S&P 500 is down 9.3% year to date. How are the recent picks of Warren Buffett? What if you have bought these stocks after we report them? This is our study.
Warren Buffett’s stock holdings seem unhurt by the recent market downturn. With this study we would like to review the performances of his largest picks year to date, and compare it with the market average. Also we like to answer an interesting question: what if you bought these stocks on the day we report them? How well will you do?
Warren Buffett’s top four stocks picks last quarter were Kraft Foods Inc. (KFT, Financial), Burlington Northern Santa Fe Corp. (BNI, Financial), Wells Fargo and Company (WFC, Financial), and Carmax Inc. (KMX, Financial). Berkshire Hathaway also initiated holdings in GlaxoSmithKline plc (GSK, Financial). The performances of these stocks are show in table below.
WEB's Year to Date Performance
SYMBOL
START (Jan. 2, 2008)
END (Mar. 18, 2008)
GAIN
KFT
$32.55
$30.56
-6.1%
BNI
$83.34
$92.98
13.96%
WFC
$30.48
$31.54
3.5%
GSK
$50.45
$42.32
-6.11%
KMX
$19.88
$20.5
3.12%
AVERAGE: 1.67%, S&P -9.3%
The average return of these five stocks is 1.67% year to date, which is 10% better than the 9.3% decline of S&P100. In less than 3 months, these stocks have outperformed the market average by 10%.
Since we are not aware of his last quarter stock picks until Feb. 15, we like to check the performances of these stocks after that. Since Feb. 15, these stocks have returned an average of 1.88%, which is better than the 1.4% decline of S&P500 by 3.2%. The details are shown in this table:
WEB's Feb. 15 to Date Performance
SYMBOL
START (Feb. 15, 2008)
END (Mar. 18, 2008)
GAIN
KFT
$30.29
$30.56
0.89%
BNI
$88.92
$92.98
4.57%
WFC
$29.42
$31.54
7.21%
GSK
$44
$42.32
-3.82%
KMX
$20.39
$20.5
0.54%
AVERAGE: 1.88%, S&P -1.4%
Kraft Foods, Inc (KFT), Down 6.1% Year to Date
Kraft Foods, Inc (KFT) is Warren Buffett’s largest purchase during the past quarter. As of Dec. 31, 2007, Buffett owns more than 132 million shares of Kraft. He started to accumulate KFT since the first half of 2007, and delayed his reporting until February of 2008. The stock is down 6.1% year to date, better than S&P 500 by 3.2%.
The news that Warren Buffett purchases Kraft Foods has triggered a lot of discussions among our users. With an “elephant gun,” Warren Buffett does not have many elephants to hunt from. Kraft seems to fit his criteria of simple and good business.
Kraft Foods, Inc. engages in the manufacture and marketing of packaged foods and beverages worldwide. It has a market cap of $46.86 billion; its shares were traded at around $30.6 with a P/E ratio of 18.81 and P/S ratio of 1.23. The dividend yield of Kraft Foods Inc. stocks is 3.6%.
Kraft is widely owned among other Gurus. Richard Aster Jr bought 22,400 shares in the quarter that ended on 12/31/2007, which is 0.02% of the $3.4 billion portfolio of Meridian Fund. There are quite some insider buying activities too within Kraft Foods.
Burlington Northern Santa Fe Corporation (BNI), Up 13.96% Year to Date
Warren Buffett keeps buying BNI over the past year. He bought BNI at the prices between $75 to $85. As of Jan., Berkshire owns more than 63 million shares, representing more than 18% of total shares outstanding.
Buffett’s purchases of railroad companies surprised a lot of his followers initially. During the Berkshire annual meeting last year, Buffett said that railroad business would never be "sensational," yet its prospects had improve. Charlie Munger, Vice Chairman of Berkshire Hathaway, commented during the annual meeting of Wesco Financial (WSC), Buffett and he himself “used to not like them because they needed large amounts of capital, had tough unions, and stiff competition from the trucking business. The paradigm had shifted. Now the railroad industry has a competitive advantage by double-stacking freight. With all of the imports from China , the U.S. has a huge amount of freight being sent across the county.”
Wells Fargo & Company (WFC), Update 3.5% Year to Date
Wells Fargo & Company is a long term holding of Buffett. He praised the quality of the company many times in his interviews before. Wells Fargo seems unscratched by the financial crunch other banks are experiencing.
In his most recent shareholder letter, Buffett wrote: Some major financial institutions have, however, experienced staggering problems because they engaged in the “weakened lending practices” I described in last year’s letter. John Stumpf, CEO of Wells Fargo , aptly dissected the recent behavior of many lenders: 'It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine.”
Wells Fargo Chairman Richard Kovacevich said that they will increase acquisitions this year, and the targets are likely to be larger than the banks bought recently. He also said “We are finding more assets at better values than we've seen in five years.”
Wells Fargo & Company has a market cap of $103.98 billion; its shares were traded at around $ 31.54Ă‚ with a P/E ratio of 13.24 and P/S ratio of 2.75. The dividend yield of Wells Fargo & Company stocks is 4.4%.
Carmax Inc (KMX) and GlaxoSmithKline plc (GSK)
These two stocks have less than 1% of position in Berkshire ’s Portfolio. They may be from the equity holdings of Geico, which is managed by Lou Simpson. GlaxoSmithKline plc (GSK) recently hit 52-week low as health-care stocks are sold off on Wall Street.
