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Investing Specialists

Seven 5-Star Stocks from Berkshire's Latest Portfolio

Burlington Northern was just one of several purchases Berkshire has made lately.

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By Bill Bergman| Senior Stock Analyst

While  Berkshire Hathaway (BRK.A) (BRK.B) may have made big headlines earlier this month with its $44 billion acquisition of  Burlington Northern (BNI), the company was no slouch during the third quarter, when it was actively buying and selling securities in its equity portfolio. In fact, the latest 13-F filing by the insurer revealed more turnover than we're accustomed to seeing from the insurance company. Of the thirteen position changes in Berkshire's portfolio during the third quarter, there were four new money purchases, two outright sales, and seven holdings where the portfolio managers at Berkshire were either adding to or subtracting from existing positions. Relative to the size of the company's overall portfolio, though, none of these transactions were large enough to make a significant dent in Berkshire's top ten holdings, which remained relatively unchanged from the second quarter of 2009.

Berkshire Hathaway has long maintained a concentrated equity portfolio. Among the 43 different stock positions held by the insurer at the end of the third quarter, the top ten holdings accounted for more than 85% of the total value of the equity portfolio.  Coca-Cola (KO) (at around 19% of the portfolio) and  Wells Fargo (WFC) (accounting for close to 16%) were Berkshire's two largest holdings. The next three largest positions--Burlington Northern,  Procter & Gamble (PG), and  American Express (AXP) accounted for 30% of Berkshire's equity portfolio. Rounding out the company's top ten holdings were  Kraft Foods (KFT),  ConocoPhillips (COP),  Johnson & Johnson (JNJ),  Wal-Mart (WMT), and  Wesco Financial (WSC). The following chart demonstrates the relative contribution that Berkshire's 43 stock holdings (ranked by the size of each position) make to the insurer's equity portfolio:

The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.