"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q3 2018 Update"
"Berkshire Hathaway's 13F stock portfolio value increased from $196B to $221B this quarter.Their largest three holdings are at ~48% of the entire portfolio.Berkshire Hathaway increased several financials substantially while reducing Phillips 66.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 11/14/2018. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q2 2018.During Q3 2018, Berkshire Hathaway’s (BRK.A) (BRK.B) 13F stock portfolio value increased ~13% from $196B to $221B. The top five positions account for around two-thirds of the portfolio: Apple Inc., Bank of America, Wells Fargo, Coca Cola, and Kraft Heinz Co. 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.Note 1: As of Q3 2018, Berkshire had repurchased ~4.14M class B shares at ~$207 per share. Book Value as of Q3 2018 was ~$153 per share. So, the repurchase happened at ~135% of Book Value. In July, Berkshire had  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 ~$216.Note 2: Last Month, WSJ reported Berkshire had invested ~$300M each in two Fintech’s – India’s Paytm and Brazil’s StoneCo (STNE). The Paytm investment was made in August while the STNE purchase was immediately following its IPO last month. Regulatory filings from earlier this month show Berkshire holding 14.17M shares (11.3% of business) of StoneCo. The stock currently trades at $23.44, well below the IPO price of ~$31. For investors attempting to follow, STNE is a good option to consider for further research.New Stakes:JPMorgan Chase (JPM), Oracle Corp (ORCL), PNC Financial (PNC), and Travelers Companies (TRV): These are the new positions this quarter. The 1.82% JPM stake was established at prices between $104 and $119 and the stock currently trades at ~$107. ORCL is a ~1% position purchased at prices between $45 and $52 and it now goes for $48.84. PNC and TRV are minutely small (less than 0.5% of the portfolio each) stakes established this quarter.Stake Disposals:Sanofi (SNY) and Wal-Mart Stores (WMT): These are very small positions (less than ~0.1% of the portfolio each) disposed this quarter.Note: The 13F stake in Sanofi was a minutely small 0.08% of the portfolio position. Per last year’s , Berkshire had a $1.7B position in Sanofi - so in addition to the very small ADR stake listed in the 13F report, Berkshire held Sanofi securities listed in Euronext Paris. The current  does not show this as a top holding as it probably dropped off the top-fifteen.Stake Increases:Apple Inc. (AAPL): AAPL is currently the largest 13F portfolio stake at ~26% and Berkshire’s ownership is at ~5% of the business. 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. The stock currently trades at ~$187. There was a ~5% stake increase last quarter and a marginal increase this quarter.Note: As of Q4 2017, Berkshire’s overall cost-basis on Apple was ~$126 per share. Berkshire has increased the position by ~50% since at higher prices.Bank of America (BAC): Berkshire established this large (top three) 11.69% 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 $27.21. 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 this quarter at prices between $27.75 and $31.80.Note: Berkshire’s ownership stake in Bank of America is ~8.5%.US Bancorp (USB): The ~3% 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. Last two quarters had seen a combined ~16% increase at prices between $49 and $58 and that was followed with a ~25% increase this quarter at prices between $50 and $55. The stock is now at $54 and Berkshire’s cost-basis is ~$38.Goldman Sachs (GS): GS is a 1.86% 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. Q3 2015 saw a ~13% reduction at prices between $172 and $213 while last quarter saw a ~20% increase at prices between $220 and $260. That was followed with a ~40% stake increase this quarter at prices between $220 and $243. It currently trades at ~$203.Bank of New York Mellon Corp (BK):  BK is a 1.80% of the 13F 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 the following quarter at prices between $46 and $51. There was a ~20% further increase in Q4 2017 at prices between $51 and $55. The stock currently trades at $48.23. Berkshire’s cost-basis on BK is ~$45 per share. Last two quarters had seen a combined ~7% increase at prices between $50 and $58.50 and that was followed with a ~20% increase this quarter at prices between $50 and $56.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 $56.43 and the stake is now at 1.71% of the portfolio. There was a ~20% increase last quarter at prices between $49 and $56 and that was followed with a ~3% increase this quarter.Note: Berkshire controls ~9.5% of DAL.General Motors (GM):  GM is a 0.80% 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. The stock currently trades at $35.23. Overall, Berkshire’s cost-basis on GM is ~$30. There were marginal increases in the last two quarters.Stake Decreases:Wells Fargo & Co. (WFC):  WFC is Buffett’s third-largest stake at 10.52% 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 $52.15. Berkshire’s cost-basis is at ~$24.50. Last five quarters have seen marginal trimming.Southwest Airlines (LUV): LUV is a 1.58% 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. Last quarter saw another ~20% stake increase at prices between $50 and $57. The stock is now at $52.48. There was marginal trimming this quarter.Note: Berkshire owns ~9.5% of LUV.Charter Communications (CHTR): CHTR is a ~1% of the 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 ~$321 compared to Berkshire’s cost-basis of ~$178. Last five quarters have seen a combined ~22% selling at prices between $230 and $395.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 ~$92. The stake is at ~1% of the portfolio. There was minor selling in the last three quarters.Note: Berkshire controls ~9% of UAL.American Airlines (AAL): AAL stake was first purchased in Q3 2016. The position is now at 0.82% 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 $38.11. There was a ~3% trimming last quarter and a similar reduction this quarter.Note: Berkshire controls ~9% of AAL.Phillips 66 (PSX): PSX is now a small 0.79% of the portfolio stake. It is a long-term position. Recent activity follow: Q2 & Q3 2015 saw a huge position (~62M shares) built at prices between $70.50 and $84.50. In Q1 2018, Phillips 66 repurchased 35M shares from Berkshire at $93.725 per share. There was a ~24% selling last quarter at prices between $95 and $122 and that was followed with a ~56% reduction this quarter at prices between $109 and $123. The stock is now at $95.60. Berkshire’s cost-basis as of Q4 2017 was $78.31.Note: Berkshire avoided disclosing PSX stake build-up in the original Q2 2015 13F by making use of the “”. An amendment filed on 9/4/2015 disclosed the activity. Berkshire controlled ~16% of PSX at the time.Kept Steady: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 ~17.6% and ~9.4% respectively.Kraft Heinz Co. (KHC): KHC is currently the fifth-largest 13F position at 8.12% 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 below $30 per share compared to the current price of $52.64.Note: In February it was announced that Warren Buffett  from Kraft Heinz board this year as he decreases his travel commitments.Moody’s Inc. (MCO):  MCO is a 1.87% 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 ~$146. Berkshire controls ~13% of the business.DaVita Inc. (DVA):  DVA is a 1.25% of the 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 $64.35 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.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 following quarter saw a one-third increase 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 $151 and the position is at 0.94% of the portfolio (~10% of the business).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. The stock is now at $40.71.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.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 $42.68. Buffett controls around 31% of the business and his cost-basis is ~$19.Note: In March, USG board rejected a $42 per share cash offer by Germany’s Knauf.  Partly in response, Berkshire Hathaway disclosed in a regulatory filing in April that they would vote against USG directors in the upcoming annual meeting. In June, USG accepted a $44 per share cash offer (includes 50c special dividend) from Knauf.Teva Pharmaceuticals (TEVA): TEVA is a very small 0.42% 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 $22.67.Sirius XM Holdings (SIRI): The 0.39% 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 $6.25.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 $23.80 and the stake is at 0.35% of the 13F portfolio. There was a ~7% trimming in Q1 2018 while last quarter saw a similar increase.Axalta Coating Systems (AXTA): AXTA is a small 0.32% 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 $25.01. Berkshire owns 10.1% of the business. Last quarter saw a ~4% increase.Synchrony Financial (SYF): SYF is a 0.29% 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 $26.92.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 0.23% STOR stake was established in Q2 2017 in a private placement transaction at $20.25 per share. The stock is now at $29.43.Restaurant Brands International (QSR): QSR is a 0.23% of the 13F portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades well above that range at $55.39. 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%.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), Verizon Communications (VZ), 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 $37.28. SRG is an REIT spinoff from Sears (SHLD) 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 $13.66.The spreadsheet below highlights changes to Berkshire Hathaway’s 13F stock holdings in Q3 2018:8/16/2018: A reader pointed out that Synchrony Financial was a split-off NOT spin-off. Made a correction request and edited the content for Q2 2018.8/5/2018:  - Approximately 70% of the aggregate fair value of “Investments in Equity Securities” was concentrated in five companies (American Express Company – $14.9 billion; Apple Inc. – $47.2 billion; Bank of America Corporation – $19.7 billion; The Coca-Cola Company – $17.5 billion and Wells Fargo & Company – $26.4 billion). For AAPL - $47.2B (~254M shares) compared to $40.7B allocation as of 3/31/2018 (~243M shares) compared to $28.2B as of 12/31/2017 (~166M shares).7/18/2018 – Berkshire  to make re-purchase criteria to be more flexible – 120% of BV no longer applies – instead, Buffett & Munger has to agree it is trading below intrinsic value, conservatively determined…Regulatory Filings thru 8/14/2018: 13G/A (amendment) 8/10, Form 3 8/6 – AXTA – 24.26M shares – 10.1% of business, 13D – 7/23 – Gates Foundation holds 65.97M shares of BRK.B – 4.9% of business, 13D/A 7/18, Form 4 7/17 – Buffett’s similar filing, Form 4 – 6/28, 5/25, 5/16 – Ajith Jain similar filing, Form 4 6/18 – Munger similar filing, 13D/A – 6/11 – USG – 43.4M shares – 31.1% of business,"