(GuruFocus, October 1, 2009) The third quarter of 2009 has been the best for stock market for a while. Dow was up 15%, the best quarter since 1998 and its best third quarter since 1939. Nasdaq Composite and S&P 500 also made 16% and 15% gain respectively.
Our hero Warren Buffett’s company, Berkshire Hathaway stock has not been so glamorous. From June 30 to September 30, 2009, the class A share (BRK-A) climbed 11% from $9000 to $101,000 per share, lagging the market by about 4%. GuruFocus columnist Ravi Nagarajan estimated that the company’s stock portfolio increased about 14%, slightly below the market performance. Ravi further observed the book value of Berkshire Hathaway at the end of Q3, 2009 is between $78,553 and $79,197, putting the book value at a historical high. Different times, the historical high book value per share has failed to produce a historical high stock price, for class-A shares is a far cry from the historical high of about $150,000. The higher book value only speaks for Buffett’s superior capability of asset management; we have to wait for another day for the stock to make a record high. The day has to be when the investors are far more willing to pay for the premium for good management.
In a generally good market, there have been actually in Berkshire’s holdings stocks that lost ground during the quarter, ant these are:
1. Becton Dickinson and Co.(BDX, Financial)
Becton Dickinson and Co. is engaged principally in the manufacture and sale of a broad line of supplies devices and systems used by health care professionals medical research institutions and the general public. BD's operations consist of three worldwide business segments: Medical Systems Biosciences and Preanalytical Solutions. Becton Dickinson And Company has a market cap of $16.75 billion; its shares were traded at around $69.75 with a P/E ratio of 14.4 and P/S ratio of 2.4. The dividend yield of Becton Dickinson And Company stocks is 1.9%. Becton Dickinson And Company had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Becton Dickinson And Company the business predictability rank of 4-star.
Buffett bought 1,200,000 shares in the quarter that ended on 06/30/2009, which is 0.17% of the $48.95 billion portfolio of Berkshire Hathaway.
BDX was down 2.2% during the quarter.
2. Iron Mountain Incorporated (IRM, Financial)
Iron Mountain Incorporated is one of the world's largest records and information management services company. The company is an international full-service provider of records and information management and related services enabling customers to outsource records management functions. Iron Mountain has a diversified customer base which includes more than half of the Fortune 500 and numerous commercial legal banking healthcare accounting insurance entertainment and government organizations. Iron Mountain Inc. has a market cap of $5.41 billion; its shares were traded at around $26.66 with a P/E ratio of 30.6 and P/S ratio of 1.8. Iron Mountain Inc. had an annual average earning growth of 16.7% over the past 10 years. GuruFocus rated Iron Mountain Inc. the business predictability rank of 5-star.
Buffett owns 3,372,200 shares as of 06/30/2009, which accounts for 0.2% of the $48.95 billion portfolio of Berkshire Hathaway.
The stock is down 7.30% since the beginning of 3Q09.
3. WellPoint Inc. (WLP, Financial)
WellPoint Inc. is the largest publicly traded commercial health benefits company in terms of membership in the United States. Wellpoint Inc. has a market cap of $22.75 billion; its shares were traded at around $47.36 with a P/E ratio of 8.1 and P/S ratio of 0.4. Wellpoint Inc. had an annual average earning growth of 20.8% over the past 5 years.
Buffett owns 3,500,000 shares as of 06/30/2009, a decrease of 26.74% of from the previous quarter. This position accounts for 0.36% of the $48.95 billion portfolio of Berkshire Hathaway.
WLP is down 6.9% during 3Q09.
4. Moody's Corporation
Moody's Corporation is the parent company of Moody's Investors Service a leading provider of credit ratings research and analysis covering debt instruments and securities in the global capital markets; Moody's KMV a leading provider of credit risk processing and credit risk management products for banks and investors in credit-sensitive assets serving the world's largest financial institutions Moody's Economy.com a provider of economic research and data services and Moody's Wall Street Analytics a provider of software tools and analysis for the structured finance industry. Moody's Corp. has a market cap of $5.02 billion; its shares were traded at around $20.46 with a P/E ratio of 12.8 and P/S ratio of 2.9. The dividend yield of Moody's Corp. stocks is 1.8%.
Buffett owns 48,000,000 shares as of 06/30/2009, which accounts for 2.58% of the $48.95 billion portfolio of Berkshire Hathaway.
MCO is down 22.4% since the beginning of 3Q09.
Conclusion
Two of the down stocks during 3Q09 is from the Health Care sector (BDX and WLP), and for Moody’s it is reckoning time.
