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Summary

  • Warren Buffett's US long stock portfolio increased marginally from $105.77B to $107.58B this quarter.
  • Berkshire Hathaway's largest three holdings are at over half the entire portfolio.
  • Berkshire Hathaway almost eliminated ConocoPhillips and Graham Holdings this quarter.

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 08/14/2014. 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 2014.

During Q1 2014, Berkshire Hathaway's (NYSE:BRK.A) (NYSE:BRK.B) US long stock portfolio increased marginally from $105.77B to $107.58B. Unlike last quarter when there were only minor changes, this quarter saw substantial stake increases and correspondingly large reductions on several positions. Buffett continues to hold a very concentrated portfolio. The top-five positions account for over two-thirds of the portfolio. The largest position remained the same as last quarter - Wells Fargo & Company at a whopping 22.64% of the US long portfolio - Buffett broke a pattern of consistent buying in Wells Fargo in Q3 2013 and since then the position has been kept relatively steady. Warren Buffett's writings (pdfs) are a treasure trove of information and are a very good option for anyone starting out on individual investing.

New stakes:

None.

Stake Disposals:

None.

Stake Increases:

Chicago Bridge & Iron (NYSE:CBI): CBI is a 0.68% of the US long portfolio position that was increased by 47% in Q2 2013 at prices between $50.92 and $63.75. This quarter saw a 12% stake increase at prices between $65.51 and $87.65. The original position was purchased in Q1 2013 at prices between $46 and $62. The stock currently trades at $58.32. Berkshire controls 9.89% of the business.

General Motors (NYSE:GM): GM is a 0.98% of the US long portfolio position that was first purchased in Q1 2012 at prices between $21 and $30. The stake was increased by 60% in Q2 2013 at prices between $27.53 and $35.03 and had since been kept steady. Last quarter saw a 25% stake reduction at prices between $34 and $41 and this quarter there was an about-turn: a 9.86% increase at prices between $31.93 and $37.09. The stock currently trades at $33.84.

International Business Machines (NYSE:IBM): IBM is Buffett's fourth largest stake at 11.82% of the portfolio. The position was increased marginally in Q1 2013 and had 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. Last two quarters have seen minor buying and the stock currently trades at $187.38. Berkshire's cost-basis on IBM is at around $171. Buffett is very bullish on IBM and controls ~7% of the business. For investors attempting to follow Buffett, IBM is a very good option to consider.

Suncor Energy (NYSE:SU): SU is a small 0.65% of the US long portfolio position first purchased in Q2 2013 at prices between $27.40 and $32. It was increased by ~27% this quarter at prices between $34.96 and $43.17. The stock currently trades at $39.43.

U.S. Bancorp (NYSE:USB): USB, a 3.23% 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 the following quarter saw more activity as ~17M shares were purchased at prices between $32.27 and $36.15. The last four quarters have seen marginal stake increases. Berkshire's cost-basis on USB is around $31 and the stock is trading well above that price at $41.27. Buffett controls 4.4% of the business.

USG Corporation (NYSE:USG): USG is a very long-term holding and there was a significant 21.39M share stake increase in Q4 2013 due to conversion of notes at $11.40 per share - Berkshire acquired the convertible notes during the financial crisis (2/2009) and USG opted to redeem them on 12/16/2013. This quarter saw a ~11.5% stake increase at prices between $29.57 and $33.16. The stock currently trades at $28. Buffett controls around 27% of the business.

VeriSign Inc. (NASDAQ:VRSN): VRSN was first 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. In Q2 2013, the stake was again increased by one-third at prices between $44.39 and $49.27. Last quarter saw a ~6% increase at prices between $51.68 and $62.61 and this quarter saw another ~11% increase at prices between $47 and $54. It currently trades at $55.74. The current position is at ~10% of the business.

