Warren Buffett’s Berkshire Discloses $3.7B Stake In Exxon

Warren Buffett’s Berkshire Discloses $3.7B Stake In Exxon
By USA White House [Public domain], via Wikimedia Commons

Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) has accumulated a massive stake in Exxon Mobil Corp. (NYSE:XOM). According to the Omaha-based company’s latest 13F filing with the SEC, it owns 40.1 million shares of the oil giant as of September 30. At Exxon Mobil’s current market price, the shares are worth more than $3.74 billion. Though it represents only 0.92% of Exxon Mobil’s shares, it shows Warren Buffett has a strong belief in the company.

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Warren Buffett explores Exxon again

Warren Buffett has accumulated the Irving, Texas-based company’s shares in the past. During the third quarter of 2009, Buffett purchased Exxon Mobil Corp. (NYSE:XOM) shares worth $100 million. But he offloaded 70% of them in early 2010, and the remaining shares in 2011. Warren Buffett is a long-term investor, so him getting in and out of the stock so quickly surprised the markets. Experts say Buffett decided to sell the stock after Exxon Mobil announced plans to acquire XTO Energy for $41 billion, including XTO’s $41 billion debt.

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But he began accumulating the stock again this year. About 75% of his holding in Exxon Mobil Corp. (NYSE:XOM) was added during the June quarter itself. But Warren Buffett requested that the SEC keep that information confidential. The SEC sometimes allows an influential investor to withhold information to prevent copycat investing as they add or reduce their holdings.

Warren Buffett sells ConocoPhillips

Exxon Mobil Corp. (NYSE:XOM) appears cheap at its 11.8x forward EPS. Its forward earnings ratio was even lower while Warren Buffett built his stake, 10.8x in Q3 and 11.3x in Q2. It also pays an attractive 2.67% dividend. While Buffett was bullish on Exxon Mobil, he slashed his stake in ConocoPhillips (NYSE:COP) by 44% to 13.53 million shares. It represents less than $1 billion in value. In 2009, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) had posted heavy losses due to a heavy decline in ConocoPhillips. Buffett apologized to investors for his gruesome mistake.

Warren Buffett’s big four

At Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), large investments are made by Warren Buffett. Portfolio managers Ted Weschler and Todd Combs make other investments. Regulatory filings don’t reveal who decided to purchase which stock. But the size of Exxon Mobil Corp. (NYSE:XOM) holding shows that Warren Buffett himself made this decision.

As of September 30, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) has $104.9 billion of equities. Warren Buffett’s big four holdings The Coca-Cola Company (NYSE:KO), American Express Company (NYSE:AXP), Wells Fargo & Co. (NYSE:WFC) and International Business Machines Corp. (NYSE:IBM) made up $58.4 billion of his total holdings.

Exxon Mobil Corp. (NYSE:XOM) shares rose 1.12% to $94.26 at 10:32 AM EDT.

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