Warren Buffett (Berkshire Hathaway) Stock Portfolio – Update 2012 Q4

Berkshire Hathaway Report 07

Warren Buffett’s Berkshire Hathaway stock holdings for Q4 2012 was filed on 2/14/2013. There was a lot activity during the final quarter of 2012, with new holdings in Archer Daniels Midland and Verisign.  Increases were made to DaVita, DIRECTV, General Motors,  IBM, Liberty Media, National Oilwell Varco, Precision Castparts, Wabco Holdings, Walmart, and Wells Fargo.  Stakes in Johnson & Johnson, Kraft, Mondelez, and Lee Enterprises were reduced this quarter.  The filing is for the quarter ended 12/31/2012:

 

Berkshire’s New Stock Holdings:

Archer Daniels Midland Company [ADM]

- A new stake was initiated in agricultural manufacturing giant.
- A total of 5,956,600 shares of Archer Daniels Midland were purchased during the quarter, and was worth approximately $163 million ($163,151,000) as of 12/31/2012.

 

VeriSign Inc [VRSN]

- A new stake was initiated in the internet infrastructure services company.
- A total of 3,685,700 shares of VeriSign were purchased during the quarter, and was worth approximately $143 million ($143,079,000) as of 12/31/2012.

 

Berkshire’s Stock Additions:

DaVita Inc [DVA]

- Berkshire again increased its stake in DaVita significantly by adding 3,410,366 shares (33.44%) up from 10,197,569 shares, bringing the total to 13,607,935 shares as of 12/31/2012. The company’s stake in the dialysis services company had a market value of approximately $1.5 billion ($1,504,085,000) for Q4.
- Berkshire has been continuing its trend of adding shares.  It had added shares nearly every 2 weeks in January 2013 after the fourth quarter of 2012 ended, and twice in February already.   The latest SEC filings show purchases made on 2/5/2013 of 32,376 more shares at an average price of $115.1731.  Purchases were also made on Feb 14, 15, and 19 of 323,070 more shares at an average price of $116.73 ($37 million).
- Including the January & February purchases, the total holding has increased an additional 765,044 shares (5.62%) to 14,372,979 shares as of 2/19/2013.  On 2/19/2013 the company’s stake in DVA had a market value of approximately $1.67 billion ($1,665,828,266).
- During the previous quarter (Q3 2012) Berkshire added 897,569 shares (9.65%) up from 9,300,000 shares, bringing the total to 10,197,569.  After the third quarter, the company continued to buy 2,095,484 more shares (20.5%), bringing its total to 12,293,053 shares as of 11/26/2012.
- In Q2 2012 the company purchased 3,300,000 shares (55%), from 6,000,000 to a total of 9,300,000 shares.
- In Q1 2012 Berkshire more than doubled its stake 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 fifth consecutive quarter, adding 4,481,900 shares (15.16%) up from 29,555,600 shares, bringing its total to 34,037,500 shares. On 12/31/2012, the total value of Berkshire’s holdings in the digital television provider was approximately $1.7 billion ($1,707,321,000).
- During the previous quarter (Q3 2012) 1,134,900 shares were added (3.99%) up from 28,420,700 shares to 29,555,600 shares.
- In Q2 2012 5,421,100 shares were added (23.6%) up from 22,999,600 shares to 28,420,700 shares.
- In the first 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.

 

General Motors Company [GM]

- Berkshire increased its stake in the Detroit based global automotive manufacturer, adding 10,000,000 shares (66.67%) up from 15,000,000 shares, bringing its total to 25,000,000 shares. On 12/31/2012, the total value of Berkshire’s holding in GM was approximately $720 million ($720,750,000).
- During the previous quarter (Q3 2012) Berkshire added 5,000,000 shares (50%) up from 10,000,000 shares to 15,000,000 shares. CORRECTION: On 9/30/2012, the total value of Berkshire’s holding in GM was approximately $341 million ($341,250,000).  PREVIOUS: In the Q3 2012 article I reported the market value was $113,750,000 which was incorrect.
- A new stake was initiated GM during the first quarter (Q1 2012).

 

International Business Machines [IBM]

- For the fifth consecutive quarter, Buffett increased Berkshire’s holdings of International Business Machines, adding 597,588 shares (0.88%) up from 67,517,896 shares, bringing its total to 68,115,484 shares. On 12/31/2012, the total value of Berkshire’s holdings in IBM was approximately $13 billion ($13,047,521,000).
- During the previous quarter (Q3 2012) Buffett added 872,500 shares (1.3%) up from 66,645,396 shares to 67,517,896 shares.
- In Q2 2012 Buffett added shares for the third consecutive quarter with 2,237,596 more shares (3.5%) up from 64,395,700 shares.
- 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.

