"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q3 2017 Update"
"Berkshire Hathaway's 13F stock portfolio value increased from $162B to $178B this quarter.Their largest three holdings are at ~40% of the entire portfolio.Berkshire Hathaway increased Apple, Monsanto, and Synchrony Financial while reducing International Business Machines and Charter Communications.This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway’s US stock portfolio on a quarterly basis. It is based on Warren Buffett’s regulatory  filed on 11/14/2017. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q2 2017.During Q3 2017, Berkshire Hathaway’s (BRK.A) (BRK.B) US long stock portfolio value increased ~10% from $162B to $178B. The increase was primary due to the exercise of Bank of America warrants during the quarter. The top five positions account for ~60% of the portfolio: Wells Fargo, Kraft Heinz Co., Apple Inc., Coca Cola, and Bank of America. There are 43 individual stock positions many of which are minutely small compared to the overall size of the portfolio.() are a treasure trove of information and are a very good source for anyone starting out on individual investing.New Stakes:Bank of America (BAC): Berkshire established this large (top five) 9.68% of the portfolio position through the exercise of Bank of America warrants. The warrants had a strike price of $7.14 compared to the current price of $26.24. The cost to exercise was $5B and it was funded using the $5B in 6% preferred stock they held. The 13F lists Berkshire owning 679M shares compared to 700M shares exercised.Note: Berkshire’s ownership stake in Bank of America is 6.5%.Stake Disposals:Wabco Holdings (WBC): A minutely small 0.21% portfolio WBC stake was almost sold out last quarter at prices between $112 and $128. The remainder position was disposed this quarter. The stock is now at ~$144.Stake Increases:Apple Inc. (AAPL): AAPL is a top three 11.63% of the 13F portfolio stake established in Q1 2016 at prices between $93 and $110 and increased by ~55% the following quarter at prices between $90 and $112. Q4 2016 saw another ~275% increase at prices between $106 and $118 and that was followed with a stake doubling in January at prices between $116 and $122. The stock currently trades at $171. There was a marginal increase last quarter and that was followed with a ~3% increase this quarter.Monsanto Company (MON): The 0.60% MON position was established in Q4 2016 at prices between $98 and $106 and the stock currently trades at $118. In September 2016, Bayer AG (BAYRY) agreed to acquire Monsanto in a $128 per share cash deal. There was a ~10% increase this quarter.Synchrony Financial (SYF): SYF is a 0.36% of the portfolio position purchased last quarter at prices between $26.50 and $34.50 and increased by ~20% this quarter at prices between $28.50 and $31.25. The stock is now at $32.56.Note: Synchrony is the private label credit-card business spinoff from GE that started trading in August 2014 at ~$23 per share. It has seen super-investor interest in the last year: Baupost Group has a ~10% portfolio stake.Stake Decreases:Wells Fargo & Co. (WFC):  WFC is Buffett’s largest stake at 14.41% of the US long portfolio. Recent activity follow: Q1 2015 saw a ~7M share stake increase at prices between $51 and $56. The previous significant activity was in Q2 2013: over 18M shares were purchased at the time at prices between $34.50 and $38. The stock currently trades at $54.04. Berkshire’s cost-basis is at $25.46. Around 9M shares were sold last quarter at around $53 per share to bring the ownership stake below the 10% threshold. There was a marginal trimming this quarter.International Business Machines (IBM): The original IBM position was purchased in Q3 2011 at prices between $158 and $185. As of Q4 2016, the share count had gone up by almost 40% through periodic purchases. There was an about-turn in Q1 2017: ~21% selling at prices between $166 and $182 and that was followed with