Berkshire Hathaway Dumps Deere, Adds Express Scripts

Over the last three years, Berkshire Hathaway, for the second time, has bought shares in a pharmacy related company.

So it’s no surprise that Berkshire Hathaway’s Warren Buffett really likes the pharmacy business.

During the third quarter, Berkshire Hathaway, owned by Warren Buffett, added shares of Express Scripts to its portfolio, and is widely followed by investors all over the world. This company processes the paperwork needed by pharmacies and insurance companies, and it also helps to make sure that the pharmacies get paid. In 2013, the company processed a total of 1.3 billion insurance drug claims, which currently makes it the largest company in its field.

All in all, this was not a very large purchase made by Berkshire Hathaway. Most likely, this purchase was made by one of the two investment managers… Ted Weschler or Todd Combs. They are currently both managing larger portions of the Berkshire Hathaway portfolio.

When opening the position, the company only bought 449,000 shares of Express Scripts during the third quarter. The stock is currently trading around $78, so Berkshire Hathaway only owns about $35 million worth of shares in the business. To make things clear, the current Berkshire Hathaway portfolio was worth $108 billion when September ended.

In the past, Buffett has often mentioned that the smaller positions are often opened up by Weschler or Combs. Some time ago, it was Combs who liked the pharmacy companies. So many people believe Combs was the one who purchased shares in the pharmaceutical company CVS Health. One year after the purchase, Berkshire Hathaway cashed out and made a profit.

There are also a number of the portfolio changes made during the third quarter. To start with, Berkshire Hathaway sold off of the rest of their shares of Deere. At the end of June, the company held nearly $360 million worth of shares of the tractor company. Another change was that Berkshire Hathaway added to their General Motor’s stake and they even bought more shares of Visa and MasterCard, and even tripled the amount of shares that they own the Liberty Media, part of the cable empire owned by John Malone.

As far as purchasing Express Scripts goes, Berkshire Hathaway is purchasing shares in this company during a time when they could be looking for a turnaround. During the last quarter, sales barely increased at the company. And during early November, they even announced that they had to lay off 400 workers as a way to “rebalance its resources.” They also said that their prescription volumes dropped and that they even lost some clients. Overall though, shares in the company have gone up by 10% this year.

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