Drew Angerer
Berkshire Hathaway (NYSE:BRK.B) (NYSE:BRK.A), the investing behemoth headed by Warren Buffett, will disclose Q3 results of its sprawling operations on Saturday morning.
While the value of its massive portfolio is affected by stock market volatility, the company also owns a broad array of businesses, from Geico insurance, to Dairy Queen restaurants, to the BNSF railroad to natural gas pipelines to metal parts maker Precision Castparts. Overall, the stock has outperformed the market, rising 225% in the past 10 years, compared with the S&P 500's 169% increase.
Investors will be looking to see if the company spent much of its cash during the quarter and how much of it went to buying back its own stock. As of June 30, 2022, the firm had $105.4B of cash and short-term securities. In Q2, it only repurchased ~$1.0B of its common stock, less than half the $3.2B it spent in Q1.
Q3 results will show the company's top equity investments. At June 30, 2022, five companies accounted for ~69% of the company's total investments in equity securities. They were American Express (AXP) with fair value of $21.0B; Apple (AAPL) at $125.1B, Bank of America (BAC) at $32.2B, Coca-Cola (KO) at $25.2B, and Chevron (CVX) at $23.7B.
Of its top five holdings, the only stock that fared worse than the S&P 500's 20% decline in the past year is Bank of America (BAC), which dropped 25%. Meanwhile, Chevron (CVX) provided some buoyancy to the portfolio, driving up 64% in the past year as petroleum prices surged after Russia's invasion of Ukraine pressured energy supplies.
By the end of the quarter, Berkshire (BRK.B) boosted its stake in Occidental Petroleum (OXY) to 194.5M shares, or ~20.9% of Oxy's common stock outstanding. That's valued at almost $12B at Sept. 30's close. But wait, there's more. Buffett also holds 100K shares of Occidental (OXY) series A preferred stock and warrants to buy ~83.9M shares at an exercise price of $59.624 per share.
The quarter won't yet reflect its $11.6B acquisition of specialty insurer Alleghany, as the deal closed on Oct. 19 after Q3 ended.
See why SA contributor Growth at a Good Price thinks Berkshire Hathaway's (BRK.B) winning streak will continue