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Holly LaFon
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Warren Buffett's Berkshire Buys 4 Stocks, Sells Walmart in 3rd Quarter

Managers aggressively buy financials

Berkshire Hathaway, where investing legend Warren Buffett (Trades, Portfolio) is CEO and chairman, unveiled its third-quarter portfolio on Wednesday afternoon, revealing its most aggressive buying in six years.

Berkshire purchased four stocks, primarily in the financial sector: JPMorgan Chase & Co. (NYSE:JPM), Oracle Corp. (NYSE:ORCL), PNC Financial Services Group Inc. (NYSE:PNC) and The Travelers Companies Inc. (NYSE:TRV). Managers of Berkshire’s portfolio also increased positions in seven holdings, the largest of which were financials: Goldman Sachs Group Inc. (NYSE:GS), Bank of America Corp. (NYSE:BAC) and US Bancorp (NYSE:USB).

The activity expanded the financial sector’s share of Berkshire’s portfolio to 42.59% from 40.5% in the prior quarter. Stocks from the sector continue to occupy the greatest chunk of Berkshire’s portfolio.

In sales, Berkshire ended its long-term investments in two stocks, Sanofi SA (NASDAQ:SNY) and Walmart (NYSE:WMT). It also halved its position in oil refiner Philips 66 (NYSE:PSX) and made reductions of just over 2% to American Airlines Group (NASDAQ:AAL) and United Continental Holdings Inc. (NASDAQ:UAL).

Berkshire does not specify which trades were made by Buffett or one of his portfolio managers, Ted Weschler and Todd Combs, as they all share the portfolio. They sometimes claim a certain investment in interviews with the press or elsewhere.

At third quarter-end, Berkshire’s portfolio value totaled $221.02 billion, with 46 stocks listed. The largest positions changed to Apple (AAPL) at 25.79% of the portfolio, Bank of America at 11.69% and Wells Fargo & Co. at 10.52% as The Kraft Heinz Co. (KHC) fell from third place to fifth.

Berkshire’s new buys

JPMorgan Chase & Co.

Berkshire purchased 35,664,767 shares of the company, giving it 1.82% portfolio weight. The stock’s price averaged $114 in the third quarter.

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JPMorgan Chase & Co. has a market cap of $356.92 billion; its shares were traded around $107.33 Wednesday with a price-earnings ratio of 13.28 and sales ratio of 3.49. The trailing 12-month dividend yield of JPMorgan Chase & Co. is 2.30%. The forward dividend yield of JPMorgan Chase & Co. is 2.92%.

Oracle Corp.

Berkshire purchased 41,404,791 shares, giving it 0.97% portfolio weight. The stock’s third-quarter price averaged $49 per share.

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Oracle Corp. has a market cap of $183.95 billion; its shares were traded around $48.84 Wednesday with a price-earnings ratio of 53.66 and price-sales ratio of 5.07. The trailing 12-month dividend yield of Oracle Corp. is 1.56%. The forward dividend yield of Oracle Corp. is 1.54%. Oracle Corp. had an annual average earnings growth of 8.10% over the past 10 years. GuruFocus rated Oracle Corp. the business predictability rank of 2-star.

PNC Financial Services Group Inc.

Berkshire purchased 6,087,319 shares, giving it 0.38% portfolio space. The third-quarter share price averaged $142.

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PNC Financial Services Group Inc. has a market cap of $61.89 billion; its shares were traded around $134.13 Wednesday with a price-earnings ratio of 11.06 and price-sales ratio of 3.73. The trailing 12-month dividend yield of PNC Financial Services Group Inc. is 2.53%. The forward dividend yield of PNC Financial Services Group Inc. is 2.80%.

The Travelers Companies Inc.

Berkshire purchased 3,543,688 shares, giving it 0.21% portfolio space. The third-quarter share price averaged $129.

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The Travelers Companies Inc. has a market cap of $32.65 billion; its shares were traded around $123.04 Wednesday with a price-earnings ratio of 13.75 and price-sales ratio of 1.14. The trailing 12-month dividend yield of The Travelers Companies Inc. is 2.43%. The forward dividend yield of The Travelers Companies Inc. is 2.43%. The Travelers Companies Inc. had an annual average earnings growth of 7.70% over the past 10 years.

See Berkshire Hathaway’s portfolio here.

Read more here: 

Easy Economics: Entry and Exit Points for Value Investors

Warren Buffett Takes 11% Stake in Stoneco

Berkshire's 1994 Annual Meeting Transcripts Notes

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website


Rating: 4.0/5 (1 vote)

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Comments

richday101
Richday101 - 4 months ago    Report SPAM
Hi Holly. They also bought 225 BRK.A shares and 4,139,192 BRK.B shares for a total of $ 928 million in the 3rd Quarter, first time they bought their shares since 1912. Here are two links: [cnn.it] [bit.ly] ... Rick D.
Holly LaFon
Holly LaFon premium member - 4 months ago

Good point! Thank you.

richday101
Richday101 - 4 months ago    Report SPAM

Thanks, Holly. I meant to say "first time they bought BRK shares since 2012." Could GF include the buys on "Buffett stock picks" table.

Holly LaFon
Holly LaFon premium member - 4 months ago

Per our data people, we record only the data from the 13F/13D/G SEC filings. We will be writing about buybacks when they announce them, though. (We did a piece about the most recent one.)

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