Warren Buffett (Berkshire Hathaway) Stock Portfolio – Update 2011 Q2



Warren Buffett’s Berkshire Hathaway stock holdings for Q2 2011 was filed on 8/15/2011.  During the second quarter new stakes were made in Dollar General and Verisk Analytics, while the stake in Kraft was reduced. Stakes in MasterCard and Wells Fargo were increased.

Warren Buffet’s Berkshire Hathaway [BRK.A /BRK.B] stock updates for the second quarter of 2011 (End of 6/30/2011):

 

Berkshire’s New Stock Holdings:

Dollar General Corp. [DG]

– A new stake was initiated in Dollar General Corp.  Dollar General is a discount retailer that operates 9,414 small-box stores across 35 states (south, south-west, mid-west, east) and carries both private and national branded (P&G, Kellogg, Coca-Cola, etc) merchandise.  Products offered include seasonal, home, apparel, and consumables.  The company is 71% owned by majority shareholder Buck Holdings L.P., a limited partnership controlled by private-equity firm Kohlberg Kravis Roberts & Co. (KKR & Co.) [KKR].

– A total of 1,497,800 shares of Dollar General were purchased in the 2nd quarter of 2011, and was worth about $51 million ($50,760,000) as of 6/30/2011.  This acquisition adds to the portfolio’s stable of discount retailers which includes Walmart and Costco.

Verisk Analytics Inc. [VRSK]

– Verisk Analytics Inc. is a risk assessment and decision analytics company, that offers services in defining, measuring, and managing risks.  The company provides actuarial & underwriting data, as well as and tools/solutions for the property/casualty insurance industry, which allows customers to make informed decisions and manage risk.

– This is not really a new stake, as most of the holding was in the form of Class B shares that are not traded publicly, which was held prior to Verisk’s initial public offering (IPO) in 2009.

According to Verisk:
“Verisk Analytics has two classes of common stock — Class A and Class B. Both classes are entitled to one vote per share. The Class A shares trade publicly on NASDAQ. The Class B shares do not trade publicly and are transferable only among existing Class B stockholders. Class B (Series 1) shares will convert to freely tradable Class A shares on April 6, 2011. Class B (Series 2) shares will convert to freely tradable Class A shares on October 6, 2011. Until all Class B shares convert to Class A, Class B shareholders elect 3 of Verisk’s 12 directors.”

– A total of 2,101,125 Class A shares of Verisk were held in the second quarter, and was worth approximately $73 million ($72,741,000) as of 6/30/2011.

 

Berkshire’s Stock Additions:

MasterCard Incorporated [MA]

– Berkshire increased its stake in the global payment company by 189,000 shares (87.5%) from 216,000 shares, bringing its total to 405,000 shares.  On 6/30/2011, the total value of Berkshire’s holdings in MasterCard was approximately $122 million ($122,043,000).

– MasterCard was a new holding in the 1st quarter of 2011, and in an interview with Bloomberg Television on 7/8/2011, Buffett implied that it was a purchase made by Todd Combs.  MasterCard was also the second-largest holding at Castle Point Capital Management LLC before Combs joined Berkshire.  However, Buffett has always invested heavily in to financial businesses, especially during difficult economic times. American Express Company [AXP], the other payment company held in the portfolio, was also a Buffett favorite at one time. In the mid 1960’s, a scandal hit AE and Buffett purchased a huge amount of shares in the credit card company.  Past investments in other financial firms include Bank of NY Mellon, Salomon Brothers, US Bancorp, Goldman Sachs, Wells Fargo, M & T Bank, Sun Trust, etc.

Wells Fargo & Co. [WFC]

– Berkshire increased its holdings in the bank by 9,703,683 shares (2.83%), bringing the total number of shares to 352,327,608.  Berkshire’s stake in Wells Fargo was approximately $9.9 billion ($9,886,312,000).

–  The company had last increased its holdings in WFC during the fourth quarter of 2010 (6,215,080 shares, 1.8%), as well as during the 3rd quarter of 2010, and 3 out of 4 quarters in 2009.

 

Berkshire’s Stock Reductions:

Kraft Foods Inc. [KFT]

– Berkshire reduced its holdings of the food manufacturing giant by 5,746,960 shares (5.46%), bringing its total to  99,467,624 shares.  On 6/30/2011, the company’s stake in Kraft was worth $3.5 billion ($3,504,245,000).

– On 8/4/2011 Kraft’s CEO, Irene Rosenfeld, announced plans to split the company in two.  The split would separate the company’s confectionery & snack business (including Cadbury), from its North American grocery business.  Buffett, who was opposed to Kraft’s acquisition of Cadbury (too expensive), told CNBC that he was fine with the proposed separation.

 

Berkshire’s Stock Sell Offs:

None.

 

Wesco Financial Corporation Merger:

– On February 7, 2011, Berkshire Hathaway announced it would acquire the remaining 19.9% of the common shares of Wesco Financial Corporation [WSC] that it didn’t already own, in exchange for Berkshire class B shares or cash (at shareholder’s option). Based on the estimated shareholder’s equity of Wesco as of 1/31/2011, the deal values the 19.9% of Wesco at approximately $547.6 million.  The merger of Wesco with and into a subsidiary of Berkshire was announced on June 24, 2011.

– At the end of the 1st quarter of 2011, Berkshire held 5,703,087 shares or approximately 80% of Wesco, valued at about $2.2 billion ($2,219,641,000) as of 3/31/2011.

– Wesco Financial is an investment & insurance firm lead by Berkshire Hathaway’s vice chairman Charlie Munger, and was considered to be a mini-Berkshire.  The company provides insurance and reinsurance, through its subsidiaries Wesco-Financial Insurance Company and Kansas Bankers Surety, and makes investments in both public and private companies.

 

SEC Filing:

You can view the 8/15/2011 SEC filing which discloses Berkshire Hathaway stock holdings here:
http://www.sec.gov/Archives/edgar/data/1067983/000119312511223118/d13fhr.txt

The filing does not differentiate between investments that are made by Berkshire Hathaway, its subsidiaries, Todd Combs, or Warren Buffett himself (as the chairman and chief executive of the company).  Buffett usually makes his stock investments for Berkshire Hathaway through his insurance arms (Berkshire Hathaway Life Insurance Co. of Nebraska, Columbia insurance Co, GEICO, National Indemnity Co, Wesco Financial, etc.).

 

Full Disclosure:

I am long Berkshire Hathaway, Wells Fargo, US Bancorp, American Express, and Kraft.

 

Recommended Warren Buffett Related Books:

Although its easy to follow and copy Warren Buffett’s stock moves (buys/sells), we only learn of his actions months after it has been done (SEC filing is always later).  We would never know for sure why the move was made or what other reasons were behind it.

Buffett recommends investors who want to learn how he invests, to read books that he specifically endorses and recommends, as well as past Berkshire Hathaway annual reports. The following is list of those few books (I’ve have read these myself and learned to invest like Buffett):

All of the above books are also featured in my Amazon.com and Amazon.ca Associates Store.

Thanks and Happy Investing!  – The Investment Blogger © 2011

Author: The Investment Blogger

I’m a private investor, who developed the “function-centric investing” paradigm. I am an investor who blogs a little here and there, rather than a blogger who invests a little here and there. I'm passionate about investing and sharing investment knowledge!

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1 Comment

  1. Added more details to the Verisk holding.

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