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 a new 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 ending December 2017. Let’s take a look at Berkshire Hathaway’s top 10 holdings according to dollar value as of December, not including Buffett’s option to purchase 700 million shares of Bank of America at any time prior to September 2021 for $5 billion.
10. Southwest Airlines
- Buffett’s holding: 47.6 million shares
A new appearance at No. 10 on the list is one of several airlines in Buffett’s portfolio. Berkshire Hathaway also owns stakes in American Airlines, Delta, and United, but Southwest is the most valuable. Buffett is holding onto his Southwest stock, which was worth $3.1 billion at the end of 2017.
Next: Another newcomer to Buffett’s top 10
9. Bank of New York
- Buffett’s holding: 60.8 million shares
Buffett and Berkshire Hathaway have huge stakes in several financial stocks, and we’ll cover more of them in a minute. Bank of New York Mellon Corp. is new to the Buffett top 10. He added more than 10 million shares, which were worth $3.2 billion heading into 2018.
Next: A mainstay in Buffett’s portfolio
- Buffett’s holding: 24.7 million shares
The bond credit rating agency moves up from No. 10 to be Berkshire Hathaway’s eighth most valuable holding. Buffett and company hold 24.7 million shares, worth $3.6 billion. Moody’s reported $4.2 billion in revenue for the 2017 fiscal year and has a presence in 36 countries. In the most recent quarter, the company announced an operating income of $462.8 million. Moody’s continues posting strong numbers, so there’s some real money-making potential there.
Next: A bank you’ve probably never heard of
7. U.S. Bancorp
- Buffett’s holding: 87 million shares
The financial industry is no stranger to Buffett. Berkshire Hathaway upped its holding to more than 87 million shares of U.S. Bancorp at the end of 2017, worth $4.6 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.
Next: You’d be hard-pressed to find a sweeter investment.
- Buffett’s holding: 400 million shares
Buying and holding stocks is one of Buffett’s main investing tips. 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 2017, Berkshire Hathaway held the usual 400 million shares of Coca-Cola (worth $14.9 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: Buffett’s favorite credit card company
5. 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 No. 5 on Berkshire Hathaway’s most valuable holdings. Currently, Berkshire Hathaway holds 151.6 million shares worth $15 billion, unchanged from the prior quarter.
American Express shares have struggled in recent years. Costco severed ties with 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. Berkshire Hathaway’s positions in MasterCard and Visa come nowhere close to the size of its American Express position.
Next: A cornerstone bank in Berkshire Hathaway’s holdings
4. 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. The position is worth $20.4 billion, proving that Buffett isn’t scared of a coming financial slump under the Trump administration.
Next: No longer No. 1
3. Kraft Heinz
- Buffett’s holding: 325.6 million shares
Berkshire Hathaway’s position in 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 10 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 $25.3 billion.
The last time Berkshire Hathaway filed its 13F, Kraft Heinz was its most valuable holding. As we’re about to see, there’s been a shakeup at the top.
Next: This bank’s troubles haven’t deterred Buffett.
2. Wells Fargo
- Buffett’s holding: 452.8 million shares
America’s second most profitable bank is also Buffett’s second-largest holding. Berkshire Hathaway holds 452.8 million shares. That total is down from 464.2 million at the last 13F filing, but the value increased to $27.8 billion at the end of 2017.
Buffett’s position on Wells Fargo remains strong despite some troubles for the bank. The megabank finally admitted it created roughly 2 million fake accounts, which inflated sales numbers and banking fees. Later, the number of fraudulent accounts ballooned to as many as 3.5 million.
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.
Next: Berkshire Hathaway’s new No. 1 is one of the most beloved companies in the world.
- Buffett’s holding: 165.3 million shares
Berkshire Hathaway is completely on the Apple train. It went from 134.1 million shares at its previous 13F filing to 165.3 million shares at the end of 2017. The year-end value was $27.9 billion, edging out Wells Fargo for the most valuable holding in the Berkshire Hathaway portfolio.
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.
Additional reporting by Sam Becker and Eric McWhinnie.
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