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Berkshire Hathaway Inc. (NYSE: BRK-A) has released its public equity holdings as of December 31, 2017. As Warren Buffett still runs Berkshire Hathaway and as he is one of the richest men alive, Buffett is also considered to be one of the greatest investors of the modern era. Maybe that means his stock picks and the stock picks of those working under him may be interesting to outside investors as well.
24/7 Wall St. has tracked many of the so-called “whale watching” trades made by America’s top investment managers, hedge fund managers, and independent investors. There almost seems to be no greater endorsement in all whale-watching activities than to have a new stake held by Warren Buffett and Berkshire Hathaway.
What matters about the holdings of Buffett at the end of each year is that some investors consider this the top picks of Warren Buffett for the year ahead. The Berkshire Hathaway quarterly SEC filing (13F), which often varies from each quarterly earnings filing, showed the balance as of December 31 as being $191.2 billion in from a total of 14 entities.
In Berkshire Hathaway’s third quarter earnings report, without having the fourth quarter earnings yet, the entire base of all assets among all entities was $681.5 billion and the fair value of all equity securities was listed as $157.65 billion. A quarter ago, that figure of equity securities was listed as having more than $82.2 billion in unrealized gains. For reference on the 13F listed amount, the S&P 500 was last seen up 7.6% from the end of September of 2017 — and that was with the stock market still down about 6% from the all-time highs hit in January of 2018.
As an additional reminder, Buffett’s changes that took place before the end of the fourth quarter were made on average at least one or two months before the recent market volatility rattled investors. And Buffett has already signaled that Berkshire Hathaway has been buying and selling, but he was all in all a net buyer of stocks. He also said he would have chosen a different method of tax reform, but corporate tax reform would be good for the parent Berkshire Hathaway company, its subsidiaries, and would be good for almost all of the companies he invests in.
Investors should keep in mind that Warren Buffett and his team of portfolio managers have made some major changes to their stock holdings over the years. Berkshire Hathaway’s stock holdings are quite different from 10 years ago and significantly different from 20 years ago. We looked at the end of the 2007 annual earnings report, and the market value of all of Buffett’s stocks was $75 billion (with a cost basis of $39.25 billion). The addition of two more portfolio managers in recent years has only made the changes look even more extreme over time.
24/7 Wall St. has highlighted the top holdings of Warren Buffett and we have covered some of the select shares which were added as new positions, which positions were added to, which positions were deleted, and which positions saw some selling but where Berkshire still holds a stake.
American Express Co. (NYSE: AXP) was the same 151.6 million shares as it has been for years. This remains a top holding of Buffett for decades now.
Apple Inc. (NASDAQ: AAPL) was listed as a big increase of 31.2 million shares to a stake of more than 165.33 million shares. That stake had been raised the prior quarter by 3.9 million shares. If you look at the IBM stake, Apple was the likely substitute for a “Buffett tech exposure” trade.
Bank of America Corp. (NYSE: BAC) was a big stake in equities that had been relatively new but it was actually after Berkshire Hathaway converted its debt. That stake is a massive 679,000,000 shares.
Coca-Cola Co. (NYSE: KO) was the same 400 million shares, which is a stake that has not changed in years and years.
International Business Machines Corp. (NYSE: IBM) was Warren Buffett’s own first tech stock to buy, but he’s been gradually selling IBM shares lower and lower. Buffett sold almost 35 million shares during the fourth quarter of 2017, and the old 37.03 million shares at the end of the third quarter went down to just 2.048 million shares at the end of December of 2017.
Kraft Heinz Co. (NASDAQ: KHC) is also a continued massive holding that is outside of the normal book-keeping in the largest stock holdings. Berkshire Hathaway currently holds 325.634 million shares of Kraft Heinz.
The large stake in Phillips 66 (NYSE: PSX) simply does not matter at this point as far as what was said in the 13F Filing. It has just been released in the last day that Buffett sold off a $3+ billion stake to get back under the 10% effective ownership regulatory hurdle.
Wells Fargo & Co. (NYSE: WFC) was a stake that 24/7 Wall St. has seen shrink marginally after the regulatory woes, and that stake is now 6 million shares lower after having been cut by about 3.75 million shares the prior quarter. it’s now a stake of 458.2 million. to a stake of 464.2 million shares.
Several companies saw their stakes added to or saw some selling over the third quarter, seen as follows:
- Bank of New York Mellon (NYSE: BK) was a raised stake, by almost 10.6 million shares, up to 60.818 million shares.
- General Motors Company (NYSE: GM) was a lower stake, with Team Buffett selling 10 million shares down to a 50 million share stake.
- Monsanto Co. (NYSE: MON) was RAISED AGAIN, with a gain to just over 11.7 million shares at the end of 2017. This was a stake of 8.87 million shares at the end of the third quarter and up from 8.04 million shares the previous quarter.
- Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) was listed as a new stake, and the troubled generic pharma stake is roughly 18.875 million shares (ADSs).
- U.S. Bancorp (NYSE: USB) was a stake that was raised marginally in percentage terms, up to up to 87.06 million from 85.06 million shares.
More changes and additional holdings have been highlighted below:
Buffett and his portfolio managers still held rather large airline stakes as of December 31, with only a minor change. These were shown to be in the following:
- American Airlines Group Inc. (NASDAQ: AAL) is a slightly smaller stake of 1 million shares, down to roughly 46 million shares.
- Delta Air Lines Inc. (NYSE: DAL) was the same 53.11 million shares as the third quarter.
- Southwest Airlines Co. (NYSE: LUV) was the same 47.66 million shares as in the third quarter.
- United Continental Holdings Inc. (NYSE: UAL) is 28.21 million shares as in the third quarter.
Other stocks still held by Berkshire Hathaway as of December 31, 2017 have been listed by name only. These are effectively making up the long-term holdings with some slight changes over time:
Axalta Coating Systems Ltd. (NYSE: AXTA)
Charter Communications Inc. (NASDAQ: CHTR)
Costco Wholesale Corp. (NASDAQ: COST)
DaVita Inc. (NYSE: DVA)
Goldman Sachs Group Inc. (NYSE: GS)
Graham Holdings Co. (NYSE: GHC)
Johnson & Johnson (NYSE: JNJ)
Liberty Media Corp. (NASDAQ: LMCA)
Liberty Global PLC (NASDAQ: LBTYA)
M&T Bank Corp. (NYSE: MTB)
Mastercard Inc. (NYSE: MA)
Mondelez International Inc. (NASDAQ: MDLZ)
Moody’s Corp. (NYSE: MCO)
Phillips 66 (NYSE: PSX)
Procter & Gamble Co. (NYSE: PG)
Restaurant Brands International Inc. (NYSE: QSR)
Sanofi (NYSE: SNY) — was a slightly smaller stake, but not enough to make mention of.
Sirius XM Holdings Inc. (NASDAQ: SIRI)
Store Capital Corp. (NYSE: STOR)
Synchrony Financial (NYSE: SYF)
Torchmark Corp. (NYSE: TMK)
United Parcel Service Inc. (NYSE: UPS)
U.S. Bancorp (NYSE: USB)
USG Corp. (NYSE: USG)
Verisign Inc. (NASDAQ: VRSN)
Verizon Communications Inc. (NYSE: VZ) (tiny leftover stake)
Verisk Analytics Inc. (NASDAQ: VRSK)
Visa Inc. (NYSE: V)
Wal-Mart, Inc. (NYSE: WMT)