another ~16% reduction in early May at prices between $150 and $160. This quarter saw another one-third reduction at prices between $140 and $156. The stock currently trades at ~$149 and Berkshire’s cost-basis is at around $170.Charter Communications (CHTR): CHTR is a 1.74% of the US long portfolio position. It was established in Q2 2014 at prices between $118 and $158 and more than doubled the following quarter at prices between $151 and $164. Q4 2014 saw a further ~25% increase at prices between $140 and $170. In Q2 2015, the position was again increased by ~42% at prices between $168 and $193 and that was followed with another ~21% increase the following quarter at prices between $167 and $195. Q2 2016 saw a ~10% trimming at prices between $198 and $233. The stock currently trades at $337 compared to Berkshire’s cost-basis of around $160. There was a ~10% trimming this quarter.Note: Berkshire controls ~3.4% of CHTR.Kept Steady:Kraft Heinz Co. (KHC): KHC is currently the second-largest 13F stock position at 14.21% of the portfolio. Kraft Heinz started trading in July 2015 with Berkshire owning just over 325M shares (~27% of the business). The stake came about as a result of two transactions with 3G capital as partner: a ~$4B net investment in 2013 for half of Heinz and a ~$5B investment for the acquisition of Kraft Foods Group earlier this year. Berkshire’s cost-basis on KHC is below $30 per share compared to the current price of $79.38.American Express (AXP) and Coca Cola (KO):  These two very large stakes were kept steady during the last ~4 years. Buffett has said these positions will be held “permanently”. Berkshire’s cost-basis on AXP and KO are at around $8.49 and $3.25 respectively and the ownership stakes are at ~17.5% and ~9.4% respectively.Phillips 66 (PSX): PSX is a fairly large 4.16% of the portfolio stake. It is a long-term position. As of Q4 2014, the stake was very small at ~0.5% of the portfolio (~6.5M shares). Q1 2015 saw a ~14% increase at prices between $59 and $80. The following quarter saw an additional ~300% increase at prices between $76.50 and $82 and that was followed with a stake doubling in Q3 2015 at prices between $70.50 and $84.50. Q2 2016 saw another ~23% increase in the high-70s price range while last quarter saw a ~4% further increase at ~$80. The stock currently trades at $92.83. Berkshire’s cost-basis is $78.31.Note: Berkshire avoided disclosing PSX stake in the original Q2 2015 13F by making use of the “”. An amendment filed on 9/4/2015 disclosed the huge stake build up. Berkshire controls ~16% of PSX.US Bancorp (USB): USB, a 2.57% stake has been in the portfolio since 2006. The position was tripled during the 2007-2009 timeframe. In Q2 2013, ~17M shares were purchased at prices between $32 and $36. The last significant activity was a ~5% increase in Q1 2015 at prices between $41 and $45. Berkshire’s cost-basis on USB is $31.80 and the stock is now at $51.83. Buffett controls ~5% of the business.Moody’s Inc. (MCO):  MCO is a 1.93% of the US long portfolio stake. It is a very long-term position and Buffett’s cost basis is $10.05.  The stock currently trades at ~$143. Berkshire controls 11.5% of the business.Southwest Airlines (LUV): LUV is a 1.50% portfolio stake purchased in Q4 2016 at prices between $38.50 and $51 and increased by ~10% in the following quarter at prices between $49.50 and $59. The stock is now at $53.75Note: Berkshire owns ~7.9% of LUV.Bank of New York Mellon Corp (BK):  BK is a ~1.50% of the US stock portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.50 and $25. The stake was increased by 30% in Q2 2013 at prices between $26.50 and $30.50. The five quarters thru Q3 2015 had seen an about turn as there was a combined ~20% reduction at prices between $36 and $45. Q1 2017 saw a ~50% increase at prices between $43.50 and $49 and that was followed with another similar increase last quarter at prices between $46 and $51. The stock currently trades at $51.85.Goldman