On Tuesday, Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) disclosed its 13F portfolio updates for the fourth quarter of 2022, which ended on Dec. 31.
The Oracle of Omaha did not report any new buys for the quarter, but did add to existing positions in Louisiana-Pacific Corp. (LPX, Financial), Apple Inc. (AAPL, Financial) and Paramount Global (PARA, Financial).
Berkshire also reduced its holdings in Taiwan Semiconductor Manufacturing Co Ltd (TSM, Financial), U.S. Bancorp (USB, Financial), Bank of New York Mellon Corp. (BK, Financial), Activision Blizzard Inc. (ATVI, Financial), Chevron Corp. (CVX, Financial), McKesson Corp. (MCK, Financial), Ally Financial Inc. (ALLY, Financial) and The Kroger Co. (KR, Financial). Most of these reductions were significant, but the sales of Ally Financial and Kroger stock represented tiny adjustments of less than 1%.
As of the quarter’s end, Berkshire’s largest holding, accounting for 41.76% of the equity portfolio, was Apple Inc. (AAPL, Financial). The rest of its top five holdings were Bank of America Corp. (BAC, Financial) with a 10.30% portfolio weight, Chevron Corp. (CVX, Financial) with 8.02%, Coca-Cola Co. (KO, Financial) with 7.57% and American Express Co. (AXP, Financial) with 6.91%.
The guru’s $296.10 billion 13F portfolio consisted of 49 stocks as of Dec. 31, 2022. By portfolio weight, the guru was most invested in technology stocks, which account for 45.16% of the portfolio (mostly Apple), followed by the financial services sector with a weight of 24.01% and the energy space with 12.05%.
Investors should be aware that 13F reports do not provide a complete picture of a guru’s holdings. They include only a snapshot of long equity positions in U.S.-listed stocks and American depository receipts as of the quarter’s end. They do not include short positions, non-ADR international holdings or other types of securities. However, even this limited filing can provide valuable information.
Louisiana-Pacific Corp
Buffett’s firm increased its investment in Louisiana-Pacific Corp. (LPX, Financial) by 21.55% for a total of 7,044,909 shares. At the quarter’s average share price of $58.96, the trade added 0.02% to the equity portfolio.
Shares of the American building materials manufacturer traded around $66.65 on Feb. 14 for a market cap of $4.78 billion and a price-earnings ratio of 4.28. The GF Value chart rates the stock as modestly undervalued, though according to the future GF Value based on Morningstar (MORN, Financial) analysts’ estimates, the stock could be closer to fairly valued.
Apple Inc.
Berkshire added more shares of its top holding Apple Inc. (AAPL, Financial), increasing the stake by 0.04% and adding 0.01% to the holding’s equity portfolio weight at the quarter’s average share price of $142.91.
On Feb. 14, consumer electronics giant Apple’s shares traded around $153.20 for a market cap of $2.42 trillion and a price-earnings ratio of 26.01. Despite worries about an economic slowdown in the U.S., Apple is still going strong, achieving a three-year earnings per share growth rate of 27.2%.
Paramount Global
Berkshire upped its stake in Paramount Global (PARA, Financial) by 16.32% for a total holding worth 91,216,510 shares. The trade added 0.01% to the equity portfolio at the quarter’s average share price of $24.01.
On Tuesday, the media and entertainment conglomerate traded around $22.45 per share for a market cap of $14.71 billion and a price-earnings ratio of 4.76. The company has a solid GF Score of 90 out of 100, driven by high ranks for profitability, growth and GF Value despite weak financial strength and momentum. Overall, this GF Score indicates the potential for outperformance based on a historical study by GuruFocus.
Taiwan Semiconductor Manufacturing Co Ltd
The Oracle of Omaha slashed his firm’s investment in Taiwan Semiconductor Manufacturing Co Ltd (TSM, Financial) by 86.19% to 8,292,724 shares after having just initiated the position in the previous quarter. At the quarter’s average share price of $72.34, this shaved 1.20% off the equity portfolio.
The Taiwan-based chip foundry, which is the world’s largest company of its kind with a 57% market share as per Gartner, traded around $97.96 per share on Tuesday for a market cap of $508.02 billion and a price-earnings ratio of 15.05. The GF Value chart rates the stock as modestly undervalued.
U.S. Bancorp
The firm continued cutting its U.S. Bancorp (USB, Financial) holding, reducing it by 91.42% to 6,670,835 shares. The trade slimmed the equity portfolio by 0.97%. During the quarter, shares traded for an average price of $42.80.
A major U.S. banking institution with a focus on consumer banking, U.S. Bancorp traded around $49.13 per share on Feb. 14 for a market cap of $75.22 billion and a price-earnings ratio of 13.24. It held up surprisingly well in the financial crisis, but nowadays it has over 50% credit portfolio exposure to commercial real estate.
Bank of New York Mellon Corp
The guru also sold 59.7% of his Bank of New York Mellon Corp. (BK, Financial) stake for a remaining holding of 25,069,867 shares, slimming the equity portfolio by 0.48%. Shares traded for an average price of $42.89 during the quarter.
The corporate investment banking company that styles itself the “bank of banks” traded around $51.71 per share on Feb. 14 for a market cap of $41.80 billion and a price-earnings ratio of 17.83. The price-book ratio of 1.16 is near the company’s historical median but above the industry median of 0.95.
Activision Blizzard Inc.
Berkshire trimmed its Activision Blizzard Inc. (ATVI, Financial) position by 12.35%, leaving a remaining stake of 52,717,075 shares and reducing the equity portfolio by 0.19%. During the quarter, shares traded for an average price of $74.26.
The American video game company, which Microsoft (MSFT, Financial) has made a deal to acquire for $68.7 billion in cash, traded around $76.80 per share on Tuesday for a market cap of $60.08 billion and a price-earnings ratio of 39.99. If the acquisition goes through at the agreed price, investors could pocket a decent profit.
Chevron Corp
Buffett’s firm made a slight 1.44% reduction to its Chevron Corp. (CVX, Financial) holding (which is notable only because Berkshire still owns 8.43% of the company's shares outstanding), leaving a position worth 162,975,771 shares after bulking up in the beginning of the year. The trade slimmed the equity portfolio by 0.12% at the quarter’s average share price of $174.51.
The American multinational oil and gas giant traded around $172.32 on Tuesday for a market cap of $333.20 billion and a price-earnings ratio of 9.43. The tight energy market pushed Chevron’s earnings to record levels in 2022.
McKesson Corp
Berkshire slimmed its investment in McKesson Corp. (MCK, Financial) by 10.72% for a remaining stake of 2,855,514 shares. The trade took 0.04% off the equity portfolio. Shares traded for an average price of $372.97 during the quarter.
The wholesale medical supplies and information technology company traded around $365.85 per share on Feb. 14 for a market cap of $50.10 billion and a price-earnings ratio of 16.77. The Peter Lynch chart shows the stock trading slightly above its fair value but in line with its median historical valuation.
