Warren Buffett's Berkshire Reveals 4th-Quarter Trades

The 'Oracle of Omaha's' conglomerate boosts Verizon and Chevron, cuts JPMorgan

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James Li
Feb 16, 2021
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Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) disclosed on Tuesday its fourth-quarter 2020 portfolio, revealing significant position boosts in Verizon Inc. (VZ, Financial), Chevron Corp. (CVX, Financial) and Marsh & McLennan Companies Inc. (MMC). The conglomerate also shuttered its holdings in JPMorgan Chase & Co. (JPM, Financial) and Barrick Gold Corp. (GOLD, Financial) and trimmed its position in Apple Inc. (AAPL, Financial) and Wells Fargo & Co. (WFC, Financial).

Verizon

Berkshire revealed that it owned 146,716,496 shares in Verizon (

VZ, Financial) as of December 2020, a stake valued at approximately $8.6 billion. The position vaulted into the conglomerate's sixth-largest holding with an equity-portfolio weight of 3.19%.

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Shares surged to approximately $55.57 after the market close; the stock is fairly valued based on Tuesday's price-to-GF-Value ratio of 0.97.

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The conglomerate noted in its third-quarter 2020 quarterly report filing that it had omitted "confidential information" and filed separately with the Securities and Exchange Commission. Berkshire said that the holding was valued between $5 billion and $10 billion. The conglomerate reported in the amended filing that it owned 58,347,767 shares as of the third quarter.

GuruFocus ranks the company's profitability 7 out of 10 on the back of operating margins outperforming over 80% of global competitors despite three-year earnings growth rates underperforming over 65% of global telecom companies.

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Chevron

Berkshire revealed that it owned 48,498,965 shares in Chevron (

CVX, Financial) as of the fourth quarter, up from the third-quarter holding of 44,272,770 shares. The shares, which averaged $81.13 during the fourth quarter, traded around $93.13 on Tuesday, showing that the stock is modestly overvalued based on a price-to-GF Value ratio of 1.21.

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GuruFocus ranks the San Ramon, California-based energy giant's financial strength 5 out of 10, driven by a solid Piotroski F-score of 5 despite a weak Altman Z-score of 0.77.

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Marsh & McLennan Companies

Berkshire revealed a holding of 4,267,825 shares in Marsh & McLennan (

MMC, Financial) as of the fourth quarter, up from the third-quarter holding of 3,366,507 shares. The shares averaged around $114.50 during the fourth quarter; the stock is fairly valued based on Tuesday's price-to-GF-Value ratio of 1.06.

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GuruFocus ranks the New York-based insurance company's profitability 8 out of 10 on the back of profit margins outperforming over 76% of global competitors and returns outperforming over 86% of global insurance companies.

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Sold out: JPMorgan Chase

Berkshire dumped the remainder of its JPMorgan Chase (

JPM, Financial) holding, selling 967,267 shares during the fourth quarter of 2020. The transaction comes following the sale of more than 30 million shares during the second quarter and more than 20 million shares during the third quarter.

The shares averaged $112.01 during the fourth quarter of 2020; based on GuruFocus estimates, Berkshire took an estimated loss of 11.74% on the stock since initially buying shares during the third quarter of 2018.

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GuruFocus ranks the New York-based bank's financial strength 3 out of 10 on the back of debt ratios underperforming over 64% of global competitors, suggesting high use of financial leverage.

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Barrick Gold

Berkshire sold 12 million shares of Barrick Gold (

GOLD, Financial), trimming the equity portfolio 0.14%. Shares averaged $25.29 during the fourth quarter; based on GuruFocus estimates, the conglomerate gained an estimated 7.17% on the stock since initially buying shares during the second quarter of 2020.

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GuruFocus ranks the Toronto-based gold producer's financial strength 6 out of 10: Although the company has a high Piotroski F-score of 7, interest coverage and debt ratios are underperforming over 60% of global competitors.

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Apple

Berkshire sold 57.16 million shares of Apple (

AAPL, Financial), trimming the position 6.05%. The transaction pared the equity portfolio 2.81% although shares of the Cupertino, California-based giant still remains the conglomerate's top holding with an 43.61% equity portfolio weight. Shares averaged $120.34 during the fourth quarter.

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GuruFocus ranks Apple's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and operating margins that outperform over 95% of global competitors. The website gave Apple the business predictability rank of 2.5 stars out of five.

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Wells Fargo

Berkshire sold 74,956,573 shares of Wells Fargo (

WFC, Financial), trimming the position 58.84%. Shares averaged $25.93 during the fourth quarter.

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GuruFocus ranks the San Francisco-based bank's financial strength 3 out of 10 on the back of debt ratios underperforming 73% of global competitors.

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Other key trades

Berkshire also revealed position boosts to its Merck & Co. (

MRK, Financial), AbbVie Inc. (ABBV) and T-Mobile US (TMUS) holdings. The conglomerate also axed its Pfizer Inc. (PFE), M&T Bank Corp. (MTB) and PNC Financial Services Group (PNC) positions during the quarter.

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Disclosure: Author is long Apple, Merck and Pfizer.

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I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!