Here's what stocks Buffett's Berkshire Hathaway bought and sold in the second quarter
In addition to the collection of more than 60 subsidiaries, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) owns a massive equity portfolio worth more than $ 200 billion dollars. Since most of the stock positions were selected by legendary investor Warren Buffett himself, it is no surprise that this is one of the most monitored equity portfolios in the world.
With that in mind, we recently got a glimpse of what Buffett and his team bought and sold during the second quarter. Here's an overview of all Berkshire's recent stock moves and what investors need to know about them.
Image Source: The Motley Fool.
What Berkshire Hathaway bought during the second quarter
Berkshire did not start any new positions, but it gave four of the existing ones:
|
Company (Stock Symbol) |
Stocks Purchased in Q2 2019 |
Shares Owned at the End of Q2 2019 |
Market Value of Shares Purchased |
|---|---|---|---|
|
Bank of America (NYSE: BAC) |
31,081,000 |
927,248,600 |
$ 914.4 million |
|
US Bancorp |
3,150,787 |
132,459,618 |
$ 167.0 million |
|
Amazon.com (NASDAQ: AMZN) |
54,000 |
537,300 |
$ 103.8 million [Hat |
|
|
61,419 |
5,111,890 |
$ 11.7 million |
|
Total purchase |
– |
– |
$ 1.197 billion |
Data source: Berkshire Hathaway SEC filings. Market values as of June 30, 2019.
First and foremost, notice that Buffett seems to still be good at bank shares. Berkshire has added several of its bank shares in recent quarters, continuing that trend in the first quarter with around $ 1.1 billion invested between Bank of America and US Bancorp.
To be fair, we already knew about Bank of America investment. In fact, in a separate filing by the SEC in late July, Berkshire revealed ownership of 950 million shares in Bank of America. This means that Berkshire has bought even more shares in the bank since the end of the quarter.
It is also important to realize that the Amazon.com investment was not made by Buffett himself, but was initiated by either Todd Combs or Ted Weschler, Buffett & # 39; s two stock pickers.
And finally, although Berkshire bought more Red Hat during the quarter, this was probably seen as an arbitrage opportunity. Just after the end of the quarter, IBM ended with the acquisition of Red Hat for $ 190 per share. Berkshire probably believed the deal had a high probability of reviewing and decided to add some shares at a lower price than IBM's acquisition. It's also interesting to note that thanks to IBM's acquisition of Red Hat, Berkshire received nearly $ 1 billion in cash to add to its ever-expanding war chest.
What Berkshire Hathaway Sold
On the surface, Berkshire appears to be a stock seller during the second quarter. Here are the two stocks that Berkshire sold, and the important point investors need to know.
|
Company (Stock Symbol) |
Shares sold in Q2 2019 |
Shares owned at end of Q2 2019 |
Market value of shares Sold |
||
|---|---|---|---|---|---|
|
Charter Communications (NASDAQ: CHTR ) |
284,102 |
5426,609 |
$ 113.0 million |
||
|
USG |
39,002,016 |
0 [1965901659$1638] Total dispositions |
|
– |
$ 1.751 billion dollars |
Data source: Berkshire Hathaway SEC filings. Market values as of June 30, 2019 excluding USG, which were sold to Knauf in the second quarter at $ 42 per share.
The most important point to mention here is that the USG position was not exactly sold, at least not in the sense that Buffett decided to get rid of it. During the second quarter, USG was acquired by Knauf, and Berkshire received $ 42 per share for its stake. So I would call the small reduction in Berkshire's Charter Communications investment the only real "sale" during the quarter.
Another "buy"
It is also worth noting that Berkshire also spent a significant amount – around $ 400 million – on repurchasing its own stock, as the Q2 earnings report revealed. This is a sharp decline from $ 1.7 billion in buybacks during the first quarter, but still indicates that both Warren Buffett and Charlie Munger think Berkshire is significantly cheaper than its intrinsic value.
(If you are curious, the average price Berkshire paid for the share was approximately $ 201.50 per class B share during the period.)
Continued lack of attractive opportunities
In the second quarter, Berkshire was least active when applies to share purchases in recent memory. Over the past few years, Berkshire has struggled to find attractive ways to put their money to work, which is why the company has more than $ 122 billion on its balance sheet. Now that we have caught a glimpse of the company's activity in the second quarter, it is clear that this was still the case.