Wal-Mart Stores (NYSE:WMT): WMT stake was first purchased in 2005. It has since been built up to a 4.10% position. It is a top-five position as of last quarter as it edged out the Procter & Gamble stake. The position was increased by 4% in Q1 2013 at prices between $68 and $75 and had since been kept relatively steady. Last quarter saw a 17% stake increase at prices between $72.66 and $78.91 and this quarter saw a marginal increase. The stock currently trades at $73.90. Berkshire's overall cost-basis on the position is at around $54.

Verizon Communications (NYSE:VZ): VZ is a small 0.68% of the US long portfolio position established last quarter at prices between $46 and $49.30. It was increased by ~36% this quarter at prices between $45.94 and $50.05. The stock currently trades at $48.80.

Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYK): Liberty Global was a minute 0.25% position established in Q4 2013 at prices between $37.50 and $44.50 (adjusted for the 03/2014 stock-split) and increased significantly to a 0.57% position last quarter at prices between $40.37 and $46. This quarter, the position was further increased by ~17% at prices between $38.49 and $45.61. The stock currently trades at $43.76.

Stake Decreases:

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% in Q3 2013 at prices between $60.50 and $71 and another ~18% in Q4 2013 at prices between $69 and $74.31. This quarter, the position was almost eliminated at prices between $69.48 and $86.10. The stock currently trades at $80.62 and the remaining stake is minute at just 0.11% of the US long portfolio.

DIRECTV (NASDAQ:DTV): DTV is a 1.85% position first purchased in Q3 2011. The bulk of the current stake was purchased in Q4 2011 at prices between $40.60 and $47.87. This quarter, the position was reduced by around one-third at prices between $74 and $88.25. The stock currently trades at around $84.21. AT&T (NYSE:T) is in the process of acquiring DTV in a $95 per share cash-and-stock deal ($28.50 per share cash). Berkshire's cost-basis is at around $45.

Graham Holdings (NYSE:GHC) previously Washington Post: The small position was kept steady in the last five quarters but was almost eliminated this quarter at prices between $662 and $730. The stock currently trades at $712. The activity indicates a bearish bias.

Liberty Media (NASDAQ:LMCA): LMCA was a petite 0.35% stake first purchased in Q4 2011. It was increased by ~75% in Q1 2012 and roughly doubled the next quarter. This quarter saw a ~24% stake reduction at prices between $43.13 and $47.70 and the stock currently trades at around $49. The position now represents around 0.51% of the portfolio. On May 8, 2014, LMCA announced a plan to spin off its cable assets.

National Oilwell Varco Inc. (NYSE:NOV): NOV is a 0.56% of the US long portfolio stake that was increased by ~19% in Q2 2013 at prices between $64.14 and $71.57 and had since been kept steady. The position was established in Q2 2012 at prices between $60 and $80.67. This quarter saw an 18% stake reduction at prices between $74 and $84. The stock currently trades at $82.11.

NOTE: The implied performance of this position by the prices quoted above is negatively skewed because of the effect of National Oilwell Varco's Now Inc. spinoff. The terms called for NOV shareholders to receive one share of DNOW for every four shares of NOV held.

Phillips 66 (NYSE:PSX): The 2% of the US long portfolio PSX stake as of Q4 2013 was reduced to a 0.71% stake last quarter at prices between $70.67 and $80.35. The position was further reduced by one-third this quarter at prices between $76.69 and $86.33. The stock currently trades at $83.79. Berkshire's cost-basis on PSX is at around $32. Berkshire is harvesting large gains from this position.

Kept Steady:

Wells Fargo & Co. (NYSE:WFC): WFC is Buffett's largest stake at 22.64% of the US long portfolio well ahead of Coca-Cola (NYSE:KO) which is at 15.75%. The last significant purchases happened in Q2 2013 when over 18M shares were purchased at prices between $34.66 and $38.20 and Q1 2013 when ~5M shares were purchased at prices between $36.27 and $41.56. The stock currently trades at $50.21. Berkshire's overall cost-basis is at around $24.55.

American Express (NYSE:AXP), Coca-Cola, and Procter & Gamble (NYSE:PG): These are very large stakes that were kept steady during the last six quarters. Buffett has said these positions will be held "permanently". Berkshire's cost-basis on AXP, KO, and PG are at around $8.49, $3.25, and $6.40 respectively.

