(GuruFocus, June 16, 2009) At the end of First Quarter 2009, Berkshire Hathaway announced an operation loss of $1.55 billion ($990 per share) and a drop in equity from $267 billion to $261 billion, including a drop in equity investment from $49 billion to $37.6 billion in the Insurance Subsidiaries.
Well, that is about to change. Unless the market turns south dramatically, Berkshire Hathaway is going to report decent gain in the investment in 2Q09, giving its book value a boost.
After the 1Q09 Quarters’s end, the equity portfolio tacked by GuruFocus has gone up 20%, compared to the MERE less than 14% gain of S&P 500 Index. That translates into an eight billion increase in the company’s equity.
Since the beginning of the year 2009, Berkshire Hathaway (BRK-A) (BRK-B) stock prices have underperformed the broad market index S&P 500 by 8.5%. Investors have concerns on the effect of the ailing economy on the company’s operating results as well as the effect of the declining stock market on the company’s equity investments. At lease for now, the concern on the equity investment should be alleviated.
The top six holdings of the company’s equity portfolio each contributed to the strong showing: CocaCola Company (KO, Financial), Burlington Northern Santa Fe Corp. (BNI, Financial), The Procter & Gamble Company (PG, Financial), Wells Fargo & Company (WFC, Financial), Kraft Foods Inc. (KFT, Financial), ConocoPhillips (COP, Financial)
No. 1: The CocaCola Company (KO), Weightings: 21.51% - 200,000,000 Shares
The Coca-Cola Company is the world's largest beverage company and is the leading producer and marketer of soft drinks. The CocaCola Company has a market cap of $111.37 billion; its shares were traded at around $48.11 with a P/E ratio of 15.4 and P/S ratio of 3.5. The dividend yield of The CocaCola Company stocks is 3.4%. 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.
Berkshire Hathaway holds 200 million shares of KO tocks since before year 2000, when the stock price was higher than it is today. Warren Buffett has been criticized for not selling some stocks even when he knew the stock price is overvalued; KO is one of those stock. The stock returned 9.5% since the end of last quarter, short of the S&P 500 gain. On the other hand, it did not have the kind of carnage the other stocks and market as a whole have seen in the past year. YTD, KO stock is up 6%.
No. 2: Burlington Northern Santa Fe Corp. (BNI), Weightings: 11.3% - 76,777,029 Shares
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. Burlington Northern Santa Fe Corp. has a market cap of $24.87 billion; its shares were traded at around $73.25 with a P/E ratio of 12.5 and P/S ratio of 1.4. The dividend yield of Burlington Northern Santa Fe Corp. stocks is 2.2%. 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.
This is one stock that Warren Buffett has been buying consistently in recent years without expressing regret. GuruFocus speculated that Warren Buffett may one day take a majority stake in the railway company. As of 1Q09, he has close to 77 million shares and companies total number of shares outstanding has shrunk to 339 million shares, or three million shares from a quarter earlier. BNI stock is up 21.8% for the quarter and down 3% for the year.
No. 3: The Procter & Gamble Company (PG), Weightings: 11.1% - 96,316,010 Shares
The Procter & Gamble Company manufactures and markets a broad range of consumer products in many countries throughout the world. The Procter & Gamble Company has a market cap of $149.61 billion; its shares were traded at around $51.33 with a P/E ratio of 14.3 and P/S ratio of 1.8. The dividend yield of The Procter & Gamble Company stocks is 3.4%. 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.
Berkshire Hathaway acquired a bulk of his 100 million shares of PG when P&G acquired his long time holding of Gillette in 2005. PG share is up 9% for the quarter and down 18% for the year. Warren Buffett sold about 10 million shares of PG back in 4Q08 to beef up his war chest.
No. 4: Wells Fargo & Company (WFC), Weightings: 10.54% - 302,609,212 Shares
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 $116.26 billion; its shares were traded at around $24.71 with a P/E ratio of 30.1 and P/S ratio of 2.2. 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.
