Last quarter, Warren Buffett’s Berkshire Hathaway purchased a ton of new stocks. Around $12 billion, in fact, and ever since Buffett told analysts that figure, everyone has been scrambling to try and guess what moves Berkshire has made since the Trump administration took office in November. However, now SEC filings have finally shown where Buffett has placed his bets.
It is worth noting that it is impossible to tell if these investment decisions were made by Buffett himself, or simply by one of his several investors simply by looking at the SEC filings. However, it’s probably safe to assume that much of the changes were approved by Buffett, although he has said on multiple occasions that he doesn’t really monitor his managers that much. Additionally, it is difficult to really
So, without further ado, we’ll take a look at the things Buffett bought and sold in the last quarter of 2016.
What Berkshire Purchased
Despite years of smash talk about how terrible an investment airlines are, Berkshire began purchasing airline stocks in the third quarter of 2016 and continued in the fourth quarter. Berkshire increased its stock in American Airlines, Delta, and United Continental. It also picked up more than $2 billion worth of stocks in Southwest Airlines.
Berkshire has owned around $2 billion worth of Apple stock for a while, although the purchase was made not by the tech-shy Buffett. Instead, Buffett said that his proteges were the ones to make the initial suggestion. However, it seems that Buffett must have approved as the fourth quarter of 2016 saw an increase in Apple stocks to around 57 million shares—more than 1% of all Apple stocks. The quadrupling of stocks most likely had Buffett’s stamp of approval, although it is not confirmed that Buffett approved the purchase.
According to the Motley Fool, Buffett picked up this agrochemical and agricultural biotechnology corporation for around $108 per share. However, in late 2016, Monsanto agreed to be purchased by Bayer for around $128 per share. Since Berkshire picked up around eight million shares (for a total of $872 million) it could be quite the profit for Berkshire when the deal actually goes through.
4. Sirius XM
Last quarter, Berkshire purchased around 167 million shares for around $800 million. At the low price of $4.80 a share, this is a bargain as the company has consistently posted increases in profit the last three years. Additionally, Sirius XM has a good potential for growth as its radios are found in more than 90 million vehicles to date. In short, this purchase is unsurprising as it’s exactly the kind of undervalued company Buffett likes.
What Berkshire Sold
According to the filings, Berkshire Hathaway dumped absolutely all of its stocks in Deere, despite the fact that the company’s shares have careened up by around 43% in the last year. This is following a trend of decreasing its shares in previous quarters and likely shows a lack of optimism in the long term future for the company.
2. Kinder Morgan
Berkshire first purchased nearly 20 million shares of Kinder Morgan in early 2016. Since that time, the stock has about doubled its value. While it might have initially seemed like an odd investment, reports indicate that the initial purchase was actually made by Buffett’s portfolio managers, not Buffett himself. However, obviously Berkshire decided the investment wasn’t worth it as the company dumped the stock in the fourth quarter.
Although earlier this year, analysts were saying that Verizon was a great stock to purchase, it seems like Berkshire didn’t agree as it sold nearly all of its 15 million shares this last quarter. At the time of writing, the company only holds around 900 of them. Of course, as the holdings company recently also dumped its share of AT&T earlier in the year, this probably didn’t come as a surprise to most people.
Berkshire has been steadily dropping its shares in Walmart for some time now, and this trend continued in the fourth quarter. In fact, the company decreased its holdings from 13 million to around 1.4 million. It’s probably safe to say that within the next few quarters Berkshire will completely drop the corporation, most likely due to Amazon’s dominance of the shopping market.