(GuruFocus, August 4, 2009)Warren Buffett is going to report its quarterly result this coming Friday and the numbers are expected to be decent. Long time Buffett follower, Whitney Tilson wrote a letter to his investors saying that Berkshire's second-quarter earnings release "will be very good in many areas." Tilson believes the company will benefit from gains in its investment portfolio, a reversal in losses on its equity index put positions, the blockbuster performance of its Goldman Sachs warrants, solid investment income and good operating earnings from the insurance and utility divisions.
While GuruFocus does not any particular insight in Berkshire Hathaway’s operating business results from the insurance and utility division, we do have its complete 1Q09 equity portfolio tracked online.
Indeed as far as equity investment is concerned, he will do more than just fine for the quarter. Since the beginning of the quarter through August 3, 2008, the portfolio is up 31.84% on a total domestic investment of $40.87 billion, or 13 billion dollars. The reported equity gain number this Friday will differ from $13 billion for a number of reasons. One of the reasons is that it has been more than a month since the quarter ends, and market has climbed substantially since then;
another reason is we do not track Buffett’s international holdings; yet another reason is that the trading activity during the quarter are not included in this calculation.
On the other hand, GuruFocus users has the advantage of seeing how Warren Buffett’s portfolio perform in real time.
The following stocks account for the bulk of the increase. We include a brief survey of the top eight holdings that each contributed 1% or more (or about $400 million) to Warren Buffett’s equity portfolio.
1. Wells Fargo & Company (WFC, Financial)
Wells Fargo & Company 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 & Company has a market cap of $121.39 billion; its shares were traded at around $25.8 with a P/E ratio of 29 and P/S ratio of 2.3. The dividend yield of Wells Fargo & Company stocks is 0.8%. Wells Fargo & Company had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Wells Fargo & Company the business predictability rank of 4-star.
WFC accounts for 10.54% of Berkshire’s domestic equity portfolio. It has gone up 81.20% since March 31, 2009, contributing 8.56% gain (or $3.498 billion) to the overall portfolio.
2. American Express Company (AXP, Financial)
American Express Company is primarily engaged in the business of providing international credit card and banking services. American Express Company has a market cap of $33.45 billion; its shares were traded at around $28.65 with a P/E ratio of 21.1 and P/S ratio of 1.2. The dividend yield of American Express Company stocks is 2.5%. American Express Company had an annual average earning growth of 1.3% over the past 10 years.
AXP accounts for 5.08% of Berkshire’s domestic equity portfolio. It has gone up 110.20% since March 31, 2009, contributing 5.58% gain (or $2.279 billion) to the overall portfolio.
3. Burlington North Santa Fe (BNI, Financial)
Burlington North/Santa Fe through its subsidiary The Burlington Northern and Santa Fe Railway Company operates one of the largest railroad networks in North America. This vast network covers the western two-thirds of the United States stretching from major Pacific Northwest and Southern California ports to the Midwest Southeast and Southwest and from the Gulf of Mexico to Canada. Burlington Northern Santa Fe Corp. has a market cap of $27.44 billion; its shares were traded at around $80.8 with a P/E ratio of 14.1 and P/S ratio of 1.5. The dividend yield of Burlington Northern Santa Fe Corp. stocks is 2%. Burlington Northern Santa Fe Corp. had an annual average earning growth of 8.1% over the past 10 years. GuruFocus rated Burlington Northern Santa Fe Corp. the business predictability rank of 2.5-star.
BNI accounts for 11.30% of Berkshire’s domestic equity portfolio. It has gone up 34.30% since March 31, 2009, contributing 3.88% gain (or $1.584 billion) to the overall portfolio.
4. The Coca-Cola Company (KO, Financial)
The Coca-Cola Company is the world's largest beverage company and is the leading producer and marketer of soft drinks. Along with Coca-Cola recognized as the world's best-known brand The Coca-Cola Company markets four of the world's top five soft drink brands including diet Coke Fanta and Sprite. Through the world's largest distribution system consumers in nearly 200 countries enjoy The Coca-Cola Company's products at a rate of more than 1 billion servings each day. The CocaCola Company has a market cap of $114.82 billion; its shares were traded at around $49.6 with a P/E ratio of 16.3 and P/S ratio of 3.6. The dividend yield of The CocaCola Company stocks is 3.3%. The CocaCola Company had an annual average earning growth of 5.3% over the past 10 years. GuruFocus rated The CocaCola Company the business predictability rank of 2-star.
