Berkshire owned 48 million shares of Moody’s before June 2009. It received its shares from the spin-off of Dun & Bradstreet (NYSE:DNB), with a cost base of about $10 a share. Once traded at above $70 a share, Moody’s stock price collapsed to below $20 amid its role in the financial crisis and the market crash in 2009. Warren Buffett sold 15 million shares at the prices of $20s. The recent bull market pushed Moody’s stock price up to $60 again. So Warren Buffett started to sell again.
This is the holding history of Warren Buffett:
Warren Buffett liked Moody’s because the unique position of the company in credit ratings. It has a wide moat and extremely low capital requirement. But Moody’s has largely lost its most important asset during the financial crisis – its credibility. That is probably why Warren Buffett sells.
Buffett still owns more than 26 million shares of Moody’s. We won’t be surprised to see he continues to sell these shares. We will monitor this closely and report any buys and sells in GuruFocus Real Time Picks.