Warren Buffett is widely regarded as one of the most successful investors in the world. He is the chairman and CEO of Berkshire Hathaway (BRK.A), which averaged an annual growth in book value of about 20% to its shareholders for the last 44 years. Ordinary investors follow Warren Buffett’s investments, so do seasoned professional money managers – they even invest their clients’ funds in Berkshire Hathaway stock. Berkshire Hathaway stock had a total return of 76% from 2000 to 2010 versus a negative 11.3% for S&P 500 (SPY). It still makes sense to imitate Buffett’s stock picks.
Berkshire Hathaway just released its third-quarter holdings. Let’s see the new moves of this company.
Berkshire Hathaway disclosed owning $10 billion in IBM stock at the end of September. It did not report holding any IBM shares last quarter. The IT company reported sales of $26.2 billion for the third quarter of 2011, up 7.8% from the same quarter last year, but still a bit lower than the $26.3 billion predicted by analysts. Third-quarter earnings were $3.28 per share, beating the $3.22 per share expectation. IBM returned 7.57% since the end of September. Ken Fisher also had over $300 million IBM stock.
Buffett also opened new positions in Intel Corp (INTC). His company initiated a brand new $199 million in the stock. For the 13 weeks ending October 1, Intel reported revenue of $14.2 billion, up from $11.1 billion for the same period a year ago. Net income was $3.47 billion, compared with $2.96 billion last year. Since the end of September, INTC returned 16.45%. Ken Fisher and Jean-Marie Eveillard both invested about $400 million in INTC.
Visa Inc (V), CVS Caremark (CVS), Directv (DTV), and General Dynamics(GD) are four other new positions in Buffett’s portfolio. Buffett disclosed owning $196 million, $190 million, $180 million and $174 million respectively of these stocks. These four new positions generated a weighted average return of 12.21% since the end of September, versus 10.88% for SPY during the same period.
Over the third quarter, Buffett largely increased his position in Dollar General (DG) by 235% to $170 million. Dollar General is a discount retailer. It offers a selection of merchandise, including consumables, seasonal, home products and apparel. The company reported revenue of $3.58 billion for the 13 weeks ending July 29, 2011, versus $3.21 billion for the same period last year. Net income was $146.04 million, up from $141.19 million a year ago. DG returned 5.19% since the end of September. Stephen Mandel’s Lone Pine Capital also had $500+ million invested in DG.
Buffett also largely increased his position in Verisk Analytics (VRSK) by 101% to $146 million in the third quarter. Verisk serves its customers by supplying data that, combined with its analytic methods, creates embedded decision support solutions. The company reported third-quarter revenue of $340 million, up from $287 million a year ago. Net income also increased to $70.99 million from $62.88 million. VRSK returned 7.10% since the end of September. D. E. Shaw also had $100+ million invested in VRSK.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