KO accounts for 21.51% of Berkshire’s domestic equity portfolio. It has gone up 12.90% since March 31, 2009, contributing 2.77% gain (or $1.134 billion) to the overall portfolio.
5. The Procter & Gamble Company (PG, Financial)
The Procter & Gamble Company manufactures and markets a broad range of consumer products in many countries throughout the world. Products fall into five business segments: fabric and home care paper beauty care health care and food and beverage. Today P&G markets more than 250 products to more than five billion consumers in 130 countries. The Procter & Gamble Company has a market cap of $162.09 billion; its shares were traded at around $55.61 with a P/E ratio of 15.4 and P/S ratio of 1.9. The dividend yield of The Procter & Gamble Company stocks is 3.2%. The Procter & Gamble Company had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated The Procter & Gamble Company the business predictability rank of 3-star.
PG accounts for 11.10% of Berkshire’s domestic equity portfolio. It has gone up 18.10% since March 31, 2009, contributing 2.01% gain (or $821 million) to the overall portfolio.
6. Kraft Foods Inc.(KFT, Financial)
Kraft Foods Inc. is the largest branded food and beverage company headquartered in the U.S. and the second largest in the world. Brands include Kraft Nabisco Oscar Mayer Post Maxwell House Philadelphia and Jacobs. Kraft Foods Inc. has a market cap of $41.53 billion; its shares were traded at around $28.2 with a P/E ratio of 14.8 and P/S ratio of 1. The dividend yield of Kraft Foods Inc. stocks is 4.1%.
KFT accounts for 7.54% of Berkshire’s domestic equity portfolio. It has gone up 26.50% since March 31, 2009, contributing 2.00% gain (or $817 million) to the overall portfolio.
7. U.S. Bancorp (USB, Financial)
U.S. Bancorp is a financial services holding company. U.S. Bancorp has a market cap of $39.6 billion; its shares were traded at around $20.87 with a P/E ratio of 25.1 and P/S ratio of 2.1. The dividend yield of U.S. Bancorp stocks is 1%. U.S. Bancorp had an annual average earning growth of 13.4% over the past 10 years. GuruFocus rated U.S. Bancorp the business predictability rank of 3.5-star.
USB accounts for 2.47% of Berkshire’s domestic equity portfolio. It has gone up 42.80% since March 31, 2009, contributing 1.06% gain (or $432 million) to the overall portfolio.
8. ConocoPhillips (COP, Financial)
ConocoPhillips is a major international integrated energy company with operations in some 49 countries. ConocoPhillips has a market cap of $66.66 billion; its shares were traded at around $44.99 with a P/E ratio of 7.4 and P/S ratio of 0.3. The dividend yield of ConocoPhillips stocks is 4.2%. ConocoPhillips had an annual average earning growth of 19% over the past 10 years.
COP accounts for 6.82% of Berkshire’s domestic equity portfolio. It has gone up 14.90% since March 31, 2009, contributing 1.02% gain (or $415 million) to the overall portfolio.
Conclusion
Warren Buffett likes to defy conventional wisdom of diversification. In 2Q09, he concentrated more than three quarters of his domestic equity in eight stocks and the strategy once again paid off.
So what stock did Warren Buffett buy during the 2Q09? GuruFocus is hosting a contest allowing users to name the stocks that Warren Buffett bought during the quarter. To participate, click here.
GuruFocus provides stock holding and trading activities, and investment insights of Investment Gurus such as Warren Buffett, more information is available to Premium Member. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.Ă‚
While GuruFocus does not any particular insight in Berkshire Hathaway’s operating business results from the insurance and utility division, we do have its complete 1Q09 equity portfolio tracked online.
