Warren Buffett invests mainly in U.S. companies through his own company, Berkshire Hathway (NYSE:BRK.A)(NYSE:BRK.B), but he has several large international stakes as well. These holdings are not updated as often because the companies do not report to the SEC, and information about them is usually only available when Buffett volunteers it in his famous annual letters. Though his recent buy and sell information on the stocks is not available, it is still possible to review the businesses and stock performance in the ailing global economy as almost a year has passed since Buffett’s last update.
Munich Re (XTER:MUV2)
Buffett holds 20,060,390 shares of Munich Re as of Dec. 31, 2012, giving him 11.3% ownership of the company. He paid US$2.99 billion for the position when he bought it. At Tuesday’s closing share price of €159.60, the stake’s total value is US$4.37 billion, for a gain of 46% on the investment. This marks an approximate 21.4% increase in value from the US$3.599 billion value it held at Dec. 31, 2012, according to Buffett’s letter.
German reinsurer Munich Re began a good year with few catastrophe losses, but a lower year-over-year result in the second quarter when floods hit Germany, along with above-average major losses. Third-quarter profit also failed to beat the previous year, at €636 million compared to €1.14 billion. But the company for the first nine months remained on track to achieve its 2013 goal of $3 billion in profit.
Munich Re also announced an up to €1.4 billion share buyback program to be complete before April 30, 2014.
In the third quarter, it produced $638 million in free cash flow, a return on equity of 10% and return on assets of 0.8%. Its dividend yield is currently near a five-year low at 3.23%, while its share trade with a P/E of 10.9, P/B of 1.1 and P/S of 0.47, which is near a three-year high.
Munich Re’s 10-year revenue and earnings history:
Buffett holds 3,947,555 Posco shares as of Dec. 31, 2012, or about 5.1% of the company. The South Korean company is priced at 332,500 Korean won per share, for a total value of $US1.24 billion. This represents an approximate 4.4% decline from his year-end value of $1.295 billion stated in his letter, against the benchmark Kospi index’s 0.41% year-to-date gain.
Posco is a global steel company based in Korea. In the third quarter, the company’s profit dropped for the second consecutive quarter, by 22% over last year’s third quarter to 567 billion won. This forced the company to reduce its full-year sales estimate to 63 trillion won ($59.4 billion) from the 64 trillion won it predicted in July. The weakness in earnings resulted from reduction in demand from China, the world’s largest steel consumer, and slowdown in Europe.
The company’s sales also declined 3.7% to 632.8 billion won, and operating margins shrank to 4.2% from 6.5% the previous year. Posco’s average selling price declined 12% year-over-year to 773,000 won a metric ton.
Posco 10-year revenue and earnings history:
Posco currently trades with a P/E of 16.2, P/S of 0.1 and P/B of 0.47%, which is near a three-year low.
Buffett holds 25,848,838 shares of Sanofi as of Dec. 31, 2012, representing 2% of the company, which was worth $2.073 billion at the time of his purchase. The total value as of Tuesday is $2.67 billion, 29% higher than his $2.073 billion original purchase price and 9.4% higher than the $2.44 billion year-end value of the holding.
Sanofi is a France-based diversified health care company. For the first nine months of the year, the company reported an 25.6% year-over-year decline in net income to €4.88 billion, 7.3% decline in sales to €24.5 billion, with third quarter sales increasing for the first time in five consecutive quarters. Sanofi also announced that the worst of the patent cliff had ended in the third quarter, and it is expecting a return to growth in the fourth quarter.
Sanofi’s 10-year sales and earnings history:
The company’s share price is near a five-year high, with a P/E of 32.8 and P/S of 3.04, near a five-year high.