Sachs (GS): GS is a 1.46% of the US long portfolio stake established in Q4 2013. Berkshire Hathaway received $5B worth of warrants to buy GS stock during the financial crisis (October 2008) at a strike price of $115 (43.5M shares) that was to expire October 1, 2013. Buffett exercised the right before expiry to start this long position. Q3 2015 saw a ~13% reduction at prices between $172 and $213. It currently trades at ~$237.Delta Air Lines (DAL): DAL was a very small 0.19% position in Q3 2016. The stake saw a whopping ~850% increase in Q4 2016 to a ~2% portfolio stake at prices between $39 and $52. The stock currently trades at $48.90. There was a ~12% trimming during H1 2017.Note: Berkshire controls ~7.3% of DAL.General Motors (GM):  GM is a 1.36% of the US long portfolio position that was first purchased in Q1 2012 at prices between $21 and $30. The stake was increased by 60% in Q2 2013 at prices between $27.50 and $35.  There was a ~20% increase in Q3 2014 at prices between $32 and $38 and a similar increase in Q3 2015 at prices between $27 and $33.50. Last quarter saw another 20% increase at prices between $32.50 and $35.50. The stock currently trades at $43.DaVita Inc. (DVA):  DVA is a 1.29% of the US long portfolio position that was aggressively built-up over several quarters: the original stake was doubled in Q1 2012, increased by over 50% in Q2 2012, 24% in Q4 2012, and an additional 16% in Q1 2013. There has been marginal buying since. The bulk of the stake build-up happened at prices between $30 and $49. The stock currently trades at $54.66 compared to Berkshire’s overall cost-basis of $45.33. For investors attempting to follow Berkshire, DVA is a good option to consider for further research.Note 1: Berkshire’s ownership stake in DVA crossed the 20% ownership threshold last quarter as a result of buybacks at DaVita.Note 2: In May 2013, Berkshire’s Ted Weschler signed an accord with DVA, limiting open-market purchases to 25% of the company.American Airlines (AAL): AAL stake was first purchased in Q3 2016. The position is now at 1.26% of the portfolio. The original purchase was at prices between $28 and $39 and doubled in Q4 2016 at prices between $36.50 and $50. The stock is now at $45.81.Note: Berkshire controls ~9.7% of AAL.Liberty SiriusXM Group (LSXMA) (LSXMK): The tracking stock was acquired as a result of Liberty Media’s recapitalization in April 2016. Shareholders received 1 share of Liberty SiriusXM Group, 0.25 shares of Liberty Media Group and 0.1 shares of Liberty Braves Group for each share held. Berkshire held 30M shares of Liberty Media for which he received the same amount of Liberty SiriusXM Group shares. There was a ~40% stake increase last quarter at a cost-basis of ~$40 per share. The stock is now at $40.37.Note: LSXMA/LSXMK is trading at a significant NAV-discount to the parent’s (SIRI) valuation. For investors attempting to follow Buffett, LSXMA/LSXMK is a good option to consider for further research.United Continental Holdings (UAL): The minutely small 0.18% UAL position as of Q3 2016 saw a huge ~540% increase in Q4 2016 at prices between $52.50 and $76. It currently goes for $57.20. The stake is at 0.97% of the portfolio. There was a ~3% trimming last quarter.Note: Berkshire controls ~9.3% of UAL.Verisign Inc. (VRSN): VRSN was first purchased in Q4 2012 at prices between $34 and $49.50. The position was more than doubled in Q1 2013 at prices between $38 and $48 and another one-third the following quarter at prices between $44 and $49. Q1 & Q2 2014 also saw a combined ~17% increase at prices between $47 and $63. The stock currently trades at $111 and the position is at 0.78% of the portfolio (~10% of the business).USG Corporation (USG):  USG is a very long-term holding and there was a significant 21.39M share stake increase in Q4 2013 due to conversion of notes at $11.40 per share - Berkshire acquired the convertible notes during the financial crisis (2/2009) and USG opted to redeem them