"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q3 2016 Update"
"Berkshire Hathaway's 13F stock portfolio decreased from $129.70B to $128.79B this quarter.Their largest three holdings are at ~52% of the entire portfolio.Berkshire Hathaway added all four major airlines while reducing Wal-Mart and dropping Suncor Energy.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 11/14/2016. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q2 2016.During Q3 2016, Berkshire Hathaway’s (BRK.A) (BRK.B) US long stock portfolio decreased marginally from $129.70B to $128.79B. The top five positions account for ~70% of the portfolio: Kraft Heinz Co., Wells Fargo, Coca Cola, International Business Machines, and American Express. There are 46 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:American Airlines (AAL), Delta Air Lines (DAL), and United Continental Holdings (UAL): AAL, DAL, and UAL are the new additions this quarter. AAL is a 0.62% portfolio stake established at prices between $28 and $39 and it is now well above that range at $43.40. DAL is a very small 0.19% position purchased at prices between $35.50 and $41 and it currently trades at $47.47. The 0.18% UAL position was established at prices between $39 and $54 and it is now at $62.94.Note: Warren Buffett also disclosed that Berkshire Hathaway has also established a position in Southwest Airlines (LUV) after the quarter ended.Stake Disposals:Suncor Energy (SU): SU was a small 0.48% of the US long portfolio position first purchased in Q2 2013 at prices between $27 and $32. 2014 saw a ~24% increase at prices between $28 and $43. Q3 2015 saw another roughly one-third increase at prices between $25 and $29. The disposal over the last two quarters happened at prices between $25.50 and $29. The stock currently trades at $29.32.Media General (MEG): MEG was a minutely small 0.05% portfolio stake disposed of this quarter. Although the relative size of the position was small, it should be noted that Berkshire controlled ~2.7% of Media General as of last quarter.Stake Increases:Bank of New York Mellon Corp (BK):  BK is a 0.65% of the US stock portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.51 and $24.67. The stake was increased by 30% in Q2 2013 at prices between $26.70 and $30.55. The five quarters thru Q3 2015 had seen an about turn as there was a combined ~18% reduction at prices between $36 and $45. The stock currently trades at $47.53. This quarter saw a marginal increase.Charter Communications (CHTR): CHTR is a 1.98% 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. Last quarter saw a ~10% trimming at prices between $198 and $233. The stock currently trades at $263 compared to Berkshire’s cost-basis of around $160. This quarter saw a very minor increase.Liberty SiriusXM Group (LSXMA) (LSXMK): The tracking stock was acquired as a result of Liberty Media’s recapitalization in April. 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. This quarter saw a ~8% increase at prices between $31 and $36 and the stock is now at $35.41.Phillips 66 (PSX): PSX is a fairly large 5.05% 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 $76.79 and $81.63 and that was followed with a stake doubling in Q3 2015 at prices between $70.55 and $84.32. Last quarter saw another ~23% increase in the high-70s price range while this quarter saw a ~4% further increase at ~$80. The stock currently trades at $83.36 which is very close to Berkshire’s overall cost-basis. For investors attempting to follow Berkshire Hathaway, PSX is a good option to consider for further research. This quarter saw a very minor ~2% further increase.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.