While most investors were focused on the release of the July inflation report last week, they may have missed the most insightful data dump of the third quarter.
On August 14, institutional investors with at least $100 million in assets under management were required to file Form 13F with the Securities and Exchange Commission. A 13F is the filing that alerts investors to the stocks, exchange-traded funds and (sometimes) options that Wall Street’s smartest money managers bought and sold during the most recent quarter (in this case, the quarter that ended in June).
No asset manager gets more attention on Wall Street than Berkshire Hathaway‘S (NYSE: BRK.A)(NYSE: BRK.B) Billionaire CEO Warren Buffett. That’s because Buffett has overseen a more than 5,387,000% increase in his company’s Class A shares (BRK.A) since he became CEO in 1965. When you’re running laps around Wall Street’s major stock indexes, investors from all walks of life will want to hitch a ride on your shoulders.
According to Berkshire’s latest 13F, the aptly named “Oracle of Omaha” and his investment lieutenants, Todd Combs and Ted Weschler, oversee a portfolio of 45 stocks spread across $314 billion in invested assets. Note that this figure excludes the two index funds in which Berkshire currently holds small positions — the Vanguard S&P 500 ETF And SPDR S&P 500 ETF Confidence — because index funds consist of baskets of securities and are not stocks themselves.
Below is a comprehensive overview of Warren Buffett’s portfolio at Berkshire Hathaway.
Buffett’s portfolio is heavily concentrated in eight core investments
At a quick glance, you might think that Buffett, Combs and Weschler are well diversified, given that their firm has $314 billion spread across 45 stocks — but you’d be wrong. In fact, more than 79% of Berkshire’s invested assets can be traced to eight core holdings.
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Apple (NASDAQ: AAPL): $90,420,000,000 in market value (as of August 16)
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American Express: $38,161,929,297
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Bank of America (NYSE: BAC): $37,075,191,558
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Coca Cola: $27,672,000,000
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Chevron (NYSE: CVX): $17,467,773,342
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Occidental Petroleum (NYSE: OXY): $14,706,768,598
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Moody’s: $11,513,878,788
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Kraft Heinz: $11,273,477,399
While Berkshire’s team has been big net sellers of stocks over the past seven quarters, these eight investments make it clear that Buffett prefers to invest a large percentage of his company’s capital in his best ideas.
Perhaps the biggest surprise here is that energy stocks make up a double-digit percentage of invested assets. Buffett has overseen the purchase of more than 255.2 million shares of Occidental Petroleum since the beginning of 2022 and also owns about 118.6 million shares of Chevron.
Historically, energy stocks haven’t played a significant role in Buffett’s portfolio. But in the wake of the COVID-19 pandemic, several years of capital underinvestment by global energy giants (including Chevron) have led to tight global oil supplies. When supplies of a coveted commodity are tight, it often means its spot price gets a boost. Occidental Petroleum, in particular, generates the majority of its revenue from its drilling segment and would be a significant beneficiary of a sustained higher spot price for crude.
It’s worth noting that since October 1, 2023, Buffett and his team have sold over 500 million shares of their largest holding company, Apple, and they recently dumped over $3.8 billion worth of Bank of America stock over 12 consecutive trading sessions (July 17 – August 1).
Although it is very Unlikely Buffett has lost confidence in the management teams at both companies, with Berkshire sitting on huge unrealized profits in Apple and Bank of America. With the stock market at historically expensive levels and Buffett opining at his company’s annual shareholder meeting in May that he believes corporate tax rates will rise, locking in some profits makes perfect sense.
The Oracle of Omaha has 20 additional billion-dollar bets
While the lion’s share of Berkshire Hathaway’s invested assets can be traced to the aforementioned eight brand-name companies, that doesn’t mean there aren’t big bets elsewhere. As of the closing bell on August 16, there were 20 holdings valued between $1.2 billion and $7.4 billion.
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Fatty (NYSE: CB): $7,391,306,883
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Mitsubishi (OTC: MSBHF)(OTC: MTSU.Y): $7,357,559,195
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Itochu (OTC: ITOCY)(OTC: ITOCF): $5,744,464,819
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DaVita: $5,425,164,171
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Mitsui (OTC: MITSY)(OTC: MITSF): $5,390,943,959
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Citigroup: $3,392,030,536
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Kroger: $2,659,500,000
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Marubeni (OTC: MARUY): $2,416,778,056
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Sumitomo (OTC: SSUM.Y)(OTC: SSUM.F): $2,388,438,078
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VeriSign: $2,305,016,154
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Visa: $2,218,574,855
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MasterCard: $1,869,259,514
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Amazon: $1,770,600,000
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by D: $1,550,124,061
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Liberty Sirius XM Group Series C (NASDAQ: LSXMK): $1,540,063,734
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Now Holdings: $1,509,303,667
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Capital A Financial: $1,370,346,897
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Aon: $1,361,405,000
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Communication Charter: $1,352,803,145
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Ally Financial: $1,218,870,000
One of the interesting quirks of Buffett’s “other” billion-dollar investments is that this section includes five of the eight companies he described as “indefinite” holdings in his most recent annual letter to shareholders.