 

Liberty Media Corp [LMCA]

- Berkshire increased its stake in Liberty Media Corporation by 122,340  shares (2.24%), bringing it up from 5,500,000 shares to a total of 5,622,340 shares.  On 12/31/2012, the company’s stake in the media, communications, and entertainment company had a market value of approximately $652 million ($652,248,000).
- PREVIOUSLY MISSING: During Q2 2012, Berkshire increased its stake by 2,500,000 shares (83%) from 3,000,000 shares to 5,500,000 shares.
- During Q1 2012 Berkshire increased its stake by 1,298,600 shares (76%), bringing it up from 1,701,400 shares to a total of 3,000,000 shares.
- Liberty Media was a new holding in Q4 2011.

 

National Oilwell Varco, Inc. [NOV]

- Berkshire increased its stake in National Oilwell Varco, adding 1,108,000 shares (26.46%) up from 4,186,800 shares, bringing its total to 5,294,800 shares. On 12/31/2012, the total value of Berkshire’s holding in the maker of equipment & components used in the oil & gas industry, had a market value of approximately $361 million ($361,899,000).
- During the previous quarter (Q3 2012) Berkshire nearly doubled its stake by adding 1,345,600 shares (47.36%) up from 2,841,200 to 4,186,800 shares.
- The holding was a new stake in the second quarter (Q2 2012).

 

Precision Castparts Corp. (PCP) [PCP]

- Berkshire increased its stake in the metal components & products manufacturer, adding 728,435 shares (58.32%) up from 1,248,901 shares, bringing its total to 1,977,336 shares. On 12/31/2012, the total value of Berkshire’s holding in Precision Castparts, had a market value of approximately $374 million ($374,547,000).
- The holding was a new stake in the previous quarter (Q3 2012).  An initial stake of 1,248,901 shares was worth approximately $204 million ($203,996,000) as of 9/30/2012.

 

WABCO Holdings Inc. [WBC]

- Berkshire increased its stake in the manufacturer of electronic, mechanical, and mechatronic components for the automotive industry (truck, trailer, bus, car), adding 2,472,861 shares (154.64%) up from 1,599,064 shares, bringing its total to 4,071,925 shares. On 12/31/2012, the total value of Berkshire’s holding in Wabco had a market value of approximately $265 million ($265,448,000).
- The holding was a new stake in the previous quarter (Q3 2012).  A initial stake of 1,599,064 shares was worth approximately $92 million ($92,235,000) as of 9/30/2012.

 

Wal-Mart Stores Inc [WMT]

- Berkshire increased its the discount retailer, adding 793,040 shares (1.69%) up from 46,708,142 shares, bringing its total to 47,501,182 shares. On 12/31/2012, the total value of Berkshire’s holding in Walmart had a market value of approximately $3.24 billion ($3,241,007,000).
- In Q1 2012 Berkshire increased its stake by 7,671,000 shares (20%) from 39,037,142 shares to 46,708,142 shares.

 

Wells Fargo & Co. [WFC]

- Buffett increased Berkshire’s holding in the bank for the seventh consecutive quarter, and the 12th time in 4 years.  During the fourth quarter another 17,308,316 shares (4.09%) were purchased, bringing the total number of shares from 422,549,545 to 439,857,861 shares.  Berkshire’s stake in Wells Fargo had a market value of approximately $15 billion ($15,034,342,000).
- During the previous quarter (Q3 2012) Buffett added 11,504,300 shares (2.79%) bringing the total number of shares from 411,045,245 to 422,549,545 shares.
- During the second quarter (Q2 2012) Buffett increased Berkshire’s holding by another 16,710,317 shares (4.2%) from 394,334,928 to 411,045,245 shares.
- During the first quarter (Q1 2012) Berkshire’s stake in WFC increased 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:

Johnson & Johnson [JNJ]

- Berkshire again reduced its long time holdings in J&J by 164,928 shares (-33.52%), down from 492,028 shares, bringing the total to just 327,100 shares.  On 12/31/2012, the company’s holdings in the diversified healthcare giant was worth approximately $23 million ($22,930,000).
- During the previous quarter (Q3 2012) Berkshire reduced its holdings significantly by 9,841,100 shares (-95.2%), down from 10,333,128 shares to 492,028 shares.
- In Q2 2012 its stake was reduced by 18,684,999 shares (-64.4%), down from 29,018,127 shares, bringing the total to 10,333,128 shares.

 

Kraft Foods Group Inc. [KRFT] and Mondelez International Inc [MDLZ]

- Following the spinoff of Kraft Foods Group Inc [KRFT] (North American grocery business) from Mondelez International Inc [MDLZ] (candy & snacks business) formerly Kraft Foods Inc [KFT], Berkshire would have received 10,154,783 of the new Kraft Foods Group Inc shares and 30,464,350 of Mondelez International Inc.

