This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway’s (NYSE:BRK.A) (NYSE:BRK.B) 13F stock portfolio on a quarterly basis. It is based on Warren Buffett’s regulatory 13F Form filed on 08/14/2020. Please visit our Tracking 10 Years Of Berkshire Hathaway’s Investment Portfolio article series for an idea on how his holdings have progressed over the years and our previous update for the moves in Q1 2020.
During Q1 2020, Berkshire Hathaway’s 13F stock portfolio value increased ~15% from $176B to $202B. The top five positions account for more than three-quarters of the portfolio: Apple Inc. (NASDAQ:AAPL), Bank of America (NYSE:BAC), Coca-Cola (NYSE:KO), American Express (NYSE:AXP), and Kraft Heinz (NASDAQ:KHC). There are 41 individual stock positions many of which are minutely small compared to the overall size of the portfolio.
Warren Buffett’s writings (PDFs) are a treasure trove of information and are a very good source for anyone starting out on individual investing.
Note: In Q2 2020, Berkshire Hathaway repurchased ~29M Class B Equivalent Shares for a total outlay of ~$5.1B. The average price paid was ~$176. Book Value as of Q2 2020 was ~$163 per share. So, the repurchase happened at ~108% of Book Value. Over the last few quarters, Berkshire has repurchased shares up to ~140% of Book Value. The Class B shares currently trade at ~$211.
New Stakes
Barrick Gold (GOLD): The very small 0.28% of the portfolio GOLD stake was purchased this quarter at prices between $18.50 and $28.25 and the stock currently trades at ~$27.
Stake Disposals
United Continental Holdings (UAL): A minutely small 0.18% UAL position as of Q3 2016 saw a huge ~540% increase in Q4 2016 at prices between $52.50 and $76. 2018 had seen a ~22% selling at prices between $63 and $98. The entire ~8% of the business stake was disposed at ~$28 in April. This is compared to their overall cost basis of ~$55 – lost around half their investment over a holding period of just over three years. The stock currently goes for $36.18.
American Airlines (AAL): AAL stake was first purchased in Q3 2016. The original purchase was at prices between $28 and $39 and doubled in Q4 2016 at prices between $36.50 and $50. The entire ~10% of the business stake was disposed at ~$11 in April. This is compared to their overall cost-basis of ~$40 – lost around 75% of their investment over a holding period of just over three years. The stock is now at $13.33.
Southwest Airlines (LUV): LUV was a ~1% portfolio stake purchased in Q4 2016 at prices between $38.50 and $51 and increased by ~10% in the following quarter at prices between $49.50 and $59. Q2 2018 saw another ~20% stake increase at prices between $50 and $57. The entire ~10% of the business stake was disposed at ~$30 in April. This is compared to their overall cost-basis of ~$42 – lost ~30% of their investment over a holding period of just over three years. The stock is now at $34.90.
Restaurant Brands International (QSR): QSR is a 0.19% of the 13F portfolio position established in Q4 2014 at prices between $35 and $42. It started trading in December 2014 following a merger/rename transaction between Tim Hortons and Burger King Worldwide. The stake was disposed during the quarter at prices between $33 and $60. The stock currently trades at $54.42.
Note: Berkshire’s stake in the business was ~4.2% as of last quarter.
Delta Air Lines (DAL): DAL was a very small 0.19% position in Q3 2016. The stake saw a whopping ~850% increase in Q4 2016 at prices between $39 and $52. There was a ~20% increase in Q2 2018 at prices between $49 and $56 and that was followed with a ~8% increase in Q1 2019 at ~$49.50. The entire ~11% of the business stake was disposed at ~$22 in April. This is compared to their overall cost-basis of ~$44 – lost around half their investment over a holding period of just over three years. The stock currently trades at $28.95.
Goldman Sachs (GS): GS was a minutely small 0.17% of the portfolio stake as of last quarter. It was established in Q4 2013. Berkshire received $5B worth of warrants to buy GS stock during the financial crisis (October 2008) at a strike price of $115 (43.5M shares) that was to expire October 1, 2013. Buffett exercised the right before expiry to start this long position. Recent activity follows: Q3 2018 saw a ~40% stake increase at prices between $220 and $243 while in Q4 2019 there was a ~35% selling at prices between $197 and $232. Last quarter saw another ~85% selling at prices between ~$135 and ~$250. The remainder position was disposed this quarter. GS currently trades at ~$208. Their overall cost-basis was ~$72 per share.
