Warren Buffett (Trades, Portfolio)'s $545.8 billion conglomerate, Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), disclosed its equity portfolio for the third quarter of 2020 on Monday.
With more than $140 billion to spend on stocks, the renowned guru and his two portfolio managers, Ted Weschler and Todd Combs, entered six new positions during the quarter, which were mainly biotech companies. In addition to the previously revealed stake in Snowflake Inc. (SNOW, Financial), Berkshire invested in AbbVie Inc. (ABBV, Financial), Merck & Co. Inc. (MRK, Financial), Bristol-Myers Squibb Co. (BMY, Financial), T-Mobile US Inc. (TMUS, Financial) and Pfizer Inc. (PFE, Financial).
As previously disclosed in July and August, the long-term investor also gradually added to the Bank of America Corp. (BAC, Financial) position and trimmed the Wells Fargo & Co. (WFC, Financial) stake by 42.1%. In September, the firm also revealed reductions to the Liberty Global PLC (LBTYA), Axalta Coating Systems Ltd. (AXTA) and DaVita Inc. (DVA) holdings as well as new positions Japanese companies Itochu Corp. (TSE:8001), Marubeni Corp. (TSE:8002), Mitsubishi Corp. (TSE:8058), Mitsui & Co. Ltd. (TSE:8031) and Sumitomo Corp. (TSE:8053).
Other notable trades for the quarter included reductions in the Apple Inc. (AAPL) and JPMorgan Chase & Co. (JPM) holdings and the divestment of long-held Costco Wholesale Corp. (COST).
Berkshire's largest holdings, accounting for over half of the portfolio, are Apple, Bank of America, The Coca-Cola Co. (KO), American Express Co. (AXP) and Kraft Heinz Co. (KHC).
The guru's $228.9 billion equity portfolio consisted of 49 stocks as of Sept. 30. A majority of the portfolio was invested in technology stocks at 49.93%, while the financial services sector has a weight of 27.10% and the consumer defensive space represents 13.29%.
Apple
In his largest transaction of the quarter, Buffett sold 36.3 million shares of Apple, impacting the equity portfolio by -1.64%. The stock traded for an average price of $109.02 per share on a split-adjusted basis during the quarter.
After the 3.7% reduction, he now holds 944.3 million shares, which represent 47.78% of the equity portfolio. GuruFocus estimates Buffett has gained 223.55% on the investment since the first quarter of 2016.
The Cupertino, California-based tech giant, which manufactures iPhones and Mac computers, has a $2.05 trillion market cap; its shares were trading around $120.3 on Monday with a price-earnings ratio of 36.89, a price-book ratio of 31.27 and a price-sales ratio of 7.7.
The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced.
Wells Fargo
Trimming the position by 46.38%, the Berkshire leader sold 10.17 million shares of Wells Fargo. The trade had an impact of -1.39% on the equity portfolio. Shares traded for an average price of $24.66 each during the quarter.
Buffett now holds 127.4 million shares, accounting for 1.31% of the equity portfolio. According to GuruFocus, he has gained an estimated 56.69% on the investment.
The bank, which is headquartered in San Francisco, has a market cap of $102.95 billion; its shares were trading around $24.90 on Monday with a price-earnings ratio of 63.71, a price-book ratio of 0.65 and a price-sales ratio of 1.39.
According to the Peter Lynch chart, the stock is overvalued.
JPMorgan Chase
Buffett dumped 21.2 million shares of JPMorgan, impacting the equity portfolio by -0.99%. The stock traded for an average per-share price of $98.20 during the quarter.
Following the significant 95.64% reduction, he now holds 967,267 shares, which represent 0.04% of the equity portfolio. GuruFocus data shows Buffett has lost approximately 11.66% on the investment since the third quarter of 2018.
The New York-based bank has a $357.55 billion market cap; its shares were trading around $117.30 on Monday with a price-earnings ratio of 15.34, a price-book ratio of 1.49 and a price-sales ratio of 3.07.
Based on the Peter Lynch chart, the stock appears to be fairly valued.
