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 11/14/2013. 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 Q2 2013.
During Q3 2013, Berkshire Hathaway's (NYSE:BRK.A) (NYSE:BRK.B) US long stock portfolio increased 2.7% from $89B to $91.4B. The total number of holdings increased from 42 to 43. No positions were eliminated but a brand new 3.09% position in Exxon Mobil was 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 68.20% of the portfolio. The largest position remained the same as last quarter - Wells Fargo & Company at a whopping 20.94% of the US long portfolio - interestingly, Buffett broke a pattern of consistent buying in Wells Fargo this quarter - the position was kept steady.
Exxon Mobil (NYSE:XOM): XOM is a 3.75% of the US long portfolio stake. The position was first purchased in Q2 2013 but Buffett avoided disclosing it until this quarter by making use of the “section 13(f) Confidential Treatment Requests”. The original stake was a 3.09% of the US long portfolio position established at prices between $86 and $93. This quarter, the position was increased by ~28% at prices between $86.42 and $95.20. The stock currently trades at $93.22. The relatively large stake establishment indicates a clear bullish bias. For investors attempting to follow Buffett, XOM is a good option to consider.
Bank of New York Mellon Corp (NYSE:BK): BK is a 0.81% of the US stock portfolio stake that was increased marginally this quarter at prices between $28 and $32.21. The position was increased by 30% last quarter as well at prices between $26.70 and $30.55. Q1 2013 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 $33.31. The stake increase indicates a mild bullish bias.
DaVita Inc. (NYSE:DVA): DVA is a 1.96% 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. In Q1 2013, the position was increased by another 10% at prices between $54 and $62. Since then, the position was kept relatively steady although this quarter saw minor buying. The original position was purchased in Q4 2011 at prices between $30.32 and $38.40. The large stake increase in Q1 2012 and Q2 2012 happened at prices between $37.90 and $49.10. The stock currently trades at around $58.69. 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%. Note: DVA stock split 2-for-1 on 09/09/2013 and so the prices noted are split-adjusted.
US Bancorp (NYSE:USB): USB, a 3.17% stake has been in the portfolio since 2006. The position was tripled during the 2007-2009 timeframe and since then was reduced by around 15% overall as of EOY 2012. Q1 2013 saw a marginal increase in the position and last quarter saw more activity as ~17M shares were purchased at prices between $32.27 and $36.15. This quarter saw a marginal increase at prices between $35 and $38. Berkshire's cost-basis on USB is around $33 and the stock is trading above that price at $38.28.
Verisign Inc. (NASDAQ:VRSN): VRSN was purchased in Q4 2012 at prices between $34.15 and $49.48. The position was more than doubled in Q1 2013 to a 0.45% position at prices between $38 and $48. Last quarter, the position was again increased by one-third at prices between $44.39 and $49.27. This quarter saw a marginal stake increase at prices between $44.66 and $51.90. It currently trades at $55.81. 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.
Suncor Energy (NYSE:SU): SU is a 0.70% of the US long portfolio position established last quarter at prices between $26.84 and $32.36. The position was marginally increased this quarter at prices between $29.50 and $36.58. The stock currently trades at $35.67.
ConocoPhillips (NYSE:COP): COP is a long-term position that has been in the portfolio since 2006. Berkshire's cost-basis on COP is around $50.53. The position was reduced by 44% this quarter at prices between $60.50 and $71. The stock currently trades at $73.68. The significant stake reduction of a long-term position indicates a clear bearish bias.
DIRECTV (DTV): DTV is a 2.39% 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% in Q1 2013 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 position was kept steady last quarter and saw a minor 2% stake reduction this quarter at prices between $57.50 and $65.25. The stock currently trades at around $64.35. The activity does not indicate a change in bias.
Sanofi-Aventis (NYSE:SNY) and GlaxoSmithKline (NYSE:GSK): SNY is a very small 0.22% position that was reduced marginally this quarter. GSK was a minute 0.08% position last quarter and it was reduced to an even more minute 0.02% position this quarter. These are very minor positions and so the activity does not indicate a clear 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.
Moody's Corp. (NYSE:MCO): MCO is a 1.92% of the US long portfolio stake that was decreased by 14% last quarter at prices between $52.23 and $68.62. It was kept steady this quarter. The stock currently trades at $74. Buffett's cost basis is just over $10 and so he is sitting on large long-term capital gains on this position. The stock has returned around 47% YTD.
