Warren Buffett (Trades, Portfolio)'s $506.23 billion conglomerate, Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), disclosed its equity portfolio for the second quarter of 2020 on Friday.
Despite having more than $130 billion to spend on stocks, the renowned guru and his two portfolio managers, Ted Weschler and Todd Combs, only entered one new position during the three months ended June 30, which, surprisingly, was Barrick Gold Corp. (GOLD, Financial). Other major trades for the quarter included reductions of the long-held JPMorgan Chase & Co. (JPM, Financial) and Wells Fargo & Co. (WFC, Financial) stakes. They also completely sold out of Goldman Sachs Group Inc. (GS, Financial) as the U.S. economy reeled from the effects of the Covid-19 lockdowns.
As previously disclosed in April, the long-term investors exited the positions in major airlines Delta (DAL, Financial), Southwest (LUV, Financial), United (UAL, Financial) and American (AAL, Financial) during the quarter as well.
Buffett also previously shared he boosted the insurance conglomerate's stake in Liberty SiriusXM Group (LSXMK, Financial) by around 7.57% during the quarter. Other positions he added to were STORE Capital Corp. (STOR), The Kroger Co. (KR) and Suncor Energy Inc. (SU). The firm also trimmed or completely sold out of a slew of other holdings, including PNC Financial Services Group Inc. (PNC), Sirius XM Holdings Inc. (SIRI) and Restaurant Brands International Inc. (QSR).
More recently, Buffett began expanding his Bank of America Corp. (BAC) position in July. He now holds an 11.92% stake in the Charlotte, North Carolina-based bank, which is valued at around $28.2 billion and was his second-largest position as of the end of the quarter. His largest holdings, accounting for over half of the portfolio, also include Apple Inc. (AAPL), The Coca-Cola Co. (KO), American Express Co. (AXP) and The Kraft Heinz Co. (KHC).
The guru's $202.41 billion equity portfolio consisted of 44 stocks as of June 30. A majority of the portfolio was invested in technology stocks at 45.76%, while the financial services sector has a weight of 31.72% and the consumer defensive space represents 15.01%.
Barrick Gold
Like with airlines and technology, Buffett's move into gold is in contrast with his past statements cautioning against investing in the commodity because it has "no utility." Gold miners, however, are currently benefitting from rising bullion prices, which are widening profit margins and stabilizing production costs. As such, Berkshire invested in 20.9 million shares of Barrick Gold, allocating 0.28% of the equity portfolio to the stake. The stock traded for an average price of $24.86 per share during the quarter.
The Canadian mining company, which produces gold and copper, has a $47.94 billion market cap; its shares were trading around $26.99 on Friday with a price-earnings ratio of 10.69, a price-book ratio of 2.14 and a price-sales ratio of 4.14.
The Peter Lynch chart shows the stock is trading below its fair value, suggesting undervaluation.
JPMorgan Chase
In his largest transaction of the quarter, Buffett sold 35.5 million shares of JPMorgan, impacting the equity portfolio by -1.82%. Shares traded for an average price of $94.84 each during the quarter.
After the 61.52% reduction, he now holds 22.2 million shares, which represent 1.03% of the equity portfolio. GuruFocus estimates Buffett has lost 10.53% on the investment since the third quarter of 2018.
The bank, which is headquartered in New York, has a market cap of $312.11 billion; its shares were trading around $102.41 on Friday with a price-earnings ratio of 13.83, a price-book ratio of 1.33 and a price-sales ratio of 2.71.
According to the Peter Lynch chart, the stock is undervalued.
Wells Fargo
Trimming the position by 26.49%, the Berkshire leader sold 85.6 million shares of Wells Fargo. The trade had an impact of 1.4% on the equity portfolio. The stock traded for an average per-share price of $27.42 during the quarter.
Buffett now holds 237.5 million shares, accounting for 3% of the equity portfolio. According to GuruFocus, he has gained an estimated 57.24% on the investment.
The San Francisco-based bank has a $104.24 billion market cap; its shares were trading around $25.30 on Friday with a price-earnings ratio of 29.1, a price-book ratio of 0.65 and a price-sales ratio of 1.36.
Based on the Peter Lynch chart, the stock appears to be overvalued.
Goldman Sachs
After slashing the Goldman Sachs stake by 84% last quarter, Buffett pulled the trigger and divested of the remaining 1.9 million shares. The trade had an impact of -0.17% on the equity portfolio. During the quarter, the stock traded for an average price of $187.05 per share.
GuruFocus data shows he gained 10.62% on the investment.
The investment bank based in New York has a market cap of $71.56 billion; its shares were trading around $207.97 on Friday with a price-earnings ratio of 15.84, a price-book ratio of 0.91 and a price-sales ratio of 2.07.
The Peter Lynch chart suggests the stock is trading near its fair value.
See Buffett's full portfolio here.
Disclosure: No positions.
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