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A Closer Look At What Warren Buffet Bought And Sold In Third Quarter

The third quarter was pretty good for the US markets as we saw all-time highs being made. However, this also meant that big investment managers and companies made little changes to their portfolio. They held their stocks to ensure the maximum returns on investment. The Berkshire Hathaway team, made some changes to portfolio. Apart, from the Bank of America deal which is already famous, there were three stocks which were bought and three which were sold in the previous quarter.

 Stock Additions to Berkshire’s portfolio

During the quarter, Berkshire added to three of the stock positions in the company's portfolio:

  • Berkshire Hathaway bought a lot of Apple shares, taking their investment to 2.6% in Apple. It now has 134.2 million shares of Apple. Buffett and company have made a good gain over the past 2 years, yet they are heavily invested in Apple.
  • Berkshire Hathaway invested in Synchrony Financial in the second quarter. They increased their investment in it by purchasing another 39 million shares.
  • Berkshire also bought 832,000 shares of Monsanto, and increased their stake by 10% in the company.

The interesting thing to note is that the latter two investments constitute a very small portion of Berkshire holdings. Monsanto constitute $1.1 billion of their investments and Synchrony constitutes around $646 million. Apple constitute $21 billion of their investments.

Stocks where investment reduced

 During the third quarter, Berkshire also reduced the sizes of some of its investments.

  • Berkshire Hathaway has been disposing of IBM, since start of the year. In this quarter as well, it continued to sell off IBM. The interesting thing is the number of shares. They reduced their holdings by 17.1 million shares in this quarter. This can help us know that they think IBM doesn’t have that much value remaining. It doesn’t even make through to one of their top 10 investments when over decades it was one of the biggest investment for them.
  • Wells Fargo had an infamous fake accounts scandal and that time Warren Buffet was one of the biggest name which came forward to defend the institution. It looked as if Warren Buffet is bullish on the company and believes in their management. However, during the end of third quarter, Berkshire has brought down their holdings in the company. But, it remains the biggest company in which they are invested at the moment.
  • Also, the quarter saw stake sale in Charter Communications which is a cable television company. Berkshire now holds about 2.8% of the company.

Increase in Cash Holding by $9.5 billion

The company is now sitting on a cash pile of whooping $109 billion which is $9.5 more than the previous quarter. Though it is difficult to tell the prices at which stock deals took place, but one thing that is certain is Berkshire sold more than it bought in previous quarter. When, this sell off is combined with earnings from other businesses it leaves Berkshire with loads of cash which it is unable to invest or maybe, it expects that market is going to witness a downturn and it will buy then. But, this surely tells us that Berkshire is waiting doesn’t value the market too much at this price because Warren Buffet is not a person who likes holding cash when stocks are available for purchase.

Disclosure: SAMT AG collected this data from various sources and doesn't hold any positions in companies mentioned above nor does it have any relation. Before, taking any investing decision please do research on your behalf as well. Stock markets involve risk 

 

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Harneet Bahri
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Harneet Bahri

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SAMT AG

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