"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q4 2018 Update"
"Berkshire Hathaway's 13F stock portfolio value decreased from $221B to $183B this quarter.Their largest three holdings are at ~44% of the entire portfolio.Berkshire Hathaway increased several financials while dropping Oracle.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 02/14/2019. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q3 2018.During Q4 2018, Berkshire Hathaway’s (BRK.A) (BRK.B) 13F stock portfolio value decreased ~17% from $221B to $183B. The top five positions account for ~63% of the portfolio: Apple Inc., Bank of America, Wells Fargo, Coca Cola, and American Express. There are 45 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:Red Hat Inc. (RHT), Suncor Energy (SU), and StoneCo Ltd. (STNE): These are the three new stakes established this quarter. RHT is a 0.40% of the portfolio position. Last October, IBM agreed to acquire Red Hat for $190 per share cash. The stock is now at ~$180. The 0.16% SU stake was purchased at prices between $26 and $40 and it now goes for $32.55. STNE is a 0.14% position purchased at ~$21 per share compared to the current price of $21.27. For investors attempting to follow, these are good options to consider for further research.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.Stake Disposals:Oracle Corp (ORCL): ORCL was a ~1% position purchased last quarter at prices between $45 and $52 and disposed this quarter at prices between $42.50 and $52. It now goes for $51.48.Stake Increases:Bank of America (BAC): Berkshire established this large (top three) ~12% 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 $28.39. 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 last quarter at prices between $27.75 and $31.80 and a marginal increase this quarter.Note: Berkshire’s ownership stake in Bank of America is ~9.5%.US Bancorp (USB): The 3.23% 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 last quarter at prices between $50 and $55. The stock is now at $50.46 and Berkshire’s cost-basis is ~$38. There was a ~4% stake increase this quarter.JPMorgan Chase (JPM), PNC Financial (PNC), and Travelers Companies (TRV): These new positions established last quarter saw substantial increases this quarter. The 2.67% JPM stake was established at prices between $104 and $119 and increased by ~40% this quarter at prices between $92 and $115. The stock currently trades at ~$102. The 0.53% PNC stake was established at prices between $134 and $146 and increased by just over one-third this quarter at prices between $110 and $140. The stock is now at ~$121. TRV is a very small 0.39% position purchased at prices between $112 and $134 and it currently trades at ~$127.Bank of New York Mellon Corp (BK):  BK is a ~2% 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 $51.77. Berkshire’s cost-basis on BK is ~$45 per share.General Motors (GM):  GM is a 1.32% 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 this quarter at prices between $30.50 and $38.50. The stock currently trades at $38.89. Overall, Berkshire’s cost-basis on GM is ~$32.Stake Decreases:Apple Inc. (AAPL): AAPL is currently the largest 13F portfolio stake at ~22% 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 ~$171. There was a ~5% stake increase in Q2 2018. Last quarter saw a marginal increase while this quarter there was a similar reduction.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.Wells Fargo & Co. (WFC):  WFC is Buffett’s third-largest stake at 10.74% 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 $48.52. Berkshire’s cost-basis is at ~$24.50. Last six quarters have seen marginal trimming.Southwest Airlines (LUV): LUV is a 1.39% 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 $58. There was minor trimming in the last two quarters.Note: Berkshire owns ~9.5% of LUV.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 ~$342 compared to Berkshire’s cost-basis of ~$178. Last six quarters have seen a combined ~25% selling at prices between $250 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 ~$88. The stake is at ~1% of the portfolio. The last four quarters have seen a ~22% selling at prices between $63 and $98.Note: Berkshire controls ~8% of UAL.Phillips 66 (PSX): PSX is now a small 0.56% 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 in Q2 2018 at prices between $95 and $122 and that was followed with a ~56% reduction last quarter at prices between $109 and $123. This quarter saw another ~23% selling at prices between $78.50 and $118. The stock is now at $95.65.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 ~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.Kraft Heinz Co. (KHC): KHC is currently a large position at 7.66% 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 $47.34.Moody’s Inc. (MCO):  MCO is a 1.89% 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 ~$164. 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 $50.48 and the stake is now at 1.79% of the portfolio. There was a ~20% increase in Q2 2018 at prices between $49 and $56.Note: Berkshire controls ~9.5% of DAL.Goldman Sachs (GS): GS is a 1.67% 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: last quarter saw a ~40% stake increase at prices between $220 and $243. It currently trades at ~$193.DaVita Inc. (DVA):  DVA is a ~1% of the portfolio position that was aggressively built-up over several quarters in the 2012-13 time frame at prices between $30 and $49. The stock currently trades at $58.09 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 buying continued till Q2 2014 at prices up to $63. The stock currently trades at $175 and the position is at ~1% 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 $40.36.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 $43.05. Buffett controls around 31% of the business and his cost-basis is ~$19.Note: 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 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.American Airlines (AAL): AAL stake was first purchased in Q3 2016. The position is now at 0.77% 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 $36.11. There was a ~3% trimming in Q2 2018 and a similar reduction last quarter.Note: Berkshire controls ~9% of AAL.Sirius XM Holdings (SIRI): The 0.43% 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 $5.92.Teva Pharmaceuticals (TEVA): TEVA is a very small 0.36% 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 $17.28.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 $24.08 and the stake is at 0.31% of the 13F portfolio.Axalta Coating Systems (AXTA): AXTA is a small 0.31% 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 $26.47. Berkshire owns 10.1% of the business.Store Capital (STOR): The 0.29% STOR stake was established in Q2 2017 in a private placement transaction at $20.25 per share. The stock is now at $31.96.Synchrony Financial (SYF): SYF is a 0.27% 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 $30.83.Note: Synchrony is the private label credit-card business split-off from GE that started trading in August 2014 at ~$23 per share.Restaurant Brands International (QSR): QSR is a 0.24% of the 13F portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades well above that range at $63.83. 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 $42.88. 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 $13.16.Note 3: Per last year’s , Berkshire had a $1.7B position in Sanofi – it is not in the 13F report as they hold the securities listed in Euronext Paris which is outside the realm of US 13F securities. The current  does not show this as a top holding as it probably dropped off the top-fifteen.The spreadsheet below highlights changes to Berkshire Hathaway’s 13F stock holdings in Q4 2018:11/3 –  - Book value per class A equivalent share was $228,712 at Sept. 30, 2018. Buybacks: From Dec. 31, 2017 and Sept. 30, 2018, about 4.14M of class B shares were acquired; during that same time 25.9M class B shares were issued either through class A share conversions or stock options exercised. Per , Berkshire bought back shares at an average price of $312,806.74 per A share and $207.09 per B share – current PPS is around that range. BAC may have been increased to 900M shares (9.2% of business) – 13F has 679M shares.10/28 –  – around $600M in Paytm and StoneCo.13G/A – 9/10- PSX – 22.19M shares – 4.8% of business.Regulatory Filings thru 11/15/2018: Several Form 4s etc for minor transactions by Ajith Jain & a 13D/A 10/1 by Bill Gates. 13D/A – 11/13 – DVA – 38.57M shares – 23.2% of business, 13G – 11/9 – StoneCo – 14.17M shares – 11.3% of business, 13G/A – 9/10 – PSX – 22.2M shares – 4.8% of business,"