Warren Buffett has held WFC for a long time and he has bought more during the first quarter. This is one stock that Warren Buffett bought for his personal portfolio in 4Q08. Berkshire Hathaway has 302 million shares. Since the end of the quarter, WFC has appreciated 73.5%, and since the beginning of the year, it is still down 17%.
No. 5: Kraft Foods Inc. (KFT), Weightings: 7.54% - 138,272,500 Shares
Kraft Foods Inc. is the largest branded food and beverage company headquartered in the U.S. and the second largest in the world. Kraft Foods Inc. has a market cap of $37.12 billion; its shares were traded at around $25.26 with a P/E ratio of 13.3 and P/S ratio of 0.9. The dividend yield of Kraft Foods Inc. stocks is 4.6%.
Warren Buffett acquired his 138 million shares of KFT from 2Q07 to 1Q08. KFT is up 13.3% for the quarter and down 7% for the year.
No. 6: ConocoPhillips (COP), Weightings: 6.82% - 71,228,096 Shares
ConocoPhillips is a major international integrated energy company with operations in some 49 countries. ConocoPhillips has a market cap of $63.85 billion; its shares were traded at around $43.1 with a P/E ratio of 4.9 and P/S ratio of 0.3. The dividend yield of ConocoPhillips stocks is 4.4%. ConocoPhillips had an annual average earning growth of 19% over the past 10 years.
Warren Buffett acquired most shares in COP for Berkshire Hathaway in 2Q08 to 3Q08 when oil price was making all time highs. He owned 83 million shares when in 3Q08 and has been selling COP shares in the past two quarters at a loss.
GuruFocus has started publishing a news letter based on our Buffett-Munger stock screener. Starting from June 2009, each month, we screens, research and recommend on two stocks. The first issue is available through this link.
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Well, that is about to change. Unless the market turns south dramatically, Berkshire Hathaway is going to report decent gain in the investment in 2Q09, giving its book value a boost.
After the 1Q09 Quarters’s end, the equity portfolio tacked by GuruFocus has gone up 20%, compared to the MERE less than 14% gain of S&P 500 Index. That translates into an eight billion increase in the company’s equity.
Since the beginning of the year 2009, Berkshire Hathaway (BRK-A) (BRK-B) stock prices have underperformed the broad market index S&P 500 by 8.5%. Investors have concerns on the effect of the ailing economy on the company’s operating results as well as the effect of the declining stock market on the company’s equity investments. At lease for now, the concern on the equity investment should be alleviated.
The top six holdings of the company’s equity portfolio each contributed to the strong showing: CocaCola Company (KO, Financial), Burlington Northern Santa Fe Corp. (BNI, Financial), The Procter & Gamble Company (PG, Financial), Wells Fargo & Company (WFC, Financial), Kraft Foods Inc. (KFT, Financial), ConocoPhillips (COP, Financial)
No. 1: The CocaCola Company (KO), Weightings: 21.51% - 200,000,000 Shares
The Coca-Cola Company is the world's largest beverage company and is the leading producer and marketer of soft drinks. The CocaCola Company has a market cap of $111.37 billion; its shares were traded at around $48.11 with a P/E ratio of 15.4 and P/S ratio of 3.5. The dividend yield of The CocaCola Company stocks is 3.4%. 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.
Berkshire Hathaway holds 200 million shares of KO tocks since before year 2000, when the stock price was higher than it is today. Warren Buffett has been criticized for not selling some stocks even when he knew the stock price is overvalued; KO is one of those stock. The stock returned 9.5% since the end of last quarter, short of the S&P 500 gain. On the other hand, it did not have the kind of carnage the other stocks and market as a whole have seen in the past year. YTD, KO stock is up 6%.
No. 2: Burlington Northern Santa Fe Corp. (BNI), Weightings: 11.3% - 76,777,029 Shares
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. Burlington Northern Santa Fe Corp. has a market cap of $24.87 billion; its shares were traded at around $73.25 with a P/E ratio of 12.5 and P/S ratio of 1.4. The dividend yield of Burlington Northern Santa Fe Corp. stocks is 2.2%. 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.