on 12/16/2013. Q2 2014 saw a ~12% stake increase at prices between $30 and $33. The stock currently trades at $34.24. Buffett controls around 27% of the business and his cost-basis is ~$19.Liberty Global PLC (LBTYA) (LBTYK): The position was established in Q4 2013 at prices between $37.50 and $44.50 (adjusted for the 03/2014 stock-split) and increased significantly in the following two quarters at prices between $38.50 and $46. The three quarters thru Q1 2016 had also seen a combined ~30% increase at prices between $30 and $50. Q2 2016 saw a ~17% further increase at prices between $27 and $39. The stock is now at $28.34 and the stake is at 0.52% of the US long portfolio.Note: Berkshire controls 7.9% of Liberty Global.Sirius XM Holdings (SIRI): The 0.43% SIRI stake was purchased in Q4 2016 at prices between $4.08 and $4.61. Last quarter saw a marginal increase. There was an about-turn last quarter: ~20% reduction at prices between $4.7 and $5.5. The stock is currently at $5.35.Axalta Coating Systems (AXTA): AXTA is a small 0.38% of the portfolio stake established in Q2 2015 at prices between $28 and $36 and increased by ~16% the following quarter at prices between $24.50 and $33.50. The stock currently trades at $31.79. Berkshire owns ~9.8% of the business.Restaurant Brands International (QSR): QSR is a 0.30% of the 13F portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades well above that range at $64.81. It started trading in December 2014 following a merger/rename transaction between Tim Hortons and Burger King Worldwide.Note: Berkshire’s stake in the business is ~4.2%.Store Capital (STOR): The 0.26% STOR stake was established last quarter in a private placement transaction at $20.25 per share. The stock is now at $26.02.Costco Wholesale (COST), Graham Holdings (GHC), Johnson & Johnson (JNJ), Liberty LiLAC Group (LILA) (LILAK), Mondelez International (MDLZ), M&T Bank (MTB), MasterCard Inc. (MA), Procter & Gamble (PG), Sanofi (SNY), Torchmark Corporation (TMK), United Parcel Service (UPS), Verisk Analytics (VRSK), Verizon Communications (VZ), Visa Inc. (V), and Wal-Mart Stores (WMT): These are very small positions (less than ~0.5% of the portfolio each) kept steady this quarter.Note 1: Per the , Berkshire has a $1.7B position in Sanofi - so in addition to the ADRs listed in the spreadsheet, Berkshire also owns Sanofi securities listed in Euronext Paris.Note 2: Since November 2015, Warren Buffett is known to own ~8% of Seritage Growth Properties (SRG) at a cost-basis of $36.50 in his personal portfolio. It currently trades at $40.28. SRG is an REIT spinoff from Sears (SHLD) that started trading in July 2015.The spreadsheet below highlights changes to Berkshire Hathaway’s US stock holdings in Q3 2017:8/15/2017 – AXP & KO cost-basis & ownership percentages confused a reader. I offered to separate them out from the next round…Regulatory Filings thru 8/15/2017: 13D - 8/11/2017 – DVA – 38.6M shares – 20.2% of business – buybacks has caused ownership to exceed 20% and that was the reason for this 13D filing. 7/xx/2017 Form 4s & 13D/A – small Munger transaction & 18.7M BRK.B share charitable donation from Buffett. 31.41% aggregate voting power, 17.19% economic interest remains – 282.6K of the A shares and 194.9K of the B shares. Form 4s – 5/31/2017 – LSXMK & LSXMA - ~600K shares acquired at ~$41.50 & ~380K shares acquired at ~$41.60 – 31.1M & 14.9M shares. Form 4s – 5/25/2017 – LSXMK & LSXMA – Similar increase at ~$40. Form 4s – 5/22/2017 – LSXMK & LSXMA – similar increase at ~$38. Form 4s – 5/19/2017 – LSXMA & LSXMK - ~1.9M shares @ ~$36.50 and ~500K shares @ ~$36.60.6/26/2017 – STORE Capital  9.8% investment by Berkshire – STOR - Berkshire Hathaway has invested $377 million in the company, representing 9.8% of total shares outstanding. In the transaction, STORE Capital issued 18.6 million shares of company stock in a private placement to a wholly owned subsidiary of Berkshire Hathaway at a price of $20.25 per share."