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 $38.49 and $46. The three quarters thru Q1 2016 had also seen a combined ~30% increase at prices between $30 and $50. Last quarter saw a ~17% further increase at prices between $27 and $39. The stock is now at $30.66 and the stake is at 0.72% of the US long portfolio. This quarter saw a ~3% further increase.Visa Inc. (V) and Wabco Holdings (WBC): These two very small positions (less than ~0.5% of the portfolio each) saw very minor increases this quarter.Note: Although the relative size of the position is small, it should be noted that Berkshire controls ~6% of Wabco Holdings.Stake Decreases:Deere & Company (DE): DE stake was first acquired in Q3 2012 when around 4M shares were purchased at prices between $75.11 and $82.70. The position remained steady until Q3 2014 when an additional ~3.6M shares were purchased at prices between $82 and $91.38. In Q4 2014, the position was increased by another 125% at prices between $80 and $91. Q4 2015 also saw another ~34% increase at prices between $72.89 and $80.91. The stock currently trades at $91.62 compared to Berkshire’s cost-basis of ~$80. The stake is at 1.40% of the portfolio and they control 6.7% of the business. Last two quarters have seen a combined ~10% trimming at prices between $76 and $88.Note: Berkshire avoided disclosing DE stake build-up in Q3 2014 by making use of the “”.Kinder Morgan Inc. (KMI): KMI is a very small 0.36% of the 13F portfolio stake established in Q4 2015 at prices between $14.54 and $32.68. This quarter saw a ~25% selling at prices between $18 and $23. The stock currently trades at $20.97.Liberty Media (LMCA) (LMCB) (LMCK): LMCA is a petite 0.10% stake first purchased in Q4 2011. It was increased by ~75% in Q1 2012 and roughly doubled the next quarter. Q2 2014 saw a ~24% stake reduction and since then had been kept steady. Q4 2015 saw the stake almost doubled at prices between $20 and $22.41 and that was followed with another ~29% increase the following quarter at prices between $18.56 and $22.62. The pattern reversed this quarter: ~40% reduction at prices between $19 and $29. The stock is currently at $30.24.Note: The shares held showed a ~75% reduction in Q2 2016 due to the recapitalization of Liberty Media in April: Liberty Media Corporation 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 had 30M shares of Liberty Media Corporation for which they received 7.5M shares of Liberty Media Group. The prices quoted above are adjusted for this transaction.Wal-Mart Stores (WMT):  WMT stake was first purchased in 2005. It had since been built up to a 2.94% portfolio stake as of Q1 2016. Last two quarters have seen a ~76% combined reduction at prices between $63 and $74. The stock currently trades at $70.49 and the stake is now at 0.73%. Berkshire’s cost-basis is at around $56. The large reduction in a long-term stake indicates a clear bearish bias.Kept Steady:American Express (AXP) and Coca Cola (KO):  These two very large stakes were kept steady during the last 3.5 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 ~15.6% and ~9.3% respectively.Apple Inc. (AAPL): AAPL is 1.34% of the 13F portfolio stake established in Q1 2016 at prices between $93 and $110 and increased by ~55% last quarter at prices between $90 and $112. The stock currently trades at $106.DaVita Inc. (DVA):  DVA is a 1.98% 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 $60.59 compared to Berkshire’s overall cost-basis of $45.33.Note: In May 2013, Berkshire’s Ted Weschler signed an accord with DVA, limiting open-market purchases to 25% of the company- the position is currently at 17.9% of the business.General Motors (GM):  GM is a 1.23% 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 $27.53 and $35.03.  Q1 2014 saw a 25% reduction at prices between $34 and $41 and the following quarter saw an about-turn: ~10% increase at prices between $31.93 and $37.09. Q3 2014 saw another ~21% increase at prices between $31.94 and $37.97. There was another ~22% increase in Q3 2015 at prices between $27.28 and $33.33. The stock currently trades at $33.28.Goldman Sachs (GS): GS is a 1.37% 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 $209.International Business Machines (IBM): IBM is Buffett’s fourth-largest stake at 10.02% of the portfolio. The original position was purchased in Q3 2011 at prices between $157.54 and $185.21. Since then, the share count has gone up by almost 40% through periodic purchases. The stock currently trades at $158 and Berkshire’s cost-basis is at around $170. Buffett controls 8.5% of the business. For investors attempting to follow Buffett, IBM is a good option