This is one stock that Warren Buffett has been buying consistently in recent years without expressing regret. GuruFocus speculated that Warren Buffett may one day take a majority stake in the railway company. As of 1Q09, he has close to 77 million shares and companies total number of shares outstanding has shrunk to 339 million shares, or three million shares from a quarter earlier. BNI stock is up 21.8% for the quarter and down 3% for the year.
No. 3: The Procter & Gamble Company (PG), Weightings: 11.1% - 96,316,010 Shares
The Procter & Gamble Company manufactures and markets a broad range of consumer products in many countries throughout the world. The Procter & Gamble Company has a market cap of $149.61 billion; its shares were traded at around $51.33 with a P/E ratio of 14.3 and P/S ratio of 1.8. The dividend yield of The Procter & Gamble Company stocks is 3.4%. 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.
Berkshire Hathaway acquired a bulk of his 100 million shares of PG when P&G acquired his long time holding of Gillette in 2005. PG share is up 9% for the quarter and down 18% for the year. Warren Buffett sold about 10 million shares of PG back in 4Q08 to beef up his war chest.
No. 4: Wells Fargo & Company (WFC), Weightings: 10.54% - 302,609,212 Shares
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 $116.26 billion; its shares were traded at around $24.71 with a P/E ratio of 30.1 and P/S ratio of 2.2. 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.
Warren Buffett has held WFC for a long time and he has bought more during the first quarter. This is one stock that Warren Buffett bought for his personal portfolio in 4Q08. Berkshire Hathaway has 302 million shares. Since the end of the quarter, WFC has appreciated 73.5%, and since the beginning of the year, it is still down 17%.
No. 5: Kraft Foods Inc. (KFT), Weightings: 7.54% - 138,272,500 Shares
Kraft Foods Inc. is the largest branded food and beverage company headquartered in the U.S. and the second largest in the world. Kraft Foods Inc. has a market cap of $37.12 billion; its shares were traded at around $25.26 with a P/E ratio of 13.3 and P/S ratio of 0.9. The dividend yield of Kraft Foods Inc. stocks is 4.6%.
Warren Buffett acquired his 138 million shares of KFT from 2Q07 to 1Q08. KFT is up 13.3% for the quarter and down 7% for the year.
No. 6: ConocoPhillips (COP), Weightings: 6.82% - 71,228,096 Shares
ConocoPhillips is a major international integrated energy company with operations in some 49 countries. ConocoPhillips has a market cap of $63.85 billion; its shares were traded at around $43.1 with a P/E ratio of 4.9 and P/S ratio of 0.3. The dividend yield of ConocoPhillips stocks is 4.4%. ConocoPhillips had an annual average earning growth of 19% over the past 10 years.
Warren Buffett acquired most shares in COP for Berkshire Hathaway in 2Q08 to 3Q08 when oil price was making all time highs. He owned 83 million shares when in 3Q08 and has been selling COP shares in the past two quarters at a loss.
| Ticker | 1Q09 Weighting | P/E | Yield (%) | Market Cap ($M) | Price Change Since 2009-03-31 (%) | % Above 52-W Low | % Below 52-W High |
|---|---|---|---|---|---|---|---|
| KO | 21.51% | 15.4 | 3.4 | 111374 | +9.5% | 27.11 | -17.07 |
| BNI | 11.3% | 12.5 | 2.2 | 24872.6 | +21.8% | 43.07 | -35.8 |
| PG | 11.1% | 14.3 | 3.4 | 149612 | +9% | 16.18 | -29.83 |
| WFC | 10.54% | 30.1 | 0.8 | 116258 | +73.5% | 204.31 | -37.91 |
| KFT | 7.54% | 13.3 | 4.6 | 37116.7 | +13.3% | 20.29 | -27.77 |
| COP | 6.82% | 4.9 | 4.4 | 63854.9 | +10.1% | 22.69 | -55 |
GuruFocus has started publishing a news letter based on our Buffett-Munger stock screener. Starting from June 2009, each month, we screens, research and recommend on two stocks. The first issue is available through this link.
Also check out:
