Warren Buffett (Berkshire Hathaway) Stock Portfolio – Update 2012 Q2

Warren Buffett’s Berkshire Hathaway stock holdings for Q2 2012 was filed on 8/14/2012. There was much more activity during the second quarter, with new holdings in National Oilwell Varco and Phillips 66. Increases were made to Bank of New York Mellon, DaVita Inc, DIRECTV, IBM, Lee Enterprises, Viacom, and Wells Fargo. Holdings of CVS, ConocoPhillips, Johnson & Johnson, United Parcel Service, Visa, and Ingersoll-Rand were reduced.  Dollar General, Kraft, Proctor & Gamble, Verisk Analytics, and US Bancorp were also reduced again this quarter. The stake in Intel was sold off.  The filing is for the quarter ended of 6/30/2012:

Berkshire’s New Stock Holdings:

National Oilwell Varco, Inc. [NOV] – A new stake was initiated in the maker of equipment & components used in oil & gas industry. – A total of 2,841,200 shares of National Oilwell Varco were purchased in the second quarter of 2012, and was worth approximately $183 million ($183,087,000) as of 6/30/2012.   Phillips 66 [PSX] – A new stake was initiated in the natural gas & petrochemical company. – A total of 27,163,918 shares of were purchased during the quarter, and was worth approximately $902 million ($902,928,000) as of 6/30/2012.

Berkshire’s Stock Additions:

Bank of New York Mellon Corp. [BK] – Berkshire again increased its stake in the bank by adding 13,112,049 shares (233.8%) up from 5,607,466, bringing the total to 18,719,515 shares. On 6/30/2012, the company’s stake in the bank had a market value of approximately $410 million ($410,893,000). – During the previous quarter (Q1 2012) it had doubled its shares to 3,813,551 (213%) from 1,793,915, to a total of 5,607,466 shares.  The bank was a new holding in Q3 2010.   DaVita Inc [DVA] – Berkshire increased its stake again in DaVita by adding 3,300,000 shares (55.0%) up from 6,000,000 shares, bringing the total to 9,300,000 shares. On 6/30/2012, the company’s stake in the dialysis services company had a market value of approximately $913 million ($913,353,000). – During the previous quarter (Q1 2012) Berkshire more than doubled its stake in the company by adding 3,315,500 shares (124%), from its original 2,684,500 to a total of 6,000,000 shares.  DaVita Inc, was a new holding in Q4 2011.   DIRECTV [DTV] – Berkshire increased its holdings of DIRECTV for the third consecutive quarter, adding 5,421,100 shares (23.6%) up from 22,999,600 shares, bringing its total to 28,420,700 shares. On 6/30/2012, the total value of Berkshire’s holdings in the digital television provider was approximately $1.39 billion ($1,387,498,000). – In the previous quarter (Q1 2012), Berkshire added 2,651,200 shares (13%) from 20,348,400 shares, bringing its Q1 2012 total to 22,999,600 shares. During Q4 2011 Berkshire quadrupled its stake by adding 16,099,000 shares (378.85%) up from its original 4,249,400 shares, with a Q4 2011 total of 20,348,400 shares.  DTV was a new holding in Q3 2011.   International Business Machines [IBM] – Buffett increased Berkshire’s holdings of International Business Machines Corporation for the third consecutive quarter, adding 2,237,596 shares (3.5%) from 64,395,700 shares, bringing its total to 66,633,296 shares. On 6/30/2012, the total value of Berkshire’s holdings in IBM was approximately $13 billion ($13,032,140,000). – During Q1 2012 Berkshire added 489,769 shares (1%), from 63,905,931 shares, bringing its total to 64,395,700 shares. – Buffett increased Berkshire’s holdings of IBM in Q4 2011, to an approximate 5.5% ownership of the company, approximately $12 billion ($11,751,023,000) stake by 12/31/2011.   Lee Enterprises, Incorporated [LEE] – Berkshire nearly doubled its holdings of the newspaper company, adding 1,570,697 shares (94.9%) from 1,655,125 shares, bringing its total to 3,225,822 shares. On 6/30/2012, the total value of Berkshire’s holdings in Lee was approximately $5.2 million ($5,226,000). – On 6/5/2012, Berkshire disclosed a 3% stake in the company in a SEC amendment to the original Q1 2012 filing .  Berkshire had originally requested that confidential treatment be given for its stock purchase of Lee, which was rejected by the SEC on 5/25/2012. – The stake in Lee Enterprises is part of Buffett’s string of newspaper acquisitions made this year.   Viacom Inc [VIAB] – Berkshire more than tripled its stake in the entertainment company by adding 5,221,530 shares (328.1%) up from 1,591,670 shares, bringing the total to 6,813,200 shares. On 6/30/2012, the company’s stake in the company had a market value of approximately $320 million ($320,357,000).  Viacom was a new holding in Q1 2012.   Wells Fargo & Co. [WFC] – Buffett increased Berkshire’s holdings in the bank for the fifth consecutive quarter.  During the second quarter another 16,710,317 shares (4.2%) were purchased, bringing the total number of shares from 394,334,928 to 411,045,245 shares.  Berkshire’s stake in Wells Fargo had a market value of approximately $13.7 billion ($13,745,352,000). – During the previous quarter (Q1 2012) Berkshire increased its holdings by 10,631,300 shares (3%) from 383,703,628 shares to a total of 394,334,928 shares. – Buffett had previously added to his favorite bank during Q4 2011 (22,333,820 shares, 6.18%), Q3 0211 (9,042,200 shares, 2.56%), the Q2 2011 (9,703,683 shares, 2.83%), Q4 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:

CVS Caremark Corp. [CVS] – Berkshire reduced its holdings in the provider of pharmacy healthcare by 1,804,584 shares (-25.4%), bringing its position lower from 7,106,500 shares to a total of 5,301,916 shares.  On 6/30/2012 the company’s stake in CVS had a market value of approximately $248 million ($247,759,000).  CVS was a new holding in Q3 2011.   ConocoPhillips [COP] – Berkshire continued to reduce its holdings in ConcoPhillips, selling by 232,300 shares (-0.8%), lowering its stake from 29,100,937 shares to a total of 28,868,637 shares.  On 6/30/2012 its stake in the company was worth approximately $1.6 billion ($1,613,180,000). – Berkshire had been reducing since Q4 2008.  Buffett mentioned that the company will continue to reduce its stake in ConocoPhillips, in the Berkshire 2008 annual report.   Dollar General Corp. [DG] – Berkshire again reduced its holdings of the discount retailer.  During the quarter it sold 316,279 shares (-8.7%), bringing its position lower from 3,637,164 shares to a total of 3,320,885 shares.  On 6/30/2012 the company’s stake in Dollar General had a market value of approximately $180 million ($180,623,000). – During the previous quarter (Q1 2012) Berkshire sold 860,083 shares (-19%), bringing its stake down from 4,497,247 shares to 3,637,164 shares.  Dollar General was a new stake in Q2 2011.   Johnson & Johnson [JNJ] – Berkshire significantly reduced its long time holdings in J&J by 18,684,999 shares (-64.4%), down from 29,018,127 shares, bringing the total to 10,333,128 shares.  On 6/30/2012, the company’s holdings in the diversified healthcare giant was worth approximately $698 million ($698,105,000).  Buffett had recently been asked about Johnson & Johnson, and mentioned that the company has had too many mistakes/problems (though not enough to cause serious damage to the company).  Whether that had been a factor in his decision or not is unknown.  However, it does provide more capital for both Combs, Weschler, as well as himself to invest with.   Kraft Foods Inc. [KFT] – Berkshire reduced its holdings in Kraft for the 5th consecutive quarter.  During the second quarter it sold 19,190,775 shares (-24.6%), reducing its holding from 78,017,165 shares, bringing the total to 58,826,390 shares.  On 6/30/2012, the company’s holdings in the food manufacturing giant was still worth approximately $2.3 billion ($2,271,875,000). – During the previous quarter (Q1 2012) Berkshire trimmed its holdings by 9,017,548 shares (-10%), from 87,034,713 shares to a total of 78,017,165 shares.  In Q4 2011 (by 2,711,995 shares, -3.02%), Q3 2011 (by 9,720,916 shares, -9.77%), and Q2 2011 (by 5,746,960 shares, -5.46%).   Procter & Gamble Company [PG] – Berkshire again reduced its holdings in P&G during the second quarter by 13,651,933 (-18.6%), down from 73,254,136 shares, bringing the total to 59,602,203 shares.  On 6/30/2012, the company’s holdings in the consumer products giant was still worth approximately $3.65 billion ($3,650,635,000). – In Q1 2012 Berkshire had reduced its holdings in P&G by 3,511,900 shares (-5%), down from 76,766,036 shares, to a total of 73,254,136 shares.   U.S. Bancorp  [USB] – Berkshire reduced its holdings in USB again. During Q2 2012 it sold 3,038,613 shares (-4.4%), down from 69,039,326 shares, bringing the total to 66,000,713 shares.  On 6/30/2012, the company’s holdings in the American bank was worth approximately $2.12 billion ($2,122,583,000). – During the previous quarter (Q1 2012) it reduced its stake in the bank by 100 shares (-0.0001%), down from 69,039,426 shares, to a total of 69,039,326 shares.   United Parcel Service, Inc [UPS] – Berkshire significantly reduced its holdings UPS by 1,167,300 shares (-81.7%), bringing it down from 1,429,200 shares to a total of 261,900 shares.  On 6/30/2012 the company’s stake in the delivery company had a market value of approximately $20.6 million ($20,627,000).

