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This article is part of a series that provide an ongoing analysis of the changes made to Berkshire Hathaway's (BRK.A) (BRK.B) US stock portfolio on a quarterly basis. During Q1 2012 Berkshire's US stock portfolio increased in size by 13.83% - from $66.15B to $75.30B. Buffett established two new stakes this quarter which combined account for a modest 0.5% of the portfolio. The growth in size of the US stock portfolio is a combination of portfolio performance and new money additions - the S&P 500 index grew almost 12% during the period. Consistent with Buffett's strategy of holding on to positions for a very long time, majority (23 out of 35) of the positions were left untouched. The other positions were only slightly adjusted.

New stakes:

General Motors (GM): GM, a very small stake (~0.3% of the US stock portfolio), was established this quarter when the price-per-share varied between $20.27 and $27.34. Currently, the stock trades at around $21, near the low-end of the range where Buffett could have bought it. However, the stake is too small to specify clearly a bullish bias.

Viacom (VIAB): VIAB, a petite stake (~0.1% of the US stock portfolio), was established this quarter when the price-per-share varied between $45.41 and $49.38. Currently the stock trades at around $47. The stake is also too minuscule to indicate a bias.

Stake Disposals:

Comdisco Holding (OTCQB:CDCO): CDCO, an insignificant stake (~0.015%), was disposed this quarter. The stock had figured in the portfolio since it emerged from bankruptcy in 2002 - the CDCO debt Buffett owned then was converted to equity.

Stake Increases:

Bank of New York Mellon Corp (BK): BK, a 0.2% of the US stock portfolio stake that has been a presence in the portfolio since 2010, was increased by over 200% this quarter when the price-per-share varied between $19.91 and $24.51. The stock currently trades at ~$21. Even though the stake is still little, the share count has more than tripled. It is likely Buffett is on track towards building a position and the activity shows a mild bullish bias. For investors attempting to shadow Buffett, BK is a good stock to consider.

DaVita Inc (DVA): DVA, a 0.7% of the US stock portfolio position purchased in Q4 2011 when the price-per-share varied between $60.64 and $76.81, was more than doubled this quarter when the price-per-share varied between $75.81 and $90.17. The stock currently trades at ~$82. The company is the dominant player in the dialysis business in the US. A whistle-blower lawsuit against the company alleging fraud by two former employees was allowed to proceed early March.

Directv (DTV): DTV, a significant 1.5% stake established in Q3 2011, was increased this quarter by ~10% when the price-per-share varied between $42.18 and $49.49. The bulk of the stake was built in Q4 2011 when the price-per-share varied between $40.60 and $47.87. The stock currently trades at $46.98 which is within the range Buffett could have bought it at. Buffett has a clear bullish bias toward large media companies and the DTV stake increase endorses that bias.

International Business Machines (IBM): IBM, a huge ~18% stake purchased initially in Q3 2011 when the price-per-share varied between $157.54 and $185.21, was increased by 10% in Q4 2011 and marginally again this quarter. The stock currently trades at $199. Buffett is extremely upbeat on IBM.

Liberty Media Capital (LMCA): LMCA, a petite 0.35% stake established in Q4 2011 when the price-per-share varied between $61.11 and $79.67, was increased by ~75% this quarter when the price-per-share varied between $78 and $90. The stock currently trades at around $84. LMCA is another instance of a large media company that Buffett is building a stake in.

Wal-Mart Stores (WMT): WMT, a significant 3.8% stake picked up first in 2005 and doubled in 2009, was improved by ~20% this quarter when the price-per-share varied between $58.5 and $62.5. The stock currently trades at around $59. The stake increase illustrates a strong bullish bias. For investors attempting to follow Buffett, WMT is a good option.

Wells Fargo Bank (WFC): WFC, a substantial ~18% stake, was increased by ~3% in Q4 2011. WFC, one of Buffet's favorite holdings, is being incrementally increased every quarter.

Stake Decreases:

Dollar General (DG): DG, a 2% stake initiated in Q2 2011 and bulked up in Q3 2011 when the price-per-share varied between $30 and $38, was reduced by almost 25% this quarter when the price-per-share varied between $40.37 and $47.26. The stake reduction indicates a mild bearish bias.

Intel Corporation (INTC): INTC, a ~0.3% stake purchased initially in Q3 2011 when the price-per-share varied between $19.19 and $23.23, was increased by 23% in Q4 2011 when the price-per-share varied between $20.62 and $25.66. This was reduced by one-third this quarter when the price-per-share varied between $24.25 and $28.28. This reduction indicates a mild bearish bias.

Kraft (KFT): KFT holdings were decreased by 10% this quarter. This follows a pattern of incremental stake reduction across several quarters - the position was reduced by 3.1% in Q4 2011 and by 10% in Q3 2011. Berkshire Hathaway's stake in KFT peaked at 138M shares in Q4 2009 and the current stake, valued at ~4% of the portfolio, stands at 78M shares (43.5% decline). Buffett is definitely bearish on Kraft.

Procter & Gamble (PG): PG, a large 6.5% stake, was reduced by ~4.5% this quarter when the price-per-share varied between $62.77 and $67.62. The stock currently trades at $63.72. PG has been in the portfolio since 2005 when Buffett owned 100M shares. The share ownership now stands at 26.75% lower at 73.25M shares. The minor stake reduction this quarter does not indicate a bias.

US Bancorp (USB): USB, a 2.9% stake, was reduced by a pittance (100 shares) this quarter. USB has been in the portfolio since 2006. The stake was doubled in 2007 and since then has been held relatively steady. The relatively large stake indicates a bullish bias.

Verisk Analytics (VRSK): VRSK, a very small 0.15% stake first purchased in Q2 2011 and doubled in Q3 2011, was decreased by ~20% in Q4 2011 and again by another 35% this quarter. Since the lows of Q2 2011, the price-per-share has increased by ~50%. The stake reductions indicate a mild bearish bias.

The rest of the positions have held steady during the quarter.

  • CVS Caremark Corp (CVS), General Dynamics (GD), and Visa (V) were small positions (<0.5% each) that were increased by ~25% each in Q4 2011 but did not see further growth this quarter. Combined, those positions tracked the market very well - V outperformed, GD underperformed, and CVS tracked the market.
  • JNJ, a 2.5% stake reduced by almost a quarter in Q4 2011, was left untouched this quarter. JNJ share price stayed flat during Q1 2012 and that compares to the 12% return in the S&P 500 index.

The spreadsheet below highlights changes to Berkshire Hathaway's US stock holdings in Q1 2012:

(click to enlarge)

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 fund's moves during Q4 2011.

Source: Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q1 2012 Update