Stock Analyst Update

A Few Surprises in Berkshire's 1st-Quarter Activity

Greggory Warren, CFA

There were few big surprises in wide-moat-rated  Berkshire Hathaway's (BRK.A) first-quarter 13-F filing. The company already announced in mid-February the sale of 35 million shares of Phillips 66 common stock for $3.3 billion in a private transaction with the oil and gas company. CEO Warren Buffett also alluded recently to the purchase of 74.2 million additional shares of Apple for an estimated $12.5 billion, which lifted the tech giant to more than one fifth of Berkshire's equity portfolio, noting that the insurer eliminated its remaining stake in IBM as well (for an estimated $314 million).

Berkshire also made large additions to existing stakes in Monsanto and Teva Pharmaceuticals, increasing its holdings in the former by more than 60% (acquiring an additional 7.3 million shares of the agricultural products firm for an estimated $850 million) and more than doubling its stake in the latter (picking up 21.7 million more shares of the generic drug manufacturer for an estimated $390 million). Other purchases during the quarter included 3.7 million shares of US Bancorp, 1.4 million shares of Bank of New York Mellon, and 0.5 million shares of Delta Air Line (for an estimated $197 million, $73 million and $27 million, respectively).

While we knew about Berkshire's trimming of its Wells Fargo stake (selling 1.7 million shares for an estimated $97 million during the period) to keep its holdings below 10% of the bank's total outstanding shares, we were surprised to see the insurer sell more than 80% of its position in Verisk Analytics (for an estimated $128 million), while also eliminating its remaining stake in Graham Holdings (for an estimated $62 million). As for the remaining sales, Berkshire sold 0.3 million shares of Charter Communications, 1.9 million shares of Liberty Global PLC, 0.5 million shares of United Continental, and 0.2 million shares of Sanofi-Aventis (for an estimated $86 million, $66 million, $35 million and $7 million, respectively).

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Greggory Warren, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.