This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway's US stock portfolio on a quarterly basis. It is based on Warren Buffett's regulatory 13F Form filed on 08/15/2013. Please visit our Tracking 10 Years Of Berkshire Hathaway's Investment Portfolio article series for an idea on how his holdings have progressed over the years and our previous update highlighting the moves during Q1 2013.
During Q2 2013, Berkshire's [(BRK.A) (BRK.B)] US long stock portfolio increased 4.7% from $85B to $89B. The total number of holdings increased from 41 to 42. Gannett (GCI), a minute 0.04% of the US long portfolio stake as of last quarter is no longer in the portfolio. It was replaced by an even more minute 0.03% position in DISH Network Corporation (DISH). Also, a 0.59% of the US long portfolio stake in Suncor Energy (SU) was newly established in the quarter. The majority of the existing positions were left untouched although there were some incremental purchases and a few sells. Buffett continues to hold a very concentrated portfolio. The top-five positions remained the same as compared to last quarter and together they account for 71.41% of the portfolio. The largest position remained the same as last quarter - Wells Fargo & Company (WFC) at a whopping 21.47% of the US long portfolio.
Suncor Energy: SU is a 0.59% of the US long portfolio position established this quarter at prices between $26.84 and $32.36. The stock currently trades at $33.94.
DISH Network Corporation: DISH is a minute 0.03% of the US long portfolio stake initiated this quarter at prices between $36.24 and $42.52. As the stake is very small, the activity does not indicate a clear bias.
Gannett Inc. : GCI was a minute 0.04% of the US long portfolio stake that was disposed of this quarter at prices between $19.85 and $26.60. It is a very long-term position that was in the portfolio for over a decade. As the stake was very small, the activity does not indicate a clear bias.
Wells Fargo & Co. : WFC is Buffett's largest stake at 21.47% of the US long portfolio well ahead of Coca Cola (KO) which is at 18.02%. The position is being incrementally increased every quarter and the tradition continues with the purchase of another ~5M shares this quarter at prices between $36.27 and $41.56. The activity is far less compared to last quarter when over 18M shares were purchased at prices between $34.66 and $38.20. The stock currently trades outside those ranges at $43. Buffett is very bullish on WFC and his overall cost-basis is around $24.
US Bancorp (USB): USB, a 3.18% stake has been in the portfolio since 2006. The stake was tripled during the 2007-2009 timeframe and since then was reduced by around 15% overall as of EOY 2012. Last quarter saw a marginal increase in the position and this quarter saw more activity as ~17M shares were purchased at prices between $32.27 and $36.15. Berkshire's cost-basis on USB is around $33 and the stock is trading above that price at $36.77.
General Motors (GM): GM stake was increased by 60% to a 1.5% of the US long portfolio position this quarter at prices between $27.53 and $35.03. The stock currently trades at $34.44. The significant stake increase signifies a clear bullish bias.
Bank of New York Mellon Corp. (BK): BK is a 0.78% of the US stock portfolio stake that was increased by 30% this quarter at prices between $26.70 and $30.55. Last quarter saw a minor 4% stake reduction at prices between $26 and $29. The bulk of the position was purchased in Q2 2012 at prices between $19.51 and $24.67. The stock currently trades at $30.42. The stake increase indicates a bullish bias.
Chicago Bridge & Iron (CBI): CBI is a 0.64% of the US long portfolio position that was increased by 47% this quarter at prices between $50.92 and $63.75. The position was established last quarter at prices between $46 and $62. The stock currently trades at around $60.40. The stake increase represents a bullish bias.
National Oilwell Varco Inc. (NOV): NOV is a 0.69% of the US long portfolio stake that was increased by ~19% this quarter at prices between $64.14 and $71.57. The position was established in Q2 2012 at prices between $60 and $80.67. Since then, the position was increased every quarter at prices between $64.40 and $84.83. The stock currently trades at around $73.62. The stake increase over several quarters indicates a bullish bias. For investors attempting to follow Berkshire, NOV is a good option to consider.
Verisign Inc. (VRSN): VRSN was purchased in Q4 2012 at prices between $34.15 and $49.48. The position was more than doubled last quarter to a 0.45% position at prices between $38 and $48. This quarter, the position was again increased by one-third at prices between $44.39 and $49.27. It currently trades at $48.70. VRSN experienced a fleeting 20% price drop as a result of uncertainties regarding renewal of its .COM registry service contract with ICANN, and Buffett took advantage of the price drop to build the original position. The aggressive buying since then indicates a bullish bias.
