"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q2 2019 Update"
"Berkshire Hathaway's 13F stock portfolio value increased from $199B to $208B this quarter.Their largest three holdings are at ~47% of the entire portfolio.Berkshire Hathaway increased Amazon during the quarter.This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway’s 13F stock portfolio on a quarterly basis. It is based on Warren Buffett’s regulatory  filed on 08/14/2019. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q1 2019.During Q2 2019, Berkshire Hathaway’s (BRK.A) (BRK.B) 13F stock portfolio value increased ~4% from $199B to $208B. The top five positions account for ~65% of the portfolio: Apple Inc., Bank of America, Coca Cola, Wells Fargo, and American Express. There are 44 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.Note: In H1 2019, Berkshire Hathaway repurchased ~10.45M Class B Equivalent Shares for a total outlay of $2.1B. The average price paid was ~$201. Book Value as of Q2 2019 was ~$157 per share. So, the repurchase happened at ~128% of Book Value. In July 2018, Berkshire had announced a plan to make their re-purchase criteria to be more flexible – instead of the 120% of Book Value criteria, Buffett & Munger had to agree that Berkshire was trading below intrinsic value. The Class B shares currently trade at ~$196.New Stakes:None.Stake Disposals:USG Corporation (USG):  USG was 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. In March 2018, USG board rejected a $42 per share cash offer by Germany’s Knauf.  Partly in response, Berkshire Hathaway disclosed in a regulatory filing in the following month that they would vote against USG directors in the upcoming annual meeting. In June 2018, USG accepted a $44 per share cash offer (includes 50c special dividend) from Knauf and that transaction closed this April. Buffett controlled around 31% of the business and his cost-basis was ~$19.Stake Increases:Bank of America (BAC): Berkshire established this large (top three) ~13% 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 $26.42. The cost to exercise was $5B and it was funded using the $5B in 6% preferred stock they held. There was a ~30% stake increase in Q3 2018 at prices between $27.75 and $31.80 and a marginal increase next quarter. This quarter also saw a ~4% stake increase.Note: Berkshire’s overall cost-basis is ~$13.US Bancorp (USB): The 3.34% USB stake has been in the portfolio since 2006. The original position was tripled during the 2007-2009 timeframe. It was then kept relatively steady till Q2 2013 when ~17M shares were purchased at prices between $32 and $36. H1 2018 had seen a ~16% increase at prices between $49 and $58 and that was followed with a ~25% increase in Q3 2018 at prices between $50 and $55. The stock is now at $50.90 and Berkshire’s cost-basis is ~$38. There was a ~4% stake increase in Q4 2018 and that was followed with a ~2% stake increase this quarter.Amazon.com (AMZN): AMZN is a 0.49% of the portfolio stake established last quarter at prices between $1500 and $1820 and increased by ~11% this quarter at prices between $1693 and $1963. The stock currently trades at $1763.Red Hat Inc. (RHT): RHT is a 0.47% of the portfolio position established in Q4 2018 and increased by ~22% last quarter. Last October, IBM agreed to acquire Red Hat for $190 per share cash. The transaction closed last month. There was a marginal increase this quarter.Stake Decreases:Charter Communications (CHTR): CHTR is a ~1% of the portfolio position. It was established during the last three quarters of 2014 at prices between $118 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. The stock currently trades at ~$375 compared to Berkshire’s cost-basis of ~$178. The six quarters thru Q4 2018 had seen a combined ~25% selling at prices between $250 and $395 and that was followed with a ~20% reduction last quarter at prices between $285 and $366. This quarter also saw a ~5% trimming.Kept Steady:Apple Inc. (AAPL): AAPL is currently the largest 13F portfolio stake at ~24%. It was 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 2017 at prices between $116 and $122. There was another ~23% increase in Q4 2017 at prices between $154 and $176 and that was followed with a ~45% increase in Q1 2018 at prices between $155 and $182. Since then, the activity has been minor. The stock currently trades at ~$203.Note: Berkshire’s overall cost-basis on Apple is ~$141 per share. They have a ~5% ownership stake in the business.American Express (AXP) and Coca Cola (KO):  These two very large stakes were kept steady during the last ~5 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 ~17.6% and ~9.4% respectively.Wells Fargo & Co. (WFC):  WFC is Buffett’s fourth-largest stake at 9.32% of the 13F portfolio. Recent activity follow: around 9M shares were sold in Q2 2017 at around $53 per share to bring the ownership stake below the 10% threshold. The stock currently trades at $43.97. Berkshire’s cost-basis is at ~$24.50. The six quarters thru Q4 2018 had seen marginal trimming and that was followed with a ~4% selling last quarter.Kraft Heinz Co. (KHC): KHC is currently a fairly large position at 4.86% 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 in early 2015. Berkshire’s cost-basis on KHC is ~$30 per share compared to the current price of $25.52.JPMorgan Chase (JPM) and PNC Financial (PNC): These two positions established in Q3 2018 saw substantial increases over the next two quarters. The 3.20% JPM stake was established at prices between $104 and $119 and increased by ~40% next quarter at prices between $92 and $115. There was another ~20% stake increase last quarter at prices between $97 and $107. The stock currently trades at ~$105. The 0.57% PNC stake was established at prices between $134 and $146 and increased by just over one-third next quarter at prices between $110 and $140. The stock is now at ~$125. Last quarter also saw a ~5% stake increase.Moody’s Inc. (MCO):  MCO is a 2.32% of the 13F portfolio stake. It is a very long-term position and Buffett’s cost basis is $10.05.  The stock currently trades at ~$207. Berkshire controls ~13% of the business.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 at prices between $39 and $52. The stock currently trades at $57.23 and the stake is at 1.93% of the portfolio. There was a ~20% increase in Q2 2018 at prices between $49 and $56 and that was followed with a ~8% increase last quarter at ~$49.50.Note: Berkshire controls ~10% of DAL and their overall cost-basis is ~$44.Goldman Sachs (GS): GS is a 1.80% of the portfolio stake established in Q4 2013. Berkshire 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. Recent activity follow: Q3 2018 saw a ~40% stake increase at prices between $220 and $243. GS currently trades at ~$196. Their overall cost-basis is ~$127 per share.Bank of New York Mellon Corp (BK):  BK is a 1.72% of the 13F portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.50 and $25. Recent activity follow: 2017 saw a ~180% increase at prices between $43.50 and $55 while last year saw another one-third increase at prices between $44.50 and $58.50. The stock currently trades at $41.96. Berkshire’s cost-basis on BK is ~$46 per share. For investors attempting to follow, BK is a good option to consider for further research.General Motors (GM):  GM is a 1.34% of the 13F portfolio position that was first purchased in Q1 2012 at prices between $21 and $30. By Q3 2017, the position size had increased by around six-times (10M shares to 60M shares). Q4 2017 saw a reduction: ~17% selling at prices between $40.50 and $46.50. There was a ~38% stake increase in Q4 2018 at prices between $30.50 and $38.50. The stock currently trades at $37.19. Overall, Berkshire’s cost-basis on GM is ~$32.Southwest Airlines (LUV): LUV is a 1.31% 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. Q2 2018 saw another ~20% stake increase at prices between $50 and $57. The stock is now at $48.76.Note: Berkshire owns ~9.5% of LUV and their overall cost-basis is ~$42.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. The buying continued till Q2 2014 at prices up to $63. The stock currently trades at ~$202 and the position is at 1.30% of the portfolio (~10% of the business).DaVita Inc. (DVA):  DVA is a ~1% of the portfolio position that was aggressively built over several quarters in the 2012-13 timeframe at prices between $30 and $49. The stock currently trades at $58.17 compared to Berkshire’s overall cost-basis of ~$45 per share.Note: Berkshire’s ownership stake in DaVita is ~23%. In May 2013, Berkshire’s Ted Weschler signed an accord with DVA, limiting open-market purchases to 25% of the company.United Continental Holdings (UAL): A 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 ~$82. The stake is at 0.92% of the portfolio. Last year had seen a ~22% selling at prices between $63 and $98.Note: Berkshire controls ~8% of UAL and their overall cost-basis is ~$55.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 in Q2 2017 at a cost-basis of ~$40 per share and the stock is currently at that price.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.American Airlines (AAL): AAL stake was first purchased in Q3 2016. The position is now at 0.68% 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 $26.10. There was a ~3% trimming in Q2 2018 and a similar reduction next quarter.Note: Berkshire controls ~9% of AAL.Sirius XM Holdings (SIRI): The 0.37% SIRI stake was purchased in Q4 2016 at prices between $4.08 and $4.61. Q2 2017 saw selling: ~20% reduction at prices between $4.70 and $5.50. The stock is currently at $6.Teva Pharmaceuticals (TEVA): TEVA is a very small 0.19% of the portfolio stake established in Q4 2017 at prices between $11.20 and $19.33 and more than doubled next quarter at prices between $16.50 and $22. The stock currently trades at $6.30.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 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 $25.75 and the stake is at 0.35% of the 13F portfolio.Synchrony Financial (SYF): SYF is a 0.35% of the portfolio position purchased in Q2 2017 at prices between $26.50 and $34.50 and increased by ~20% the following quarter at prices between $28.50 and $31.25. The stock is now at $32.84.Note: Synchrony is the private label credit-card business split-off from GE that started trading in August 2014 at ~$23 per share.Store Capital (STOR): The 0.30% STOR stake was established in Q2 2017 in a private placement transaction at $20.25 per share. The stock is now at $35.97.Axalta Coating Systems (AXTA): AXTA is a small 0.35% 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 $27.55. Berkshire owns 10.1% of the business.Suncor Energy (SU) and StoneCo Ltd. (STNE): These two stakes were established in Q4 2018. The 0.16% SU stake was purchased at prices between $26 and $40 and it now goes for $27.91. STNE is a 0.20% position purchased at ~$21 per share compared to the current price of ~$34.Note 1: Berkshire has a ~11% ownership stake in StoneCo. In October 2018, WSJ reported that Berkshire had invested ~$300M each in two Fintech’s – India’s Paytm and Brazil’s StoneCo (STNE). The Paytm investment was made in August 2018 while the STNE purchase was following its IPO in October 2018.Note 2: Suncor Energy has had a roundtrip in the portfolio. It was a 0.48% position purchased in Q2 2013 at prices between $27 and $32. That stake was disposed during Q2 & Q3 2016 at prices between $25.50 and $29.Restaurant Brands International (QSR): QSR is a 0.28% of the 13F portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades well above that range at $73.87. 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%.Travelers Companies (TRV): TRV is a very small 0.43% position purchased in Q3 2018 at prices between $112 and $134 and it currently trades at ~$144.Costco Wholesale (COST), Johnson & Johnson (JNJ), Liberty LiLAC Group (LILA) (LILAK), Mondelez International (MDLZ), M&T Bank (MTB), MasterCard Inc. (MA), Procter & Gamble (PG), Torchmark Corporation (TMK), United Parcel Service (UPS), and Visa Inc. (V): These are very small positions (less than ~0.5% of the portfolio each) kept steady this quarter.Note 1: 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 $38.40. SRG is an REIT spinoff from Sears that started trading in July 2015.Note 2: Berkshire Hathaway also has a 225M share position in BYD Company at a cost-basis of ~$1 per share (~$2 per share in terms of ADRs – BYDDY).  The ADR currently trades at $10.65.The spreadsheet below highlights changes to Berkshire Hathaway’s 13F stock holdings in Q2 2019:5/18/2019 – there was a comment saying that we ignore the New England Asset Management Inc. filing and that pension etc. assets are not in there. That filing has ~$5B and lists Berkshire Hathaway & General RE as filers. Might look to see what that is… I replied to a comment on this on 8/24/2022 with the following: “Thank you for your comment. This issue comes up every few quarters in my updates. NEAM portfolio is not really a secret and their story is well known and public. Please see https://www.neamgroup.com/our-story - specialized investment company for insurance clients acquired by General RE in 1995 which was in turn acquired by Berkshire in 1998. The 13F that shows the details of their equity portfolio is at https://www.sec.gov/Archives/edgar/data/1004244/000108514622003133/xslForm13F_X01/infotable.xml .”Regulatory Filings thru 5/16/2019: Form 4 3/13 – DAL – minor increase at $49.94 – 70910456 shares remain, 3/8 - ~5.4M shares acquired at ~$49.40, 3/5 – Form 3 – 65.5M shares.2/25/2019 – Becky Quick Interview  – a) Annual Letter - his AL was focused on the American Tailwind (last) section. b) One big change – includes two measures with the percentage change in BV to be dropped from next year. Five Groves – 1) non-insurance businesses that Berkshire owns (energy & railroad was said as redwoods in the grove but declined to name the woods in decay – of the $24B in operating earnings, those two earned $8B, or a third), 2) equities owned, 3) insurance companies, 4) treasuries and cash, and 5) businesses that you own part of, not all of, c) GAAP Earnings – the operating earnings was $24.8B and earnings $4B - $20.6B paper loss is now part of it (first time because of GAAP rule change) and ~$3B write-off on Kraft, d) Vice Chairman’s Greg Abel & Ajit Jain Compensation - ~$18M each, d) Performance of the money managers Ted Weschler Todd Combs – slightly behind S&P over the ~8-year period – manage $13B each and they are doing better than Buffett, e) Kraft Heinz – at $34, ~$70B EV earning ~$6B and for 2019 it may go down – not very attractive to buy more but won’t sell because of the size – if managing millions would have sold – it is still a good business though. Costco’s Kirkland signature does 50% more than their brands which is the real problem – they don’t have the upper hand with retail now and so diminished pricing power – that will continue – also PE has upped pricing & so 3G cannot go and buy at reasonable prices, f) Opinion on Market – incredibly cheap if long interest rates stay at 3% for the next 30 years. For a ten year holding period, would choose S&P over treasury in a second, g) Why not active in Equity & buybacks in Q4 – may have been looking for a large deal but they liked equities in Q4 – expects to be net buyers in 2019, h) Apple – price going down is good because the company aims to be cash neutral – also, BRK will buy at lower prices, i) GE – should sell assets and applauded the medical deal with Danaher for ~$21B cash that will be used to de-lever - ~$206B ($100B equity, $100B debt, & $5-6B preferreds) for two good businesses is the way he looks at it – has to still de-lever, j) Pension Liabilities – not a problem anymore in corporate America as defined benefit plans are gone – old businesses have those but should be manageable. Not true in the public sector – anyone looking for new factories in one of the states should consider this – also individuals – as states will eventually up taxes to pay for this – Becky mentioned New Jersey & Illinois but Buffett did not want to name names. Also about Charlie’s criticism of California driving rich people out – Florida & Texas has no income tax and their retirement plans are probably pretty decent shape compared to old industrial states, k) Wealth Tax – we do undertax the wealthy – so kind of endorses politicians who want to raise – cortez (70% over 10M), warren (welath tax over 50M), sanders (estate tax going up 77%), l) Why Financials? – 6 of top-10 holdings are banks – good things to say about Bofa & the CEO. On banks in general & JPM in particular - A business that earns 15% or 16% or 17% on net tangible equity, that’s incredible in a world of 3% bonds, m) Misc – Electric cars in our future much earlier than autonomous – BYD was Charlie’s buy ten years ago – have done fine. On BITCOIN – it is a delusion basically – no value. Blockchain has value."