Kraft Foods Group Inc. (KRFT) and Mondelez International (NASDAQ:MDLZ): Buffett acquired KRFT and MDLZ shares in Q4 2012 due to the spin-off of Kraft Foods Inc. The combined position was reduced by around two-thirds that quarter and the pattern continued in Q1 2013 as both positions were reduced further. Last quarter, the positions were reduced to insignificantly small stakes and were kept steady this quarter.
Wells Fargo & Co. (NYSE:WFC): WFC is Buffett's largest stake at 20.94% of the US long portfolio well ahead of Coca-Cola (NYSE:KO) which is at 16.58%. The position was being incrementally increased every quarter but this quarter saw no buying at all. ~5M shares were purchased last quarter at prices between $36.27 and $41.56. That purchase was far less compared to Q1 2013 when over 18M shares were purchased at prices between $34.66 and $38.20. The stock currently trades at $43. Buffett is very bullish on WFC and his overall cost-basis is around $24. Even so, from the buying pattern in the last few quarters, it looks like his voracious appetite for WFC has subsided, at-least temporarily.
General Motors (NYSE:GM): GM is a 1.57% of the US long portfolio position that was first purchased in Q1 2012. The stake was increased by 60% last quarter at prices between $27.53 and $35.03 and was kept steady this quarter. The stock currently trades at $38.50.
Chicago Bridge & Iron (NYSE:CBI): CBI is a 0.71% of the US long portfolio position that was increased by 47% last quarter at prices between $50.92 and $63.75 and kept steady this quarter. The position was established in Q1 2013 at prices between $46 and $62. The stock currently trades well outside those ranges at around $78.95.
National Oilwell Varco Inc. (NYSE:NOV): NOV is a 0.76% of the US long portfolio stake that was increased by ~19% last quarter at prices between $64.14 and $71.57 and kept steady this quarter. The position was established in Q2 2012 at prices between $60 and $80.67. Since then, the position was increased consistently at prices between $64.40 and $84.83. The stock currently trades at around $83.56. The stake increase over several quarters indicates a bullish bias.
DISH Network Corporation (NASDAQ:DISH): DISH is a minute 0.03% of the US long portfolio stake initiated last quarter at prices between $36.24 and $42.52 and kept steady this quarter. As the stake is very small, the activity does not indicate a clear bias.
American Express (NYSE:AXP), Coca-Cola, Phillips 66 (NYSE:PSX), and Procter & Gamble (NYSE:PG): These are large stakes representing more than $1B each that were kept steady during the last four quarters. Buffett is very bullish on all of these businesses. Berkshire's cost-basis on AXP, KO, PSX, and PG are around $8.50, $3.25, $32, and $6.40.
International Business Machines (NYSE:IBM): IBM is Buffett's third largest stake at 13.80% of the portfolio. The position was increased marginally in Q1 2013 and has since been kept steady. 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 $182. Buffett is very bullish on IBM. For investors attempting to follow Buffett, IBM is a very good option to consider.
Wal-Mart Stores (NYSE:WMT): WMT is a stake first purchased in 2005. It has since been built up to a 3.98% position. The position was increased by 4% in Q1 2013 at prices between $68 and $75 and has since been kept steady. The stock currently trades at around $79. Berkshire's overall cost-basis on the position is around $52.
Costco Wholesale (NASDAQ:COST), Liberty Media Capital (NASDAQ:LMCA), M&T Bank (NYSE:MTB), USG Corporation (NYSE:USG), Viacom (NASDAQ: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 Holdings (NYSE:WBC): WBC is a small 0.38% 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 $87. The position was increased marginally in Q1 2013 but has since been kept steady.
Starz (NASDAQ: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 0.17% 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 (NYSE:DE), MasterCard Inc. (NYSE:MA), Precision Castparts (BATS:PCP), Torchmark (NYSE:TMK), and Visa Inc. (NYSE: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 (NYSE:GE), Johnson & Johnson (NYSE:JNJ), Lee Enterprises (NYSE:LEE), Media General (NYSE:MEG), United Parcel Service (NYSE:UPS), and Verisk Analytics (NASDAQ: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 Q3 2013:
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.