Warren Buffett is no stranger to multibillion-dollar investments. The Oracle of Omaha has been beating the market for decades while accumulating positions in some of the world’s most popular companies. Courtesy of the most recent filing, we now have a peek at how the legendary investor has deployed his capital as we run up to 2018.
Many institutional investment managers file their mandatory 13F with the Securities & Exchange Commission (SEC). The filing is a quarterly report of equity holdings required by managers who oversee more than $100 million in qualifying assets and must be filed within 45 days of the end of each quarter. The 13F provides a glance at what firms did in the previous quarter, but investors should keep in mind that hedging and trading strategies of each fund are still unknown.
Buffett’s Berkshire Hathaway made several big changes in the three months ended September 30, 2017. The conglomerate sold off its stake in 21st Century Fox, and increased positions in American Airlines, Southwest Airlines, Apple, Bank of New York Mellon, Liberty Media, and Sirius XM. Berkshire Hathaway sold 5 million shares of its Delta stake.
The largest investments in Berkshire Hathaway’s portfolio include some of the most popular blue chips known to Wall Street. Let’s take a look at Berkshire Hathaway’s top 10 holdings according to dollar value as of November 2017, not including Buffett’s option to purchase 700 million shares of Bank of America at any time prior to September 2021 for $5 billion.
- Buffett’s holding: 24.7 million shares.
The bond credit rating agency is Berkshire Hathaway’s tenth-largest holding at the end of 2017. Buffett and company hold 24.7 million shares, worth $3.8 billion. Moody’s reported a revenue of $3.6 billion in 2016 and has a presence in 36 countries. In the most recent quarter, the company announced an operating income of $443.4 million, which was up 46% from the first quarter of 2016. So, there’s some real money-making potential there.
Next: A bank you’ve probably never heard of
9. U.S. Bancorp
- Buffett’s holding: 85.1 million shares.
The financial industry is no stranger to Buffett. Berkshire Hathaway held 85.1 million shares of U.S. Bancorp at the end of 2017, worth $4.7 billion.
U.S. Bancorp is based in Minneapolis and has nearly half a trillion dollars in assets. It’s the parent company of U.S. Bank National Association, the fifth largest commercial bank in the United States. The Company operates 3,106 banking offices in 25 states and 4,842 ATMs. In October, MONEY named U.S. Bank the Best Big Bank in a tie with TD Bank.
Next: A dinosaur of a company that’s still in the game
- Buffett’s holding: 37 million shares.
An oldie but a goodie, Berkshire Hathaway is holding onto its IBM shares — all 37 million of them. But the current positioning is drastically different than it was in years past. A couple of years ago, for example, the 13F showed that Buffett had 81 million shares, almost twice as many as the current 13F. Still, he seems bullish in that it’s among his 10 biggest holdings. But there does seem to be some worry there.
Next: An oil giant that Buffett once kept secret
7. Phillips 66
- Buffett’s holding: 80.7 million shares.
The multinational American energy company was originally thought to be sold off by Buffett in the second quarter of 2015. As it turns out, Buffett had the stake classified as confidential so it wouldn’t show on the 13F and allow copycat investors to run the price up. Toward the end of 2017, Berkshire Hathaway holds 80.7 million shares (worth $8 billion).
Unlike oil giants Exxon Mobil and Chevron, Phillips 66 has escaped most of the carnage seen in the energy sector. Buffett told CNBC in 2015: “We’re buying it because we like the company and we like the management very much.”
Next: Buffett’s favorite credit card company
6. American Express
- Buffett’s holding: 151.6 million shares.
Warren Buffett has liked American Express since at least the 1960s. Today, the credit card giant is Berkshire Hathaway’s sixth-largest holding. Currently, Berkshire Hathaway holds 151.6 million shares (worth almost $15 billion), unchanged from the prior quarter.
American Express shares have struggled in recent years. Costco severed ties from American Express after 16 years in business with each other. American Express was able to make a deal with Sam’s Club, but it did little to comfort Mr. Market at the time. However, shares found a bottom in early 2016 after touching $50, and are in the green this year. Berkshire Hathaway’s positions in Mastercard and Visa come nowhere close to the size of its American Express position.
Next: One of America’s largest banks
5. Bank of America
- Buffett’s holding: 679 million shares.
It’s not the only bank in the portfolio (of course), but it’s a sizable position. Berkshire Hathaway, as of the end of 2017, holds 679 million shares of Bank of America in one of the biggest changes since last year. The position is worth somewhere between $18-$20 billion, proving that Buffett isn’t scared of coming financial crisis like many are predicting under a new administration.
Next: You’d be hard-pressed to find a sweeter investment.
- Buffet’s holding: 400 million shares.
Coca-Cola is perhaps the most predictable position at Berkshire Hathaway. Buffett is on record saying he will never sell his shares in the world-renowned beverage company, and can often be seen holding a Cherry Coke. At the end of the first quarter, Berkshire Hathaway held the usual 400 million shares of Coca-Cola (worth $18 billion), making it the company’s fourth-largest holding.
While sugar water has seen its fair share of problems over the years, Coca-Cola shares have been experiencing support near $40 since late 2015. Coca-Cola has investments in Monster Beverage, Keurig Green Mountain, and Suja Juice. The company is also making operating changes to drive stronger growth and save $3 billion annually by 2019.
Next: One of the most beloved companies in the world
- Buffett’s holding: 134.1 million shares.
Berkshire Hathaway is completely on the Apple train and now owns 134.1 million shares of the tech giant, worth ~$23 billion, according to the 13F. Despite concerns about growth, Apple doesn’t appear to be slowing down. The company continues to sell millions of iPhones every quarter like clockwork. Furthermore, Apple’s cash hoard of $257 billion will likely continue to reward investors with dividends and share buybacks for years to come.
Next: The most infamous bank in the market. Right now.
2. Wells Fargo
- Buffett’s holding: 464.2 million shares.
America’s second most profitable bank is also Buffett’s second-largest holding. Berkshire Hathaway holds 464.2 million shares (worth ~$27.5 billion) of Wells Fargo at the end of 2017.
Wells Fargo became Buffett’s most controversial holding in last year. The megabank finally admitted it created roughly 2 million fake accounts, which inflated sales numbers and banking fees. Wells Fargo had an incentive program in place that essentially forced employees to commit fraud or risk being fired for underperforming unrealistic sales goals. More than 5,000 workers related to the scandal were fired. Wells Fargo CEO John Stumpf also resigned in the wake of the financial abuse.
More recently, the number of fraudulent accounts has ballooned to as many as 3.5 million.
Finally: A stake worth almost tens of billions
1. Kraft Heinz
- Buffett’s holding: 325.6 million shares.
Berkshire Hathaway’s position in the merged Kraft Heinz has been listed on the 13F for the past couple of years. Buffett teamed up with investment firm 3G Capital to take over Kraft Foods with Heinz. The deal created one of the biggest food companies in history with over ten different brands valued at more than $500 million each. More recently, the company has laid off thousands of workers to cut costs and “consolidate manufacturing across the Kraft Heinz North American network.” It also increased its quarterly dividend.
Buffett and company held 325.6 million shares of Kraft Heinz at the most recent filing, worth more than $25 billion. That makes it Buffett’s largest portfolio holding.
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