Moody's Inc. (MCO): MCO is a 1.71% of the US long portfolio stake that was decreased by 14% this quarter at prices between $52.23 and $68.62. The stock currently trades at $64.35. Buffett's cost basis is just over $10 and so he is harvesting long-term capital gains from this position.
Kraft Foods Group Inc. (KRFT) and Mondelez International (MDLZ): Buffett acquired KRFT and MDLZ shares in Q4 2012 due to the spin-off of Kraft Foods Inc. (KFT). The combined position was reduced by around two-thirds that quarter and the pattern continued last quarter as both positions were reduced further. This quarter, the positions were reduced to insignificantly small stakes.
GlaxoSmithKline (GSK): GSK is a minute 0.08% position that was reduced marginally this quarter. The minor activity does not indicate any clear bias.
American Express (AXP), Coca Cola , ConocoPhillips (COP), Phillips 66 (PSX), and Procter & Gamble (PG): These are large stakes representing more than $1B each that were kept steady during the last three quarters. Buffett is very bullish on all of these businesses. Berkshire's cost-basis on AXP, KO, COP, PSX, and PG are around $8.50, $3.25, $50.53, $32, and $6.40.
DIRECTV (DTV): DTV is a 2.58% position first purchased in Q3 2011. The bulk of the current position was purchased in Q4 2011 at prices between $40.60 and $47.87. It was increased by around 10% last quarter at prices between $48 and $57 after having been increased by around 15% in Q4 2012 at prices between $48.17 and $53.24. The stock currently trades well above those ranges at around $60.
International Business Machines (IBM): IBM is Buffett's third largest stake at 14.62% of the portfolio. The position was increased marginally last quarter. The original stake was purchased in Q3 2011 at prices between $157.54 and $185.21. Since then, the position size has gone up by around 19% through periodic purchases. The stock currently trades at around $186. Buffett is very bullish on IBM.
DaVita Inc. (DVA): DVA is a 2.03% of the US long portfolio position that was aggressively built up over several quarters: the stake was doubled in Q1 2012, increased by over 50% in Q2 2012, and by an additional 24% in Q4 2012. Last quarter, the position was increased by another 10% at prices between $108 and $123. The original position was purchased in Q4 2011 at prices between $60.64 and $76.81. The large stake increase in Q1 2012 and Q2 2012 happened at prices between $75.81 and $98.21. The stock currently trades at around $113. In early May, Berkshire's Ted Weschler signed an accord with DVA, limiting the open-market stake increase to 25% of the company - the stake is currently at 14%.
Wal-Mart Stores (WMT): WMT is a stake first purchased in 2005 that was built up to a 4.12% position. The stake was increased by 4% last quarter at prices between $68 and $75. The stock currently trades at around $74.50. Berkshire's overall cost-basis on the position is around $52.
Costco Wholesale (COST), Liberty Media Capital (LMCA), M&T Bank (MTB), USG Corporation (USG), Viacom (VIAB), and Washington Post (WPO): These are positions that are over 0.5% of the US long portfolio that were kept steady in the last two quarters. Berkshire is bullish on these positions although the stakes are low on a relative basis.
Wabco Holding (WBC): WBC is a small 0.34% of the US long portfolio stake that was increased by 155% in Q4 2012 at prices between $56.27 and $65.19. The stock currently trades outside that range at $77.68. The position was increased marginally last quarter but was kept steady this quarter.
Starz (STRZA): STRZA was acquired as a result of separation of Starz from Liberty Media that became effective in the beginning of the year. Buffett owned LMCA and so ended up with 4.67% of the company. On a relative basis, the stake is minute at just 0.14% of the US long portfolio. Many high profile funds such as Steve Cohen's SAC Capital, Gates Foundation, D.E.Shaw, and Madison Street Partners established stakes in Starz following the separation from Liberty Media.
Deere & Company (DE), MasterCard Inc. (MA), Precision Castparts (PCP), Sanofi-Aventis (SNY), Torchmark (TMK), and Visa Inc. (V): These are very small positions (0.2% to 0.5% of the US long portfolio) that were kept steady this quarter. The small stakes indicate a mild bullish bias. Berkshire owns 2% of Sanofi per the Annual Report and so in addition to the 13F securities listed in the spreadsheet, Berkshire also owns Sanofi securities listed in Euronext Paris.
General Electric (GE), GlaxoSmithKline , Johnson & Johnson (JNJ), Lee Enterprises (LEE), Media General (MEG), United Parcel Service (UPS), and Verisk Analytics (VRSK): These are minute positions (less than 0.2% of the US long portfolio) that were left untouched in the quarter.
The spreadsheet below highlights changes to Berkshire Hathaway's US stock holdings in Q2 2013: