Last week, America’s leading hedge fund managers reported their Q4 activities via 13F filings to the SEC. Among those reporting was Warren Buffett, one of the most prolific and well-known investors in the world. So what have Mr. Buffett and his fund, Berkshire Hathaway, been up to?
Here’s a breakdown:
Last year was a banner year for hedge funds in general, as the industry attracted $31 billion worth of net inflows, according to data from HFM. That total included a challenging fourth quarter, in which investors pulled more than $23 billion from hedge funds. HFM reported $12 billion in inflows for the first quarter following Read More
Last quarter, Warren Buffett initiated new positions in Goldman Sachs (NYSE:GS) and Liberty Global PLC.
The billionaire is clearly excited about the prospect of Goldman Sachs, the company now his 12th largest allocation with the purchase of 12.6 million shares (2.14% of his fund). The investment banking leader recently reported record revenues of $34.21 billion and earnings of $8.04 billion.
With the acquisition of 2.94 million shares, Liberty Global has also joined Buffett’s portfolio. The company just announced a billion-dollar share buyback program and has been delivering strong results, including revenue growth of +4% over the past year.
It is also worth noting that Buffett now holds 1.72 million shares of Graham Holdings Company (formerly The Washington Post Company). Amazon’s Jeff Bezos purchased the flagship newspaper – hence the name change – in August 2013.
Buffett increased a total of seven positions last quarter, augmenting his stakes in Wells Fargo & Company (NYSE:WFC), Exxon Mobil (NYSE:XOM), Wal-Mart (NYSE:WMT), U.S. Bancorp (NYSE:USB), DaVita HealthCare Partners (NYSE:DAV), USG (NYSE:USG) and General Electric (NYSE:GE).
Now composing 20.07% of Buffett’s portfolio is Wells Fargo. The billionaire added 326,000 shares last quarter, bringing his WFC total to 463.34 million assets. Buffett’s strategy depends on long-term growth for Wells Fargo, as it expands its foreign loans business and capitalizes on economic recovery at home. Wells Fargo is the second largest allocation of the iBillionaire Index.
Buffett also picked up 1.04 million shares of Exxon Mobile, the energy giant now comprising 3.97% of his fund. This one continues to deliver strong benefits, distributing $26 billion in buybacks and dividends to shareholders despite lowered earnings in 2013.
The billionaire upped the ante in Wal-Mart Stores as well with the acquisition of 236,000 more assets. With the purchase, WMT represents 3.71% of Buffett’s fund. The retailer is slated to report earnings this Thursday – something that will be interesting to watch given the earnings warning it issued at the start of the year.
Other companies in which Warren Buffett increased his positions in Q4 2013 are U.S. Bancorp (now composing 3.06% of his portfolio), DaVita HealthCare Partners (2.2%), USG (0.94%) and GE (0.28%).
U.S. Bancorp is Buffett’s second biggest financial pick for good reasons, including little debt, strong loan growth, and a total of $4 billion (71% of earnings) distributed in dividends. DaVita, of which the billionaire purchased an additional five million shares, has increased +4.73% in 2014 alone.
USG’s shares have soared this year as well, up +20.72% YTD thanks to reports of $915 million in Q4 revenues in 2013 (a +12.3% jump over the same period in 2012). And while GE’s stock value has declined -8.17% this year, it is one of the world’s leading industrial conglomerates and has some important plans ahead. The company is in the process of spinning off its retail banking business unit, GE Capital, and is transitioning towards leaner manufacturing practices.
Buffett has scaled back positions in three companies as well: Moody’s Corp (NYSE:MCO), ConocoPhillips (NYSE:COP) and Starz (NASDAQ:STARZ).
The investor sold off 252,400 Moody’s shares, MCO now composing 1.85% of his portfolio (it previously was at 1.9%). The credit ratings company has had a strong start to the year, up +1.35% YTD and +5.97% over the past three months.
Buffett let go of 2.5 million ConocoPhillips shares, too, the oil giant now representing 0.75% of his holdings. The stock has been struggling as of late, its price having declined -2.75% over the past six months (worth comparing with Exxon, which is up +7.04%).
Starz was the third to go with the sale of 1.08 million shares in Q4. It composes 0.13% of Buffett’s fund (as opposed to 0.17% in Q3) and will deliver financial results on February 21st.
During the fourth quarter of last year, Buffett cashed out on DISH Network (NASDAQ:DISH), unloading all of his 454,000 shares (previously 0.03% of his fund). He got rid of an even smaller stake in GlaxoSmithKline (NYSE:GSK), selling 346,000 assets (0.02% of his portfolio).
Neither company has performed especially poorly lately. In fact, it’s quite the opposite. DISH is up +27.87% over the past semester, and GSK has increased +8.25%, including +4.68% YTD.