to consider for further research.Note: Berkshire Hathaway’s  had the following regarding the IBM investment: “Unrealized losses at September 30, 2016 included $941 million related to our investment in IBM common stock of which $855 million had been in a continuous unrealized loss position for more than twelve months. Unrealized losses represented 7% of our cost. IBM continues to be profitable and generate significant cash flows. We currently do not intend to dispose of our IBM common stock and we expect that the fair value of this investment will recover and ultimately exceed our cost.” IBM stock traded at ~$159 at the time.Kraft Heinz Co. (KHC): KHC is currently the largest 13F stock position at 22.63% 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 $80.08.Moody’s Inc. (MCO):  MCO is a 1.78% of the US long portfolio stake. It is a very long-term position and Buffett’s cost basis is ~$10.  The stock currently trades at $100. Berkshire controls 11.5% of the business.Procter & Gamble (PG):  PG position is now minutely small at 0.02% of the 13F portfolio. The original stake was huge but was almost eliminated in Q1 2016 as a result of a deal with Procter & Gamble for Duracell: $4.2B in PG stock was exchanged for a recapitalized Duracell. The transaction closed on February 29, 2016.Restaurant Brands International (QSR): QSR is a 0.29% of the US long portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades just above that range at $43.01. It started trading in December 2014 following a merger/rename transaction between Tim Hortons and Burger King Worldwide. Berkshire’s stake in the business is ~4.2%.Twenty First Century Fox (FOX) (FOXA): FOXA is a minutely small 0.17% of the US long portfolio stake established in Q4 2014 at prices between $32 and $39 and increased by ~30% the following quarter at prices between $33 and $38. Q3 2015 saw another ~44% increase at prices between $25 and $34.50. The stock currently trades at $27.52.US Bancorp (USB): USB, a 2.83% 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 ~$32 and the stock is now at $48.73. Buffett controls 4.7% 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 $27.13. Buffett controls around 27% of the business and his cost-basis is ~$19. For investors attempting to follow Berkshire, USG is a good option to consider for further research.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 $78.81 and the position is at 0.79% of the portfolio (~10% of the business). There was marginal trimming last quarter at ~$90 per share.Verizon Communications (VZ): VZ is a small 0.61% of the US long portfolio position established in Q1 2014 at prices between $46 and $49. It was increased by ~36% the following quarter at prices between $46 and $50. The stock currently trades near the low end of those ranges at $46.18.Wells Fargo & Co. (WFC):  WFC is Buffett’s second-largest stake at 16.49% of the US long portfolio. 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 $53.22. Berkshire’s cost-basis is at ~$25.50.Note: Per a regulatory filing, Berkshire’s stake in WFC has crossed the 10% ownership threshold as a result of Wells Fargo’s buybacks.Axalta Coating Systems (AXTA): AXTA is a small 0.51% 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 near the low end of those ranges at $25.85. Although the position relative to the size of the portfolio is small, it is very significant that Berkshire owns ~9.8% of the business. For investors attempting to follow Berkshire, AXTA is a good option to consider for further research.Liberty LiLAC Group (LILA) (LILAK): Liberty LiLAC is a very small 0.09% stake. It saw a huge ~350% increase last quarter but relative to the size of the portfolio, the allocation is minutely small.Costco Wholesale (COST), General Electric (GE), Graham Holdings (GHC), Johnson & Johnson (JNJ), Lee Enterprises (LEE), MasterCard Inc. (MA), M&T Bank (MTB),  Mondelez International (MDLZ), NOW Inc. (DNOW), Sanofi (SNY), Torchmark Corporation (TMK), United Parcel Service (UPS), and Verisk Analytics (VRSK): These are very small positions (less than ~0.5% of the portfolio each) kept steady this quarter.Note 1: Per the , Berkshire has a $1.9B 