Indeed as far as equity investment is concerned, he will do more than just fine for the quarter. Since the beginning of the quarter through August 3, 2008, the portfolio is up 31.84% on a total domestic investment of $40.87 billion, or 13 billion dollars. The reported equity gain number this Friday will differ from $13 billion for a number of reasons. One of the reasons is that it has been more than a month since the quarter ends, and market has climbed substantially since then;
another reason is we do not track Buffett’s international holdings; yet another reason is that the trading activity during the quarter are not included in this calculation.
On the other hand, GuruFocus users has the advantage of seeing how Warren Buffett’s portfolio perform in real time.
The following stocks account for the bulk of the increase. We include a brief survey of the top eight holdings that each contributed 1% or more (or about $400 million) to Warren Buffett’s equity portfolio.
| Ticker | P/E | Yield (%) | Market Cap ($M) | Price Change Since 1Q09(%) | 1Q09 Weighting | Contribution to Portfolio Gain | Gain ($M) |
|---|---|---|---|---|---|---|---|
| WFC | 29 | 0.8 | 121387 | 81.20% | 10.54% | 8.56% | 3,498 |
| AXP | 21.1 | 2.5 | 33452.4 | 110.20% | 5.06% | 5.58% | 2,279 |
| BNI | 14.1 | 2 | 27436.3 | 34.30% | 11.30% | 3.88% | 1,584 |
| KO | 16.3 | 3.3 | 114824 | 12.90% | 21.51% | 2.77% | 1,134 |
| PG | 15.4 | 3.2 | 162086 | 18.10% | 11.10% | 2.01% | 821 |
| KFT | 14.8 | 4.1 | 41531.3 | 26.50% | 7.54% | 2.00% | 817 |
| USB | 25.1 | 1 | 39602.6 | 42.80% | 2.47% | 1.06% | 432 |
| COP | 7.4 | 4.2 | 66655.1 | 14.90% | 6.82% | 1.02% | 415 |
| Total top 8 | 76.34% | 26.87% | 10,980 | ||||
| Total Portfolio | 100% | 31.84% | 13,015 |
1. Wells Fargo & Company (WFC, Financial)
Wells Fargo & Company 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 & Company has a market cap of $121.39 billion; its shares were traded at around $25.8 with a P/E ratio of 29 and P/S ratio of 2.3. The dividend yield of Wells Fargo & Company stocks is 0.8%. Wells Fargo & Company had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Wells Fargo & Company the business predictability rank of 4-star.
WFC accounts for 10.54% of Berkshire’s domestic equity portfolio. It has gone up 81.20% since March 31, 2009, contributing 8.56% gain (or $3.498 billion) to the overall portfolio.
2. American Express Company (AXP, Financial)
American Express Company is primarily engaged in the business of providing international credit card and banking services. American Express Company has a market cap of $33.45 billion; its shares were traded at around $28.65 with a P/E ratio of 21.1 and P/S ratio of 1.2. The dividend yield of American Express Company stocks is 2.5%. American Express Company had an annual average earning growth of 1.3% over the past 10 years.
AXP accounts for 5.08% of Berkshire’s domestic equity portfolio. It has gone up 110.20% since March 31, 2009, contributing 5.58% gain (or $2.279 billion) to the overall portfolio.
3. Burlington North Santa Fe (BNI, Financial)
Burlington North/Santa Fe through its subsidiary The Burlington Northern and Santa Fe Railway Company operates one of the largest railroad networks in North America. This vast network covers the western two-thirds of the United States stretching from major Pacific Northwest and Southern California ports to the Midwest Southeast and Southwest and from the Gulf of Mexico to Canada. Burlington Northern Santa Fe Corp. has a market cap of $27.44 billion; its shares were traded at around $80.8 with a P/E ratio of 14.1 and P/S ratio of 1.5. The dividend yield of Burlington Northern Santa Fe Corp. stocks is 2%. Burlington Northern Santa Fe Corp. had an annual average earning growth of 8.1% over the past 10 years. GuruFocus rated Burlington Northern Santa Fe Corp. the business predictability rank of 2.5-star.
BNI accounts for 11.30% of Berkshire’s domestic equity portfolio. It has gone up 34.30% since March 31, 2009, contributing 3.88% gain (or $1.584 billion) to the overall portfolio.