In addition to his long-standing holdings Coca-Cola and American Express, and Occidental Petroleum, Buffett listed five Japanese trading houses (Mitsubishi, Itochu, Mitsui, Marubeni and Sumitomo) as forever-type holdings for his company. The only reason Buffett hasn’t bought even larger stakes in these companies is because he needs to keep Berkshire Hathaway’s stake in all five companies below 10%.
The “why” behind Mitsubishi, Itochu, Mitsui, Marubeni and Sumitomo has everything to do with the fact that these companies are cyclical and cheap. The Oracle of Omaha is a big fan of diversified companies that can benefit from long periods of economic expansion. When those companies have single-digit price-earnings ratios, robust capital return programs and CEOs with reasonably low compensation packages, Buffett is usually a happy camper.
There’s also a significant presence of financial stocks among Buffett’s multibillion-dollar holdings. That’s where insurer Chubb comes in, the confidential stock that Berkshire’s brightest minds began building a position in last summer. Insurers typically have strong premium-setting power, and they’ve benefited in particular from higher net interest income on their float (i.e., premiums collected but not paid out through claims) over the past two years.
Warren Buffett’s Smaller Assets
To round it all out, the approximately $314 billion portfolio managed by Buffett, Combs and Weschler also includes 17 “smaller” holdings, whose market value ranges from just over $9 million to as much as $918 million.
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T-Mobile: $918,328,320
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Liberty Sirius XM Group Series A (NASDAQ: LSXMA): $774,712,462
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Liberty Formula 1 Series C: $594,705,952
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Louisiana Pacific: $561,167,725
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Liberty Live Series C: $430,810,903
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Floor & Decor: $418,352,588
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Sirius XM Holdings (NASDAQ: SIRI): $398,634,639
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Ulta Beauty (NASDAQ: ULTA): $260,328,686
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HEICO class A: $195,471,660
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Liberty Live Series A: $192,282,833
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NVR: $96,329,150
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Diageo: $29,293,205
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Liberty Latin America Serie A: $25,650,222
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Jefferies Financial Group: $24,946,927
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Lennar Class B: $24,352,017
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Liberty Latin America Serie C: $12,570,556
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Atlanta Braves Holdings Series C: $9,370,726
If there’s one thing that’s clear from these sub-$1 billion bets, it’s that these companies were likely purchased and/or are actively controlled by Combs and Weschler.
For example, Wall Street has been crowing about Berkshire’s purchase of more than 690,000 shares of Ulta Beauty following the release of Berkshire’s second-quarter 13F earnings. While Ulta’s chain of beauty stores has been a popular entry point for a number of beauty products, cosmetics falls well outside the realm Buffett is focusing his scrutiny on. This makes it highly likely that Combs and/or Weschler were behind this transaction.
You can also see a potential arbitrage opportunity play out between these smaller holdings. Notably, Berkshire’s stake in Sirius XM Holdings has more than tripled over the past three months. By the end of September, Sirius XM is expected to complete its merger with Liberty Media’s Sirius XM tracking stock, Liberty Sirius XM Group, to create a single class of stock. Sirius XM will also execute a 1-for-10 reverse split upon completion of the merger.
Price differences between Sirius XM and Liberty Sirius XM Group could potentially give Buffett and his investment agents an opportunity to profit.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Ally is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool board of directors. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has positions in Amazon, Bank of America, Mastercard, Sirius XM and Visa. The Motley Fool has positions in and recommends Amazon, Apple, BYD Company, Bank of America, Berkshire Hathaway, Chevron, Jefferies Financial Group, Lennar, Mastercard, Moody’s, NVR, Ulta Beauty, Vanguard S&P 500 ETF, VeriSign and Visa. The Motley Fool recommends Diageo Plc, Heico, Kraft Heinz, Kroger, Nu Holdings, Occidental Petroleum, and T-Mobile US and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
These Are All 45 Stocks Warren Buffett Holds For Berkshire Hathaway’s $314 Billion Portfolio was originally published by The Motley Fool