Bank of New York Mellon Corp. (NYSE:BK): BK is a 0.86% of the US stock portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.51 and $24.67. The stake was increased by 30% in Q2 2013 as well at prices between $26.70 and $30.55 and since then has been kept relatively steady. The stock currently trades at $38.24.

DaVita (NYSE:DVA): DVA is a 2.53% 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. The bulk of the buying happened at prices between $30 and $49. Q4 2013 saw a ~16% stake increase at prices between $55 and $64 and last quarter saw a ~3% increase at prices between $62.74 and $69.81. The stock currently trades at around $72.11. In May 2013, Berkshire's Ted Weschler signed an accord with DVA, limiting open-market purchases to 25% of the company- the position is currently at 17.6% of the business.

Exxon Mobil (NYSE:XOM): XOM is a 3.85% of the US long portfolio stake. The position was first purchased in Q2 2013 but Buffett avoided disclosing it until Q4 2013 by making use of the "section 13(f) Confidential Treatment Requests". The original stake was a 3.85% of the US long portfolio position established at prices between $86 and $93. In Q3 2013, the position was increased by ~28% at prices between $86.42 and $95.20. The stock currently trades at $99. The relatively large stake build-up indicates a clear bullish bias. For investors attempting to follow Buffett, XOM is a good option to consider.

Goldman Sachs (NYSE:GS): GS is 1.97% of the US long portfolio stake established in Q4 2013. Berkshire Hathaway received $5B worth of warrants to buy GS stock during the financial crisis (October 2008) at a strike price of $115 (43.5M shares) that was to expire October 1, 2013. Buffett exercised the right before expiry to start this long position. GS currently trades at $171.90. Buffett probably chose a cashless conversion whereby the majority of the position was liquidated to realize cash that funded the 12.63M share purchase at the strike price of $115.

Moody's (NYSE:MCO): MCO is a 2.01% of the US long portfolio stake that was decreased by 14% in Q2 2013 at prices between $52.23 and $68.62. It was kept steady in Q3 2013 but was marginally decreased in Q4 2013. The stock currently trades at $91.36. Buffett's cost basis is just over $10 and so he is sitting on large long-term capital gains on this position. The stock returned around 48% in 2013 and has returned ~17% so far this year. Berkshire controls 11.5% of the business.

Viacom (NASDAQ:VIAB) and M&T Bank (NYSE:MTB): These small positions were kept steady over the last six quarters. The stakes are too minor to indicate any clear bias.

The portfolio also has very small (less than 0.5% of the US long portfolio) stakes in the following businesses: Charter Communications (NASDAQ:CHTR), Costco Wholesale (NASDAQ:COST), Deere & Company (NYSE:DE), General Electric (NYSE:GE), Johnson & Johnson (NYSE:JNJ), Kraft Foods Group Inc. (NASDAQ:KRFT), Lee Enterprises (NYSE:LEE), MasterCard Inc. (NYSE:MA), Media General (NYSE:MEG), Mondelez International (NASDAQ:MDLZ), Now Inc. (NYSE:DNOW), Precision Castparts (NYSE:PCP), Sanofi Aventis (NYSE:SNY), Torchmark (NYSE:TMK), United Parcel Service (NYSE:UPS), Verisk Analytics (NASDAQ:VRSK), Visa Inc. (NYSE:V), and Wabco Holdings (NYSE:WBC). Although the relative size of the position is small, Berkshire controls 6.6% of Wabco. The minute position in DNOW was established this quarter as a result of National Oilwell Varco's spin-off of its distribution business. Also, per the annual report, Berkshire has a $1.75B position in Sanofi - so in addition to the 13F securities listed in the spreadsheet, Berkshire also owns Sanofi securities listed in Euronext Paris.

The spreadsheet below highlights changes to Berkshire Hathaway's US stock holdings in Q2 2014:

(click to enlarge)

Source: Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q2 2014 Update