Seeking Alpha
Long-term horizon
Profile| Send Message|
( followers)  

Large U.S. Institutional Managers report their holdings on form 13F with the SEC. Containing dated information, the forms don't do a lot for day traders and speculators. However, long term investors can get valuable information by spending a few minutes going through these filings. Some websites do a great job summarizing the information from 13F filings but there is nothing like going to the original source. Even if one is completely satisfied with the summaries, it is nice to see the data behind them in order to understand how they are constructed.

Comparing Berkshire Hathaway's (NYSE:BRK.A) 13F for the quarter ending September 30, 2011 to their 13F for the quarter ending September 30, 2012, we see that they sold almost all of their Johnson & Johnson (NYSE:JNJ) stock. It doesn't yet say "Sold Out" on the summaries but this change is enormous. The market value was almost 2.4 billion for the quarter ending September 30, 2011 but it was down to less than 34 million for the quarter ending September 30, 2012.

Sometimes 13F filings have more than one line for each stock. The detailed numbers are broken down here.

Market Value as of September 30, 2011 (In Thousands):

275,300
125,765
625,018
887,637
135,787
36,622
298,856
---------
2,384,985

Shares as of September 30, 2011:

4,322,500
1,974,648
9,813,442
13,936,841
2,132,000
575,000
4,692,357
----------
37,446,788

Market Value as of September 30, 2012 (In Thousands):

22,540
11,365
----------
33,905

Shares as of September 30, 2012:

327,100
164,928
-----------
492,028

This doesn't necessarily mean investors should sell JNJ but it does give them important information. Todd Combs and Ted Weschler do some of the trades for Berkshire but the size of the JNJ transaction leads one to believe that Warren Buffett was involved. Maybe he didn't like the $19.7 billion Synthes acquisition. It has been noted that he said the stock component of the deal suggested that JNJ management was undervaluing its own shares. It is also possible that Berkshire's JNJ position was reduced because of taxes or other factors that don't reflect poorly on JNJ. Actions speak louder than words so the 13F is important but investors should be careful about drawing conclusions from the 13F alone.

Pulling up 13F forms from the SEC site couldn't be much easier. In the case of the examples in this article, just go to the "More Search Options" link in the upper right corner of sec.gov. Type in "Berkshire Hathaway" as the Company name without the quotes. Next click on the CIK 0001067983 link and filter by 13F filing type. The older filing for the quarter ending September 30, 2011 has a filing date of 2011-11-15; the newer filing for the quarter ending September 30, 2012 has a filing date of 2012-11-14.

Disclaimer: Any material in this article should not be relied on as a formal investment recommendation.

Source: Reading 13F Filings: Berkshire Hathaway's Big Change With Johnson & Johnson