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), the REIT spinoff from Sears (SHLD) at a cost-basis of $36.50 in his personal portfolio. SRG currently trades at $47.69.The spreadsheet below highlights changes to Berkshire Hathaway’s US stock holdings in Q3 2016:Buffett’s personal investment in Seritage (SRG) - The  came on December 10th 2015. Might mention it from Q2 2016 update.Q2 2016 10Q Notes: IBM - Unrealized losses at June 30, 2016 included approximately $1.5 billion related to our investment in IBM common stock (of which $848 million related to IBM shares that had been in a continuous unrealized loss position for more than twelve consecutive months), which represented 11% of our cost. IBM continues to be profitable and generate significant cash flows. We currently do not intend to dispose of our IBM common stock and we expect that the fair value of this investment will recover and ultimately exceed our cost. RBI Preferred - We own Class A 9% Cumulative Compounding Perpetual Preferred Shares of RBI (“RBI Preferred”) having a stated value of $3 billion. RBI, domiciled in Canada, is the ultimate parent company of Burger King and Tim Hortons. The RBI Preferred is entitled to dividends on a cumulative basis of 9% per annum plus an additional amount, if necessary, to produce an after-tax yield to Berkshire as if the dividends were paid by a U.S.-based company.13D/G/A, Form 3/4 thru 8/15/2016: PSX - Form 4 - 6/14&7&1/2016, 5/26&23/2016 - ~750K& ~450K & ~500K & ~650K & ~800K shares purchased @~80.Q1 2016 10Q Notes: IBM - “Unrealized losses at March 31, 2016 included approximately $1.5 billion related to our investment in IBM common stock, which represented 11% of our cost. IBM continues to be profitable and generate significant cash flows. We currently do not intend to dispose of our IBM common stock and we expect that the fair value of this investment will recover and ultimately exceed our cost.” PCP - Closed January 29, 2016. PG  Duracell transaction - Closed Feb 29, 2016 - $4.2B fair value in PG shares exchanged for Duracell. Holds $2.1B liquidation amount of Wrigley preferred stock. Dow Chemical - Holds 3M shares ($1000 liquidation value per share) of cumulative convertible perpetual 8.5% preferred stock ($41.32 strike - implies conversion to 72.6M shares).13D/G/A, Form 3/4 thru 5/17/2016: VRSN - Form 4 - 5/3/2016 - 12,952,745 shares - Marginal reduction at ~$90 per share. WFC - Form 3 & 13G/A -3/28/2016 - Notice as it crossed 10% due to repurchases - 506,308,470 shares - 10%.:Ownership Stakes: Updated ownership stakes in the big four: Berkshire increased its ownership interest last year in each of its “Big Four” investments – American Express, Coca-Cola, IBM and Wells Fargo. We purchased additional shares of IBM (increasing our ownership to 8.4% versus 7.8% at yearend 2014) and Wells Fargo (going to 9.8% from 9.4%). At the other two companies, Coca-Cola and American Express, stock repurchases raised our percentage ownership. Our equity in Coca-Cola grew from 9.2% to 9.3%, and our interest in American Express increased from 14.8% to 15.6%.Average cost-basis info: AXP - $8.49, T - $27.55, CHTR - $161.06, KO - $3.25, DVA - $45.53, DE - $79.99, GS - $57.42, IBM - $170.19, MCO - $10.05, Munich Re - $149.05 (previous info), PSX - $78.67, PG - $6.40, Sanofi - $76.73, USB - $31.80, USG - $19.27 (previous info), WMT - $56.58, and WFC - $25.46.13D/G/A, Form 3/4 thru 2/17/2016: AXTA - 13G/A 2/16/2016 - 23.32M shares - 9.8%. WFC - 13G/A 2/16/2016 - 506.3M shares - 9.9%. CHTR - 13G/A 2/16/2016 -10.28M shares - 9.2%. IBM - 13G/A 2/16/2016 - 81.04M shares - 8.4%. LMCA/LMCK - 13G 2/16/2016 - 15.39M shares - 6.9% - LMCK, 7.8M shares - 7.6%. Total - 14.5%. DE - 13G 2/16/2016 - 22.88M shares - 7.2%. CBI - 13G/A 2/16/2016 -3.5M shares - 3.3% - may be 8/31/2015 data (date of event). USB - 13G/A 2/16/2016 - 103.3M shares - 5.9%. WBC - 13G/A 2/16/2016 - 3.33M shares - 5.8%. KHC - 13G/A 2/16/2016 - 619M shares - 51% with 3G, 325.6M shares by Berkshire. PSX - 13G/A 2/16/2016 - 61.5M shares - 11.5%. PSX - Form 4 - 2/12/2016 - 75.55M shares.: Munich RE Stake Reduction: Per the article, the stake was reduced from 9.7% to 4.6%."