- Berkshire reduced its holding in Kraft Foods Inc by 8,486,069 shares (-83.56%), down from 30,464,350 shares, bringing the total to just 1,668,714 shares.  On 12/31/2012, the company’s holdings in the Kraft grocery business was worth approximately $75 million ($75,877,000).

- Berkshire also reduced its stake in Mondelez by 17,623,900 shares (-57.85%), down from 30,464,350 shares, bringing the total to 12,840,450 shares.  On 12/31/2012, the company’s holdings in the snacks business was worth approximately $326 million ($326,831,000).

- During the previous quarter (Q3 2012) Berkshire did not sell or reduce its holdings in the new Kraft Foods Group or Mondelez International Inc [MDLZ], as the spin-off did not yet take place during the reporting period.
- In Q2 2012 Berkshire reduced its holdings in Kraft (for the 5th consecutive quarter), selling 19,190,775 shares (-24.6%), reducing its holding from 78,017,165 shares, bringing the total to 58,826,390 shares.
- In Q1 2012 (by 9,017,548 shares, -10%), 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%).

 

Lee Enterprises, Incorporated [LEE]

- Berkshire again significantly reduced its holdings in the newspaper company by 1,041,857 shares (-92.14%) from 1,130,720 shares, bringing its total to 88,863 shares. On 12/31/2012, the total value of Berkshire’s holdings in Lee was approximately $101,000.
- During the previous quarter (Q3 2012) Berkshire significantly reduced its stake by 2,095,102 shares (-64.9%) from 3,225,822 shares, to 1,130,720 shares.
- In Q2 2012 Berkshire nearly doubled its holdings and added 1,570,697 shares (94.9%) up from 1,655,125 shares, bringing its total to 3,225,822 shares.
- 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.

 

Berkshire’s Stock Sell Offs:

None.

 

H.J. Heinz Company [HNZ] Acquisition:

- The takeover deal of Heinz by Berkshire and private equity firm 3G Capital was filed on 2/14/2013, the same day as the 13F for the fourth quarter of 2012.  The deal has yet to gain regulatory approval, but if approved Heinz would operate as a private company and the shares would be delisted.  Heinz would therefore not appear in the future stock portfolio (13F) filings.
- Berkshire & 3G Capital offered Heinz shareholders $72.50 in cash for each share ($23.3 billion), a 20% premium to the 2/13/2013 closing price of $60.48.  The deal is worth $28 billion, and includes the assumption of Heinz’s outstanding debt.
- However in the deal Berkshire expects to invest $12.12 billion to acquire a package of equity securities (preferred and common stock and warrants) whereby the preferred stock will have a liquidation preference of $8 billion and pay a 9% dividend.

- The deal is currently coming under SEC scrutiny and also now FBI investigation, due to potential insider trading of options by unknown traders using the “GS Account” the day before the deal was announced.

“The Securities and Exchange Commission today obtained an emergency court order to freeze assets in a Zurich, Switzerland-based trading account that was used to reap more than $1.7 million from trading in advance of yesterday’s public announcement about the acquisition of H.J. Heinz Company.”.

The full SEC statement made on 2/15/2013:
http://www.sec.gov/news/press/2013/2013-24.htm

 

 

Buffett, Combs, Weschler:

- During the second quarter of the year Buffett said Weschler and Combs would oversee about $4 billion each, nearly double the amount Buffett previously said at the company’s annual meeting earlier in the reporting year (May 5 2012).  Buffett though, is still responsible for the larger investments (IBM, WFC) and likely the older holdings (JNJ, KRFT, MDLZ).
- Stake increases in DaVita were likely Ted Weshcler’s, as he previous held it prior to joining Berkshire.  This is one of the more interesting holdings as Berkshire continued to add to DVA continuously ever since it became a holding.  The holding has now become worth over $1.67 billion alone.
- DIRECTV was 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 size of GM, PCP, WBC, NOV, stakes suggest they are either Combs or Weschler’s picks.
- It has been revealed that Weschler was also responsible for putting together the newspaper deals.  It will be interesting to see if Weschler will help Berkshire put together a deal for DaVita.

- As I mentioned in previous summaries, it is likely that the long time holdings of JNJ, KRFT/MDLZ, were not bad investments and does not mean Buffett doesn’t like the businesses anymore (had mentioned in Q2 2012 that he thinks they are strong businesses), but perhaps 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 2/14/2013 SEC filing which discloses Berkshire Hathaway stock holdings here:
http://www.sec.gov/Archives/edgar/data/1067983/000119312513060317/d481559d13fhr.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], DaVita, Wells Fargo, Kraft, Mondelez.  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):

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

Thanks and Happy Investing! – The Investment Blogger © 2013

Author: The Investment Blogger

I’m a private investor based out of Canada, 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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