Bank of America
As previously reported, Buffett boosted the Bank of America stake by 9.2%, buying 85.09 million shares. The trade had an impact of 0.90% on the equity portfolio. During the quarter, the stock traded for an average price of $24.90 per share.
GuruFocus data shows he has gained 7.24% on the investment so far.
The bank, which is headquartered in Charlotte, North Carolina, has a market cap of $238.59 billion; its shares were trading around $27.58 on Monday with a price-earnings ratio of 13.66, a price-book ratio of 0.97 and a price-sales ratio of 2.79.
The Peter Lynch chart suggests the stock is undervalued.
AbbVie
Berkshire invested in 21.3 million shares of AbbVie, allocating 0.81% of the equity portfolio to the stake. The stock traded for an average price of $94.18 per share during the quarter.
The biopharmaceutical company based in Chicago has a $173.65 billion market cap; its shares were trading around $98.36 on Monday with a price-earnings ratio of 20.81, a price-book ratio of 11.38 and a price-sales ratio of 3.9.
According to the Peter Lynch chart, the stock is overvalued.
Merck
The guru picked up 22.4 million shares of Merck, dedicating 0.81% of the equity portfolio to the position. During the quarter, shares traded for an average price of $82.09 each.
Headquartered in Kenilworth, New Jersey, the pharmaceutical company has a market cap of $202.86 billion; its shares were trading around $80.18 on Monday with a price-earnings ratio of 17.75, a price-book ratio of 6.96 and a price-sales ratio of 4.32.
Based on the Peter Lynch chart, the stock appears to be overvalued.
Bristol-Myers Squibb
Berkshire purchased 29.9 million shares of Bristol-Myers Squibb, expanding the equity portfolio by 0.79%. Shares traded for an average price of $60.17 each during the quarter.
The New York-based pharmaceutical company has a $145.75 billion market cap; its shares were trading around $64.50 on Monday with a price-book ratio of 2.91 and a price-sales ratio of 3.6.
The Peter Lynch chart indicates the stock is overvalued.
Snowflake
As previously disclosed, the guru invested in 6.12 million shares of Snowflake, allocating 0.67% of the equity portfolio to the stake. The stock traded for an average per-share price of $238.10 during the quarter.
The tech company, which is headquartered in San Mateo, California, has a market cap of $66.92 billion; its shares were trading around $241.85 on Monday with a price-book ratio of 88.3 and a price-sales ratio of 195.82.
Since its initial public offering in September, the stock has fallen around 5%.
T-Mobile
Buffett bought 2.4million shares of T-Mobile, giving it 0.12% space in the equity portfolio. The stock traded for an average price of $110.82 per share during the quarter.
The Bellevue, Washington-based telecommunications company has a $159.68 billion market cap; its shares were trading around $128.65 on Monday with a price-earnings ratio of 42.04, a price-book ratio of 2.5 and a price-sales ratio of 2.29.
According to the Peter Lynch chart, the stock is overvalued.
Pfizer
Expanding the equity portfolio by 0.06%, the guru bought 3.7 million shares of Pfizer. During the quarter, shares traded for an average price of $36.91 each.
The pharmaceutical company, which is based in New York, has a market cap of $207.49 billion; its shares were trading around $37.33 on Monday with a price-earnings ratio of 24.08, a price-book ratio of 3.17 and a price-sales ratio of 4.3.
Based on the Peter Lynch chart, the stock appears to be overvalued.
Costco
Having held Costco for over a decade, the Oracle of Omaha dumped all 4.3 million shares in one fell swoop, impacting the equity portfolio by -0.65%. The stock traded for an average per-share price of $335.76 during the quarter.
According to GuruFocus, he gained 462.60% on the investment.
The Issaquah, Washington-based retailer, which operates a chain of warehouses that sells goods in bulk, has a $167.57 billion market cap; its shares were trading around $$379.79 on Monday with a price-earnings ratio of 42.11, a price-book ratio of 9.16 and a price-sales ratio of 1.
The Peter Lynch chart suggests the stock is overvalued.
Disclosure: No positions.
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