Berkshire's Latest Buys

A quick glance at  Berkshire Hathaway's (BRK.A) (BRK.B) 13-F filing for the first quarter of 2012 revealed more than a handful of moves by the insurer during the quarter. The first transaction of note was Berkshire's purchase of another 10.6 million shares of  Wells Fargo (WFC), which brings the firm's stake in the bank up to 394.3 million shares (worth $13.5 billion at the end of the first quarter). Wells Fargo has been Warren Buffett's "go to" stock over the last three years, and while we didn't think that the shares had dipped enough during the first quarter to warrant a whole lot of buying activity, the Oracle of Omaha felt differently. Since the start of 2009, Berkshire has added 104.1 million shares of Wells Fargo (equivalent to 36% of its holdings in the bank at the end of 2008) to its investment portfolio.

Buffett was also going back into the market to pick up shares of  Wal-Mart (WMT), and that was even before news broke last month that the firm's largest foreign subsidiary, Wal-Mart de Mexico, had been accused of years of widespread bribery in that country. We had recently speculated that Wal-Mart was one of only a few names we could envision Buffett buying (following his comments early last week that he had purchased two stocks for Berkshire's account in the days before and after the annual meeting, indicating that these were additions to positions the company already owns), so we weren't too far off the mark. The question, though, is whether Buffett was adding to the 7.7 million shares that Berkshire already picked up during the first quarter when the stock took a turn for the worse at the end of April. With the retail giant accounting for less than 4% of Berkshire's total stock holdings at the end of the first quarter, we wouldn't be surprised if Buffett did step up and purchase more shares of Wal-Mart during the current quarter.

About the only other transactions we can ascribe to the Oracle of Omaha are the purchase of 490,000 additional shares of  IBM (IBM), the sale of 9.1 million shares of  Kraft Foods (KFT), and 3.5 million shares of  Procter & Gamble (PG), none of which surprise us too much, given the tone of Buffett's more recent comments on both names.

As for the non-Buffett moves, we saw Berkshire pick up another 2.7 million shares of  The DIRECTV Group , which at $1.1 billion at the end of the first quarter accounted for less than 2% of Berkshire's reported $75.3 billion stock portfolio. We continue to ascribe this position to Ted Weschler, who was also the likely force behind purchases of  DaVita (DVA) (where he picked up 3.3 million shares) and Liberty Media (which was increased by 1.3 million shares), as these three firms were top five holdings in his fund. We also believe that he was behind this quarter's new money purchase of  Viacom , which fits in more nicely with his bent toward media and communications names.

It's anybody's guess who was behind the 10-million-share investment in  General Motors (GM), which doesn't really fit in with Weschler's background, nor Todd Combs', who has had more of a penchant toward financial services names. We think the ramping up of Berkshire's position in  Bank of New York Mellon (BK), which increased in size by 3.8 million shares, was a Combs move, as was the sale of 860,000 shares of  Dollar General (DG) (which had been one of his first additions to the portfolio in the second quarter of last year). While we're not sure if Combs or Weschler initiated the stake in  Intel (INTC) during the third quarter of 2011, Berkshire sold off around one quarter of its stake during the quarter, which makes sense given that the stock is up some 50% from its lows in mid- to late August 2011. As for the remaining transactions, they looked to be more housecleaning related than anything else, with Berkshire moving 1.5 million shares of Comdisco and 1.2 million shares of  Verisk Analytics (VRSK) off the books. There were also very minor shares changes in  US Bancorp (USB) and  Ingersoll-Rand (IR) during the quarter.

It should also be noted that Berkshire's 13-F filing this quarter did include the "confidential information has been omitted from the Form 13-F and filed separately with the Commission" phrase, which is usually a sign that Berkshire has received permission from the SEC to keep a holding secret while it builds up a stake, so it's anybody's guess what else Buffett, Combs, and/or Weschler were up to during the quarter. As is the case in most periods, Berkshire's equity portfolio remains concentrated among its top 10 holdings, which accounted for close to 90% of the total dollar value (of $73.5 billion) of its reported stock portfolio at the end of the first quarter. We intend to publish a much deeper look at Berkshire's holdings as part of our Ultimate Stock-Pickers content next week.

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