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

 |  Includes: BRK.A, BRK.B, JNJ
by: Eric Sprague

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):


Shares as of September 30, 2011:


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


Shares as of September 30, 2012:


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 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.

Disclosure: I am long BRK.A, BRK.B. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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