and 13F share numbers. We believe the difference is caused by 13F and 10Q/10K report different part of Berkshire Hathaway.
tonyg34
Tonyg34 - 2 years ago
anyone looking for an interesting twist on BRK's GM buy should give a look at FIATY. Fiat is super cheap at 0.4X book 0.1 X sales 0.6 X cash flow and a PE ration around 3. Talk about taking fears of a euro slowdown to the extreme.

the numbers could be screwed up because of the spin-off of the farm equipment company, but that seems like it would be a small part of the overall company, so numbers should still be ballpark.

I have no idea what Warren/Todd/Ted were thinking but I'll give them the benefit of the doubt that they are better at investing than I am.

Solid opportunity to ride coattails at a lower entry price than they paid
kfh227
Kfh227 premium member - 2 years ago


Instead of say "GM, that's stupid", why not say, "GM, why?"
batbeer2
Batbeer2 premium member - 2 years ago
>> the numbers could be screwed up because of the spin-off of the farm equipment company, but that seems like it would be a small part of the overall company,

LOL

Case, Iveco, Magirus, Cobelco, Steyr, New Holland..... Fiat industrial is substantially bigger than Paccar and Deere. That is not an insignificant spin-off.

It was mentioned here.


Having said that, yes, Fiat is certainly worth a look.

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