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A look at Warren Buffet and Berkshire Hathaway’s Top Five Holdings

Monica Wolfe

Monica Wolfe

133 followers

As Berkshire Hathaway (BRK.A)(BRK.B) stock trades past $200,000 a share, it reported its second quarter portfolio. Warren Buffett (Trades, Portfolio) and his CIOs added to Charter Communications (CHTR), IBM (IBM), Verizon Communications (VZ), Suncor Energy (SU), USG Corp (USG), and Liberty Global (LBTYA). The fund managers sold Graham Holdings (GHC), DirecTV (DTV), ConocoPhillips (COP), Phillips 66 (PSX), Liberty Media Corporation (LMCA), National Oilwell Varco (NOV) and Starz (STRZA) during the 3-months ended June 30.

As of the close of the second quarter, Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway owned 46 stocks for a total value of $107.6 billion. The following five stocks are the top five holdings as of June 30, 2014.

Wells Fargo & Co. (WFC)

Buffett and his fund’s largest holding is in Wells Fargo where he holds on to a massive 463,458,123 shares of the company’s stock. This position makes up for 22.6% of Berkshire’s total assets managed as well as 8.80% of the company’s shares outstanding.

Berkshire Hathaway did not alter their position over the past quarter. The last move they made in the company was in the fourth quarter of 2013, and since then the price per share has increased approximately 19.3%.

Buffett’s historical holding history:

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Wells Fargo is a financial holding company and a bank holding company. The company provides financial services through subsidiaries engaged in various businesses, mainly: wholesale banking, mortgage banking, consumer finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment.

Wells Fargo’s historical revenue and net income:

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The analysis on Wells Fargo reports that the company’s revenue per share has been in decline over the past five years, its operating margin is expanding, its dividend yield is near a 3-year high and its price is near a 10-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Wells Fargo has a market cap of $268.96 billion. Its shares are currently trading at around $51.52 with a P/E ratio of 12.80, a P/S ratio of 3.30 and a P/B ratio of 1.70. The dividend yield of Wells stocks is 2.50%, and the company had an annual average earnings growth of 4.60% over the past ten years.

Coca-Cola (KO)

Buffett’s second largest holding is in Coca-Cola where he holds on to 400,000,000 shares of the company’s stock. This position represents 15.8% of his total portfolio holdings as well as 9.10% of the company’s shares outstanding.

Buffett has not altered his position in Coke since he bought into the company years ago. The company has increased its price per share by 2.4% from the estimated average second quarter price of $40.55 per share.

Buffett’s holding history as of the close of Q2:

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Coca-Cola is a beverage company. It owns or license and market more than 500 nonalcoholic beverage brands, mainly 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.

Coca-Cola’s historical revenue and net income:

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The analysis on Coca-Cola reports that the company’s revenue per share has slowed down over the past year, its price is sitting near a 10-year high and it has issued $14.3 billion of debt over the past three years, but overall its debt level is acceptable.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Coca-Cola has a market cap of $182.32 billion. Its shares are currently trading at around $41.57 with a P/E ratio of 22.30, a P/S ratio of 4.03 and a P/B ratio of 5.40. The company has a dividend yield of 2.40% and has seen an annual average earnings growth of 10% over the past ten years.

GuruFocus rated Coca-Cola the business predictability rank of 10% over the past ten years.

American Express (AXP)

Berkshire Hathaway’s third largest position is in American Express where it holds on to 151,610,700 shares of the company’s stock. This position makes up for 13.4% of its total portfolio as well as 14.32% of American Express’s shares outstanding.

The fund did not alter its holding in American Express over the past quarter, but the price per share is down about -0.7% from the estimated average second quarter price of $90.07 per share.

Berkshire Hathaway’s historical holding history:

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American Express together with its subsidiaries is a global service company that provides customers with access to products, insights and experiences that enrich lives and build business success.

American Express’s historical revenue and net income:

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American Express has a market cap of $93.73 billion. Its shares are currently trading at around $89.56 with a P/E ratio of 17.10 and a P/S ratio of 2.80. The company had an annual average earnings growth of 6.90% over the past ten years.

GuruFocus rated American Express the business predictability rank of 2-star.

International Business Machines (IBM)

The guru’s fourth largest holding is in IBM where he maintains 70,173,978 shares of the company’s stock. This position makes up for 11.8% of Berkshire’s total portfolio as well as 6.93% of IBM’s shares outstanding.

Over the past quarter Berkshire Hathaway upped its holdings 2.66% by purchasing 1,818,894 shares of the company’s stock. The fund added these shares in the quarterly price range of $180.37 to $197.77, with an estimated average quarterly price of $188.37. Since then the price per share has increased approximately 2.5%.

Berkshire Hathaway’s historical holding history as of Q2:

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IBM’s historical revenue and net income:

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The analysis on IBM reports that the company’s operating margin is expanding, its price is near a 1-year high and it has issued $17.2 billion of debt over the past three years. The analysis also notes that the company’s dividend yield is near a 5-year high and its revenue per share has been in decline over the past year.

The Peter Lynch Chart suggests that the company is currently undervalued:

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International Business Machines has a market cap of $192.65 billion. Its shares are currently trading at around $193.11 with a P/E ratio of 12.10 and a P/S ratio of 2.10. The company had an annual average earnings growth of 10.60% over the past ten years.

GuruFocus rated IBM the business predictability rank of 4.5-star.

Wal-Mart Stores (WMT)

Warren Buffett (Trades, Portfolio)’s fifth largest holding goes to Wal-Mart where he maintains 58,797,259 shares of the company’s stock. This position makes up for 4.1% of his total portfolio as well as 1.82% of the company’s shares outstanding.

Over the past quarter Berkshire upped their holdings 1.28% by adding a total of 744,847 shares to this position. The portfolio managers added these shares in the second quarter price range of $74.91 to $79.76, with an estimated average quarterly price of $77.10 per share. Since then the price per share has fallen approximately -1.9%.

Berkshire Hathaway’s holding history as of the close of the second quarter:

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Wal-Mart Stores operates retail stores located throughout the U.S and through operations and subsidiaries worldwide. Its operations comprise three reportable business segments: Walmart U.S., Walmart International and Sam's Club.

Wal-Mart’s historical revenue and net income:

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The analysis on Wal-Mart reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding and its price is near a 10-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Wal-Mart has a market cap of $243.77 billion. Its shares are currently trading at around $75.62 with a P/E ratio of 15.60 and a P/S ratio of 0.50. The dividend yield of Wal-Mart is at 2.50%. Wal-Mart had an annual average earnings growth of 9.30% over the past ten years.

GuruFocus rated Wal-Mart the business predictability rank of 4.5-star.

Check out Berkshire Hathaway’s full second quarter portfolio here.

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