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Our hero Warren Buffett’s company, Berkshire Hathaway stock has not been so glamorous. From June 30 to September 30, 2009, the class A share (BRK-A) climbed 11% from $9000 to $101,000 per share, lagging the market by about 4%. GuruFocus columnist Ravi Nagarajan estimated that the company’s stock portfolio increased about 14%, slightly below the market performance. Ravi further observed the book value of Berkshire Hathaway at the end of Q3, 2009 is between $78,553 and $79,197, putting the book value at a historical high. Different times, the historical high book value per share has failed to produce a historical high stock price, for class-A shares is a far cry from the historical high of about $150,000. The higher book value only speaks for Buffett’s superior capability of asset management; we have to wait for another day for the stock to make a record high. The day has to be when the investors are far more willing to pay for the premium for good management.
In a generally good market, there have been actually in Berkshire’s holdings stocks that lost ground during the quarter, ant these are:
| Ticker | P/E | Yield (%) | Market Cap ($M) | Price Change Since 2Q09 |
| BDX | 14.4 | 1.9 | 16748.6 | -2.20% |
| IRM | 30.6 | 0 | 5405.7 | -7.30% |
| WLP | 8.1 | 0 | 22752.8 | -6.90% |
| MCO | 12.8 | 1.8 | 5021.9 | -22.40% |
1. Becton Dickinson and Co.(BDX, Financial)
Becton Dickinson and Co. is engaged principally in the manufacture and sale of a broad line of supplies devices and systems used by health care professionals medical research institutions and the general public. BD's operations consist of three worldwide business segments: Medical Systems Biosciences and Preanalytical Solutions. Becton Dickinson And Company has a market cap of $16.75 billion; its shares were traded at around $69.75 with a P/E ratio of 14.4 and P/S ratio of 2.4. The dividend yield of Becton Dickinson And Company stocks is 1.9%. Becton Dickinson And Company had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Becton Dickinson And Company the business predictability rank of 4-star.
Buffett bought 1,200,000 shares in the quarter that ended on 06/30/2009, which is 0.17% of the $48.95 billion portfolio of Berkshire Hathaway.
BDX was down 2.2% during the quarter.
2. Iron Mountain Incorporated (IRM, Financial)
Iron Mountain Incorporated is one of the world's largest records and information management services company. The company is an international full-service provider of records and information management and related services enabling customers to outsource records management functions. Iron Mountain has a diversified customer base which includes more than half of the Fortune 500 and numerous commercial legal banking healthcare accounting insurance entertainment and government organizations. Iron Mountain Inc. has a market cap of $5.41 billion; its shares were traded at around $26.66 with a P/E ratio of 30.6 and P/S ratio of 1.8. Iron Mountain Inc. had an annual average earning growth of 16.7% over the past 10 years. GuruFocus rated Iron Mountain Inc. the business predictability rank of 5-star.
Buffett owns 3,372,200 shares as of 06/30/2009, which accounts for 0.2% of the $48.95 billion portfolio of Berkshire Hathaway.
The stock is down 7.30% since the beginning of 3Q09.
3. WellPoint Inc. (WLP, Financial)
WellPoint Inc. is the largest publicly traded commercial health benefits company in terms of membership in the United States. Wellpoint Inc. has a market cap of $22.75 billion; its shares were traded at around $47.36 with a P/E ratio of 8.1 and P/S ratio of 0.4. Wellpoint Inc. had an annual average earning growth of 20.8% over the past 5 years.
Buffett owns 3,500,000 shares as of 06/30/2009, a decrease of 26.74% of from the previous quarter. This position accounts for 0.36% of the $48.95 billion portfolio of Berkshire Hathaway.
WLP is down 6.9% during 3Q09.
4. Moody's Corporation
Moody's Corporation is the parent company of Moody's Investors Service a leading provider of credit ratings research and analysis covering debt instruments and securities in the global capital markets; Moody's KMV a leading provider of credit risk processing and credit risk management products for banks and investors in credit-sensitive assets serving the world's largest financial institutions Moody's Economy.com a provider of economic research and data services and Moody's Wall Street Analytics a provider of software tools and analysis for the structured finance industry. Moody's Corp. has a market cap of $5.02 billion; its shares were traded at around $20.46 with a P/E ratio of 12.8 and P/S ratio of 2.9. The dividend yield of Moody's Corp. stocks is 1.8%.
Buffett owns 48,000,000 shares as of 06/30/2009, which accounts for 2.58% of the $48.95 billion portfolio of Berkshire Hathaway.
MCO is down 22.4% since the beginning of 3Q09.
Conclusion
Two of the down stocks during 3Q09 is from the Health Care sector (BDX and WLP), and for Moody’s it is reckoning time.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
