Morningstar

Berkshire Again a Net Seller of Equities in Q2

Wide-moat-rated Berkshire Hathaway had a fairly quiet second quarter in its equity investment portfolio, selling some $2.1 billion worth of stock while also acquiring a little over $1 billion of equities.

Securities In This Article
Berkshire Hathaway Inc Class A
(BRK.A)
Berkshire Hathaway Inc Class B
(BRK.B)

Wide-moat-rated Berkshire Hathaway BRK.B BRK.A had a fairly quiet second quarter in its equity investment portfolio, selling some $2.1 billion worth of stock while also acquiring a little over $1 billion of equities. Based on the insurer's recent 13-F filing, Berkshire trimmed positions in US Bancorp and Chevron, and sold off more than 10% of the investment portfolio's stakes in Abbvie (selling 2.3 million shares or 10.2% of its holdings), General Motors (7.0 million shares or 10.4% of its holdings), Bristol-Myers Squibb (4.7 million shares or 15.3% of its holdings), and Marsh & McLennan (1.1 million shares or 20.6% of its holdings). Berkshire also disposed of meaningful amounts of Merck (8.7 million shares, or 48.8% of its holdings) and Liberty Global Cl C shares (5.5 million shares, or 74.5% of its holdings), while completely eliminating the firm's holdings in Liberty Global Cl A, Biogen, and Axalta Coating Systems.

As for the purchases, almost all of them involved existing holdings as Berkshire added to stakes in Kroger (picking up 10.7 million shares and increasing its position by 21.0%), Aon (around 300,000 shares and increasing its position by 7.3%), and Restoration Hardware (35,500 shares for a 2.0% increase in the company's holdings). Berkshire also disclosed a new investment during the quarter in Organon (some 1.65 million shares), which was spun-off by Merck during the second quarter. Berkshire had originated stakes in the pharmaceuticals--AbbVie, Biogen, Bristol Myers Squibb and Merck--as well as the insurance brokers-- Marsh & McLennan and Aon--in just the past year and a half, but many of these stocks have seen marked gains in just the past few quarters, allowing the insurer's main managers of many of these smaller holdings (relative to the portfolio overall)--CEO Warren Buffett's two lieutenants Todd Combs and Ted Weschler--to take some profit off the table. Even so, the firm ended the second quarter with $293.0 billion of reportable equity holdings.

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About the Author

Greggory Warren, CFA

Strategist
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Greggory Warren, CFA, is a strategist, AM Financial Services, for Morningstar*. He covers the traditional US- and Canadian-based traditional asset managers, as well as the alternative asset managers and Berkshire Hathaway. Over the course of his career, Warren has covered not only financial services names but companies from the consumer staples and consumer cyclicals sectors, and been involved in portfolio stock selection and management.

Prior to joining Morningstar in 2005, Warren worked as a buy-side equity analyst for more than eight years, covering consumer staples and consumer cyclicals. Before assuming his current role at Morningstar in 2017, Warren covered the financial-services sector as a senior analyst since late 2008. Prior to that time, he covered the non-alcoholic beverage manufacturers and distributors, packaged food firms, food service distributors, and tobacco companies.

Warren holds a bachelor's degree in accounting and English from Augustana College. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Chicago.

During 2014-19, Warren was selected to participate each year on the analyst panel at Berkshire Hathaway’s annual meeting, asking questions directly of Warren Buffett and Charlie Munger. The analyst panel was disbanded ahead of Berkshire’s 2020 annual meeting. Warren also ranked second in the investment services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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