Verisk Analytics [VRSK]:

– Berkshire decreased its holdings in Verisk Analytics by 358,277 (-16.1%) down from 2,230,148 shares, bringing its total to 1,871,871 shares.  On 6/30/2012, the market value of the holding was approximately $92 million ($92,208,000). – During the previous quarter (Q1 2012) its holdings were reduced by 1,214,881 shares (-35%) down from 3,445,029 shares to a total of 2,230,148 shares.   Visa Inc [V] – Berkshire reduced its holdings in the payment processing company significantly by 785,349 shares (-27.4%) down from 2,865,008 shares, bringing its total to 2,079,659 shares.  On 6/30/2012, the market value of the holding was approximately $257 million ($257,108,000).   Ingersoll-Rand PLC [IR] – Berkshire significantly decreased its holdings in the climate control and security products manufacturer by 615,600 shares (-96.8%) down from 636,000 shares, bringing its total to only 20,400 shares.  On 6/30/2012, the market value of the holding was $860,000.

Berkshire’s Stock Sell Offs:

Intel Corp. [INTC] – Berkshire sold off its entire stake in the semiconductor chip maker, eliminating its remaining 7,745,000 shares.  At the end of the previous quarter, its shares were worth approximately $217 million ($217,751,000). – During the previous quarter (Q1 2012) Berkshire reduced its holding by 3,750,000 shares (-33%), decreasing it from 11,495,000 shares to a total of 7,745,000 shares.  However, during Q4 2011 the company added to its holding.  Intel was a new holding in the third quarter of 2011(Q3 2011).

Buffett, Combs, Weschler:

– In a recent interview with Betty Liu on Bloomberg Television last month, Buffett said Weschler and Combs will oversee about $4 billion each.  That is nearly double the amount Buffett previously said at the company’s annual meeting on May 5 2012 ($2.75 billion).  Buffett though, is still responsible for the larger investments. – Stake increases in DaVita were likely Ted Weshcler’s, as he previous held the two holdings prior to joining Berkshire. – CVS, Dollar General, DIRECTV, Intel, and Visa were already in the Berkshire portfolio before Weschler, and it is likely Todd Combs had made those stock moves. Some were also previous investments held by Combs as well. – The stake in Phillips 66 was spun off from ConocoPhillips (May 2012). Buffett, in the Bloomberg Television interview, said that Weschler or Combs made additional purchases above what Berkshire received for its ConocoPhillips stake. – The size of National Oilwell Varco, Phillips 66, and Viacom stakes suggest they are either Combs or Weschler’s picks. – Why did Combs get rid of Intel, and reduce his stake in Visa?  For Visa, the stock has already risen 27% this year and if we look just at the PE (approximately 127x according to Google Finance) it’s likely overvalued now.  Intel on the other hand remains undervalued in my opinion, but its elimination from the portfolio could be due to the coming slowdown & potential decline in electronics demand.  Combs might simply see better opportunities, and not that Intel isn’t a good investment.  This is just my perspective, but there could be a number of reasons. – Buffett who was responsible for the acquisition of IBM shares and the additions to Wells Fargo, is likely responsible for the additions again this quarter.  Older holdings such as ConcoPhilips, Ingersoll-Rand, UPS, and Verisk were likely reduced by Bufffett.  The size of the Johnson & Johnson, Kraft, P&G, and USB holdings suggest he was also responsible for those moves as well.  And as I mentioned, it is likely not that the long time holdings of JNJ, KFT, PG, or USB are bad investments or he doesn’t like the businesses anymore (has recently mentioned on several occasions that he thinks they are strong businesses), but that they have already appreciated significantly over the years, and likely selling them to provide capital to Combs & Weschler as well has to himself in order to allocate towards better opportunities.

SEC Filing:

You can view the 8/14/2012 SEC filing which discloses Berkshire Hathaway stock holdings here: http://www.sec.gov/Archives/edgar/data/1067983/000119312512355534/d392985d13fhr.txt The filing does not differentiate between investments that are made by Berkshire Hathaway, its subsidiaries, Todd Combs, Ted Weschler, 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 [BRK.A /BRK.B], Wells Fargo, U.S. Bancorp, Intel, and Kraft.  I do not plan on acquiring or selling shares, of any of the companies mentioned within this post, within the next 3 trading days.

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):

Thanks and Happy Investing! – The Investment Blogger © 2012

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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