Warren Buffett’s stock holdings seem unhurt by the recent market downturn. With this study we would like to review the performances of his largest picks year to date, and compare it with the market average. Also we like to answer an interesting question: what if you bought these stocks on the day we report them? How well will you do?
Warren Buffett’s top four stocks picks last quarter were Kraft Foods Inc. (KFT, Financial), Burlington Northern Santa Fe Corp. (BNI, Financial), Wells Fargo and Company (WFC, Financial), and Carmax Inc. (KMX, Financial). Berkshire Hathaway also initiated holdings in GlaxoSmithKline plc (GSK, Financial). The performances of these stocks are show in table below.
WEB's Year to Date Performance
SYMBOL
START (Jan. 2, 2008)
END (Mar. 18, 2008)
GAIN
KFT
$32.55
$30.56
-6.1%
BNI
$83.34
$92.98
13.96%
WFC
$30.48
$31.54
3.5%
GSK
$50.45
$42.32
-6.11%
KMX
$19.88
$20.5
3.12%
AVERAGE: 1.67%, S&P -9.3%
The average return of these five stocks is 1.67% year to date, which is 10% better than the 9.3% decline of S&P100. In less than 3 months, these stocks have outperformed the market average by 10%.
Since we are not aware of his last quarter stock picks until Feb. 15, we like to check the performances of these stocks after that. Since Feb. 15, these stocks have returned an average of 1.88%, which is better than the 1.4% decline of S&P500 by 3.2%. The details are shown in this table:
WEB's Feb. 15 to Date Performance
SYMBOL
START (Feb. 15, 2008)
END (Mar. 18, 2008)
GAIN
KFT
$30.29
$30.56
0.89%
BNI
$88.92
$92.98
4.57%
WFC
$29.42
$31.54
7.21%
GSK
$44
$42.32
-3.82%
KMX
$20.39
$20.5
0.54%
AVERAGE: 1.88%, S&P -1.4%
Kraft Foods, Inc (KFT), Down 6.1% Year to Date
Kraft Foods, Inc (KFT) is Warren Buffett’s largest purchase during the past quarter. As of Dec. 31, 2007, Buffett owns more than 132 million shares of Kraft. He started to accumulate KFT since the first half of 2007, and delayed his reporting until February of 2008. The stock is down 6.1% year to date, better than S&P 500 by 3.2%.
The news that Warren Buffett purchases Kraft Foods has triggered a lot of discussions among our users. With an “elephant gun,” Warren Buffett does not have many elephants to hunt from. Kraft seems to fit his criteria of simple and good business.
Kraft Foods, Inc. engages in the manufacture and marketing of packaged foods and beverages worldwide. It has a market cap of $46.86 billion; its shares were traded at around $30.6 with a P/E ratio of 18.81 and P/S ratio of 1.23. The dividend yield of Kraft Foods Inc. stocks is 3.6%.
Kraft is widely owned among other Gurus. Richard Aster Jr bought 22,400 shares in the quarter that ended on 12/31/2007, which is 0.02% of the $3.4 billion portfolio of Meridian Fund. There are quite some insider buying activities too within Kraft Foods.
Burlington Northern Santa Fe Corporation (BNI), Up 13.96% Year to Date
Warren Buffett keeps buying BNI over the past year. He bought BNI at the prices between $75 to $85. As of Jan., Berkshire owns more than 63 million shares, representing more than 18% of total shares outstanding.
Buffett’s purchases of railroad companies surprised a lot of his followers initially. During the Berkshire annual meeting last year, Buffett said that railroad business would never be "sensational," yet its prospects had improve. Charlie Munger, Vice Chairman of Berkshire Hathaway, commented during the annual meeting of Wesco Financial (WSC), Buffett and he himself “used to not like them because they needed large amounts of capital, had tough unions, and stiff competition from the trucking business. The paradigm had shifted. Now the railroad industry has a competitive advantage by double-stacking freight. With all of the imports from China , the U.S. has a huge amount of freight being sent across the county.”
Wells Fargo & Company (WFC), Update 3.5% Year to Date
Wells Fargo & Company is a long term holding of Buffett. He praised the quality of the company many times in his interviews before. Wells Fargo seems unscratched by the financial crunch other banks are experiencing.
In his most recent shareholder letter, Buffett wrote: Some major financial institutions have, however, experienced staggering problems because they engaged in the “weakened lending practices” I described in last year’s letter. John Stumpf, CEO of Wells Fargo , aptly dissected the recent behavior of many lenders: 'It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine.”
Wells Fargo Chairman Richard Kovacevich said that they will increase acquisitions this year, and the targets are likely to be larger than the banks bought recently. He also said “We are finding more assets at better values than we've seen in five years.”
Wells Fargo & Company has a market cap of $103.98 billion; its shares were traded at around $ 31.54Ă‚ with a P/E ratio of 13.24 and P/S ratio of 2.75. The dividend yield of Wells Fargo & Company stocks is 4.4%.
Carmax Inc (KMX) and GlaxoSmithKline plc (GSK)
These two stocks have less than 1% of position in Berkshire ’s Portfolio. They may be from the equity holdings of Geico, which is managed by Lou Simpson. GlaxoSmithKline plc (GSK) recently hit 52-week low as health-care stocks are sold off on Wall Street.