Occidental Petroleum (OXY): The 0.32% of the portfolio OXY stake was purchased in Q3 2019 at prices between $42 and $53 and increased by ~150% next quarter at prices between $37 and $44. The disposal this quarter was at prices between $10.75 and $24.50. The stock currently trades at $14.64.
Note: Berkshire also have warrants to purchase 80M shares of OXY at $62.50 per share. That came about as part of a $10B funding deal (perpetual preferred stock with 8% annual dividend) done in May last year. The dividend was paid in common stock rather than cash in April.
Stake Increases
Liberty SiriusXM Group (LSXMA) (LSXMK): The tracking stock was acquired as a result of Liberty Media’s recapitalization in April 2016. Shareholders received one share of Liberty SiriusXM Group, 0.25 shares of Liberty Media Group and 0.1 shares of Liberty Braves Group for each share held. Berkshire held 30M shares of Liberty Media for which he received the same amount of Liberty SiriusXM Group shares. There was a ~40% stake increase in Q2 2017 at a cost-basis of ~$40 per share. This quarter saw another ~27% stake increase primarily through the $25.47 per share rights offering the company announced in May. The stock currently trades at $35.95.
Note: LSXMA/LSXMK is trading at a significant NAV-discount to the parent’s (SIRI) valuation.
Kroger Co. (KR): KR is a 0.37% of the portfolio position established in Q4 2019 at prices between $24 and $29. This quarter saw a ~15% stake increase at prices between $30 and $34. The stock currently trades at $35.39.
Store Capital (STOR): The 0.29% STOR stake was established in Q2 2017 in a private placement transaction at $20.25 per share. This quarter saw a ~30% stake increase at prices between $14.50 and $26.50. The stock is now at $25.26.
Suncor Energy (SU): The 0.16% SU stake was purchased in Q4 2018 at prices between $26 and $40. Q4 2019 saw a ~40% stake increase at prices between $29 and $33. There was another ~30% stake increase this quarter at prices between $14.25 and $21.30. The stock is now at ~$17.
Note: Suncor Energy has had a roundtrip in the portfolio. It was a 0.48% position purchased in Q2 2013 at prices between $27 and $32. That stake was disposed during Q2 and Q3 2016 at prices between $25.50 and $29.
Stake Decreases
Wells Fargo & Co. (WFC): WFC is now a ~3% of the 13F portfolio position. It is a very long-term stake. Recent activity follows: last year saw a ~25% selling at prices between $43 and $55. This quarter saw another ~27% selling at prices between $22.50 and $33.30. Berkshire’s cost-basis is at ~$24.50 and their ownership stake is ~6%. The stock currently trades at $25.30.
U.S. Bancorp (USB): The 2.40% USB stake has been in the portfolio since 2006. The original position was tripled during the 2007-2009 time frame. It was then kept relatively steady till Q2 2013 when ~17M shares were purchased at prices between $32 and $36. H1 2018 had seen a ~16% increase at prices between $49 and $58 and that was followed with a ~25% increase in Q3 2018 at prices between $50 and $55. The stock is now at $37.78 and Berkshire’s cost-basis is ~$38. They control ~10% of the business. There was marginal selling this quarter.
Bank of New York Mellon Corp. (BK): BK is a 1.38% of the 13F portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.50 and $25. Recent activity follows: 2017 saw a ~180% increase at prices between $43.50 and $55 while 2018 saw another one-third increase at prices between $44.50 and $58.50. The stock currently trades at ~$37.53. There was a ~10% trimming this quarter. Berkshire’s cost-basis on BK is ~$46 per share and ownership stake is ~9%.
Charter Communications (CHTR): CHTR is a 1.31% of the portfolio position. It was established during the last three quarters of 2014 at prices between $118 and $170. In Q2 2015, the position was again increased by ~42% at prices between $168 and $193 and that was followed with another ~21% increase the following quarter at prices between $167 and $195. The stock currently trades at ~$605 compared to Berkshire’s cost-basis of ~$178. The six quarters through Q4 2018 had seen a combined ~25% selling at prices between $250 and $395 and that was followed with a ~20% reduction in Q1 2019 at prices between $285 and $366. Q2 2019 saw a ~5% trimming and that was followed with a ~4% trimming this quarter.