4. The Coca-Cola Company (KO, Financial)
The Coca-Cola Company is the world's largest beverage company and is the leading producer and marketer of soft drinks. Along with Coca-Cola recognized as the world's best-known brand The Coca-Cola Company markets four of the world's top five soft drink brands including diet Coke Fanta and Sprite. Through the world's largest distribution system consumers in nearly 200 countries enjoy The Coca-Cola Company's products at a rate of more than 1 billion servings each day. The CocaCola Company has a market cap of $114.82 billion; its shares were traded at around $49.6 with a P/E ratio of 16.3 and P/S ratio of 3.6. The dividend yield of The CocaCola Company stocks is 3.3%. The CocaCola Company had an annual average earning growth of 5.3% over the past 10 years. GuruFocus rated The CocaCola Company the business predictability rank of 2-star.
KO accounts for 21.51% of Berkshire’s domestic equity portfolio. It has gone up 12.90% since March 31, 2009, contributing 2.77% gain (or $1.134 billion) to the overall portfolio.
5. The Procter & Gamble Company (PG, Financial)
The Procter & Gamble Company manufactures and markets a broad range of consumer products in many countries throughout the world. Products fall into five business segments: fabric and home care paper beauty care health care and food and beverage. Today P&G markets more than 250 products to more than five billion consumers in 130 countries. The Procter & Gamble Company has a market cap of $162.09 billion; its shares were traded at around $55.61 with a P/E ratio of 15.4 and P/S ratio of 1.9. The dividend yield of The Procter & Gamble Company stocks is 3.2%. The Procter & Gamble Company had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated The Procter & Gamble Company the business predictability rank of 3-star.
PG accounts for 11.10% of Berkshire’s domestic equity portfolio. It has gone up 18.10% since March 31, 2009, contributing 2.01% gain (or $821 million) to the overall portfolio.
6. Kraft Foods Inc.(KFT, Financial)
Kraft Foods Inc. is the largest branded food and beverage company headquartered in the U.S. and the second largest in the world. Brands include Kraft Nabisco Oscar Mayer Post Maxwell House Philadelphia and Jacobs. Kraft Foods Inc. has a market cap of $41.53 billion; its shares were traded at around $28.2 with a P/E ratio of 14.8 and P/S ratio of 1. The dividend yield of Kraft Foods Inc. stocks is 4.1%.
KFT accounts for 7.54% of Berkshire’s domestic equity portfolio. It has gone up 26.50% since March 31, 2009, contributing 2.00% gain (or $817 million) to the overall portfolio.
7. U.S. Bancorp (USB, Financial)
U.S. Bancorp is a financial services holding company. U.S. Bancorp has a market cap of $39.6 billion; its shares were traded at around $20.87 with a P/E ratio of 25.1 and P/S ratio of 2.1. The dividend yield of U.S. Bancorp stocks is 1%. U.S. Bancorp had an annual average earning growth of 13.4% over the past 10 years. GuruFocus rated U.S. Bancorp the business predictability rank of 3.5-star.
USB accounts for 2.47% of Berkshire’s domestic equity portfolio. It has gone up 42.80% since March 31, 2009, contributing 1.06% gain (or $432 million) to the overall portfolio.
8. ConocoPhillips (COP, Financial)
ConocoPhillips is a major international integrated energy company with operations in some 49 countries. ConocoPhillips has a market cap of $66.66 billion; its shares were traded at around $44.99 with a P/E ratio of 7.4 and P/S ratio of 0.3. The dividend yield of ConocoPhillips stocks is 4.2%. ConocoPhillips had an annual average earning growth of 19% over the past 10 years.
COP accounts for 6.82% of Berkshire’s domestic equity portfolio. It has gone up 14.90% since March 31, 2009, contributing 1.02% gain (or $415 million) to the overall portfolio.
Conclusion
Warren Buffett likes to defy conventional wisdom of diversification. In 2Q09, he concentrated more than three quarters of his domestic equity in eight stocks and the strategy once again paid off.
So what stock did Warren Buffett buy during the 2Q09? GuruFocus is hosting a contest allowing users to name the stocks that Warren Buffett bought during the quarter. To participate, click here.
GuruFocus provides stock holding and trading activities, and investment insights of Investment Gurus such as Warren Buffett, more information is available to Premium Member. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.Ă‚