JPMorgan Chase (NYSE:JPM): The ~1% JPM stake was established in Q3 2018 at prices between $104 and $119 and increased by ~40% next quarter at prices between $92 and $115. There was another ~20% stake increase in Q1 2019 at prices between $97 and $107. The stock currently trades at ~$102. This quarter saw a ~60% selling at prices between $84 and $114.
Sirius XM Holdings: The 0.15% SIRI stake was purchased in Q4 2016 at prices between $4.08 and $4.61. Q2 2017 saw selling: ~20% reduction at prices between $4.70 and $5.50. This quarter saw a ~60% selling at prices between $4.50 and $6.50. The stock is currently at ~$6.
PNC Financial (PNC): The 0.28% PNC stake was established in Q3 2018 at prices between $134 and $146 and increased by just over one-third next quarter at prices between $110 and $140. There was a ~40% selling this quarter at prices between $95 and $131. The stock is now at ~$112.
M&T Bank (MTB), Mastercard Inc. (MA), and Visa Inc. (V): These small (less than ~1% of the portfolio each) positions were sold down during the quarter.
Kept Steady
Apple Inc.: AAPL is currently the largest 13F portfolio stake by far at ~44%. It was established in Q1 2016 at prices between $93 and $110 and increased by ~55% the following quarter at prices between $90 and $112. Q4 2016 saw another ~275% increase at prices between $106 and $118 and that was followed with a stake doubling in January 2017 at prices between $116 and $122. There was another ~23% increase in Q4 2017 at prices between $154 and $176 and that was followed with a ~45% increase in Q1 2018 at prices between $155 and $182. Since then, the activity has been minor. The stock currently trades at ~$460.
Note: Berkshire’s overall cost-basis on Apple is ~$141 per share. They have a ~6% ownership stake in the business.
Bank of America: Berkshire established this large (top three) ~11% of the portfolio position through the exercise of Bank of America warrants. The warrants had a strike price of $7.14 compared to the current price of $26.47. The cost to exercise was $5B and it was funded using the $5B in 6% preferred stock they held. There was a ~30% stake increase in Q3 2018 at prices between $27.75 and $31.80 and a marginal increase next quarter. Q2 2019 also saw a ~4% stake increase.
Note: Regulatory filings since the quarter ended show them owning 1.032B shares. This is compared to 925M shares in the 13F report. The increase happened at an average cost of ~$25 per share. Berkshire’s overall cost-basis is ~$14 and ownership stake is ~12%.
American Express and Coca-Cola: These two very large stakes were kept steady during the last ~6 years. Buffett has said these positions will be held “permanently”. Berkshire’s cost-basis on AXP and KO are at around $8.49 and $3.25 respectively and the ownership stakes are at ~18% and ~9.5% respectively.
Kraft Heinz Co.: KHC is currently a fairly large position at 5.13% of the portfolio. Kraft Heinz started trading in July 2015 with Berkshire owning just over 325M shares (~27% of the business). The stake came about because of two transactions with 3G capital as partner: a ~$4B net investment in 2013 for half of Heinz and a ~$5B investment for the acquisition of Kraft Foods Group in early 2015. Berkshire’s cost-basis on KHC is ~$30 per share compared to the current price of $35.59.
Moody’s Inc. (MCO): MCO is a 3.35% of the 13F portfolio stake. It is a very long-term position and Buffett’s cost basis is $10.05. The stock currently trades at ~$281. Berkshire controls ~13% of the business.
DaVita Inc. (DVA): DVA is a 1.49% of the portfolio position that was aggressively built over several quarters in the 2012-13 time frame at prices between $30 and $49. The stock currently trades at ~$82 compared to Berkshire’s overall cost-basis of ~$45 per share. Last quarter saw minor trimming.
Note: Berkshire’s ownership stake in DaVita is ~30%.
VeriSign Inc. (VRSN): VRSN was first purchased in Q4 2012 at prices between $34 and $49.50. The position was more than doubled in Q1 2013 at prices between $38 and $48. The buying continued till Q2 2014 at prices up to $63. The stock currently trades at ~$207 and the position is at 1.31% of the portfolio (~10% of the business). Last quarter saw minor trimming.
General Motors (GM): GM is a 0.93% of the 13F portfolio position that was first purchased in Q1 2012 at prices between $21 and $30. By Q3 2017, the position size had increased by around six-times (10M shares to 60M shares). Q4 2017 saw a reduction: ~17% selling at prices between $40.50 and $46.50. There was a ~38% stake increase in Q4 2018 at prices between $30.50 and $38.50. The stock currently trades at $27.86. Overall, Berkshire’s cost-basis on GM is ~$32. Q4 2019 saw a ~3% stake increase while last quarter there was marginal trimming. Berkshire controls ~5.2% of the business.
Amazon.com (AMZN): AMZN is a 0.73% of the portfolio stake established in Q1 2019 at prices between $1,500 and $1,820 and increased by ~11% next quarter at prices between $1,693 and $1,963. The stock currently trades at ~$3,148. There was marginal trimming last quarter.
Liberty Global PLC (LBTYA) (LBTYK): The position was established in Q4 2013 at prices between $37.50 and $44.50 (adjusted for the 03/2014 stock-split) and increased in the following two quarters at prices between $38.50 and $46. The three quarters through Q1 2016 had also seen a combined ~30% increase at prices between $30 and $50. Q2 2016 saw a ~17% further increase at prices between $27 and $39. The stock is now at $21.54 and the stake is at 0.29% of the 13F portfolio.
Axalta Coating Systems (AXTA): AXTA is a small 0.27% of the portfolio stake established in Q2 2015 at prices between $28 and $36 and increased by ~16% the following quarter at prices between $24.50 and $33.50. The stock currently trades at $23.90. Berkshire owns ~10% of the business.
Teva Pharmaceutical (TEVA): TEVA is a very small 0.26% of the portfolio stake established in Q4 2017 at prices between $11.20 and $19.33 and more than doubled next quarter at prices between $16.50 and $22. The stock currently trades at $11.50.
Synchrony Financial (SYF): SYF is a 0.22% of the portfolio position purchased in Q2 2017 at prices between $26.50 and $34.50 and increased by ~20% the following quarter at prices between $28.50 and $31.25. The stock is now at $24.93. Last quarter saw a ~3% trimming.
Note: Synchrony is the private label credit-card business split-off from GE that started trading in August 2014 at ~$23 per share.
RH Inc. (RH): The 0.21% of the portfolio RH position was established in Q3 2019 at prices between $119 and $174 and increased by ~40% next quarter at prices between $165 and $242. It is now at ~$314. Berkshire controls ~9% of the business.
StoneCo Ltd. (STNE): STNE is a 0.27% position purchased in Q4 2018 at ~$21 per share compared to the current price of $48.21.
Note: Berkshire has an ~11% ownership stake in StoneCo. In October 2018, WSJ reported that Berkshire had invested ~$300M each in two Fintechs – India’s Paytm and Brazil’s StoneCo (STNE). The Paytm investment was made in August 2018 while the STNE purchase was following its IPO in October 2018.
Biogen Inc. (BIIB), Costco Wholesale (COST), Globe Life (GL), Johnson & Johnson (JNJ), Liberty LiLAC Group (LILA) (LILAK), Mondelez International (MDLZ), Procter & Gamble (PG), SPDR S&P 500 Index (SPY), United Parcel Service (UPS), and Vanguard S&P 500 Index (VOO): These very small positions (less than ~0.5% of the portfolio each) were kept steady this quarter.
Note 1: Since November 2015, Warren Buffett is known to own ~8% of Seritage Growth Properties (SRG) at a cost-basis of $36.50 in his personal portfolio. It currently trades at $12.72. SRG is an REIT spinoff from Sears that started trading in July 2015.
Note 2: Berkshire Hathaway also has a 225M share position in BYD Company at a cost-basis of ~$1 per share (~$2 per share in terms of ADRs – OTCPK:BYDDY). The ADR currently trades at $18.82.
The spreadsheet below highlights changes to Berkshire Hathaway’s 13F stock holdings in Q2 2020:
Disclosure: I am/we are long BRK.B, AMZN, KHC, WFC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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