"Tracking Warren Buffett’s Berkshire Hathaway Portfolio – Q4 2016 Update"
"Berkshire Hathaway's 13F stock portfolio value increased from $129B to $148B this quarter.Their largest three holdings are at ~48% of the entire portfolio.Berkshire Hathaway increased Apple and the stakes in the major airlines while reducing Wal-Mart & Verizon. They also dropped Deere & Kinder Morgan.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 02/14/2017. Please visit our  article series for an idea on how his holdings have progressed over the years and  for the moves in Q3 2016.During Q3 2016, Berkshire Hathaway’s (BRK.A) (BRK.B) US long stock portfolio increased from $128.79B to $147.99B. The top five positions account for ~65% of the portfolio: Kraft Heinz Co., Wells Fargo, Coca Cola, International Business Machines, 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.New stakes:Southwest Airlines (LUV), Monsanto Company (MON), and Sirius XM Holdings (SIRI): These are the new stakes this quarter. LUV is a 1.46% portfolio stake purchased at prices between $38.50 and $51 and the stock is now above that range at $55.31. The 0.57% MON position was established at prices between $98 and $106 and the stock currently trades at $108. The 0.50% SIRI stake was purchased at prices between $4.08 and $4.61 and it currently goes for $4.74.Note 1: Berkshire owns 7% of LUV and 3.5% of SIRI.Note 2: In September 2016, Bayer AG (BAYRY) agreed to acquire Monsanto in a $128 per share cash deal.Stake Disposals:Deere & Company (DE): DE stake was first acquired in Q3 2012 when around 4M shares were purchased at prices between $75 and $83. The position remained steady until Q3 2014 when an additional ~3.6M shares were purchased at prices between $82 and $91.50. 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 $72.50 and $81. Last two quarters had seen a combined ~10% trimming at prices between $76 and $88. The disposal this quarter was at prices between $85 and $104. The stock currently trades at $110. Berkshire’s cost-basis was ~$80 and his ownership stake as of last quarter was ~6.7%. The disposal indicates a bearish bias.Kinder Morgan Inc. (KMI): KMI was a very small 0.36% of the 13F portfolio stake established in Q4 2015 at prices between $14.54 and $32.68. Last quarter saw a ~25% selling at prices between $18 and $23. The remaining position was disposed of this quarter at prices between $19.50 and $23. The stock currently trades at $22.54.Liberty Formula One (FWONA) (FWONK) previously Liberty Media (LMCA) (LMCK): FWONA was 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 last quarter: ~40% reduction at prices between $19 and $29. The disposal this quarter was at prices between $22 and $33. The stock is currently at $30.98.Note 1: Liberty Media acquired Formula One in a deal that closed last month. Following the transaction, the name & stock tickers were changed to Liberty Media Formula One and FWONA/FWONK respectively.Note 2: The shares held showed a ~75% reduction in Q2 2016 due to the recapitalization of Liberty Media in April 2016: 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.Lee Enterprises (LEE) and NOW Inc. (DNOW): These are minutely small positions (less than ~0.1% of the portfolio each) disposed of this quarter.Stake Increases:Apple Inc. (AAPL): AAPL is ~4.5% 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. This quarter saw another ~275% increase at prices between $106 and $118. The stock currently trades at $135. The activity indicates a clear bullish bias.American Airlines (AAL), Delta Air Lines (DAL), and United Continental Holdings (UAL): AAL, DAL, and UAL stakes were first added last quarter. AAL is a 1.44% portfolio position established at prices between $28 and $39 and doubled this quarter at prices between $36.50 and $50. It is now at $46.57. DAL was a very small 0.19% position last quarter. The stake saw a whopping ~850% increase to a ~2% portfolio stake this quarter at prices between $39 and $52. The stock currently trades at $49.86. The similarly small 0.18% UAL position also saw a huge ~540% increase to a 1.43% portfolio stake this quarter at prices between $52.50 and $76. It currently goes for $73.74.Note 1: Combined, the positions in the four major airlines add up to ~$9.4B (~6.5% portfolio stake).Note 2: Berkshire controls 8.8% of AAL, 9.1% of UAL, and 8.2% of DAL.Bank of New York Mellon Corp (BK):  BK is a 0.69% 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. The stock currently trades at $46.82. Last two quarters have seen marginal increases.Stake Decreases:Wal-Mart Stores (WMT):  WMT stake was first purchased in 2005. It was built up to a ~3% portfolio stake as of Q1 2016. Last two quarters had seen a ~76% combined reduction at prices between $63 and $74. The remaining position was almost sold out (~90% reduction) this quarter at prices between $67 and $72. The stock currently trades at $68.66. Berkshire’s cost-basis was ~$56. The large reduction in a long-term stake indicates a clear bearish bias.Verizon Communications (VZ): VZ position was 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 0.61% portfolio position was almost sold out (less than 1000 shares remain) this quarter at prices between $46 and $54. The stock currently trades at $48.27.Kept Steady:Kraft Heinz Co. (KHC): KHC is currently the largest 13F stock position at 19.21% 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 $90.81.Wells Fargo & Co. (WFC):  WFC is Buffett’s second-largest stake at 17.86% 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 $57.98. 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.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 ~15.6% and ~9.3% respectively.International Business Machines (IBM): IBM is Buffett’s fourth-largest stake at 9.11% of the portfolio. The original position was purchased in Q3 2011 at prices between $158 and $185. Since then, the share count has gone up by almost 40% through periodic purchases. The stock currently trades at ~$180 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.Phillips 66 (PSX): PSX is a fairly large 4.71% 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 $79.98 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.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 15.5% of PSX.US Bancorp (USB): USB, a ~3% 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 $54.55. Buffett controls 4.7% of the business.Charter Communications (CHTR): CHTR is a 1.84% 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 $322 compared to Berkshire’s cost-basis of around $160.Note: Berkshire controls 3.5% of CHTR.Goldman Sachs (GS): GS is a 1.77% 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 ~$250.DaVita Inc. (DVA):  DVA is a 1.67% 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 $64.73 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.Moody’s Inc. (MCO):  MCO is a 1.57% 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 ~$109. Berkshire controls 11.5% of the business.General Motors (GM):  GM is a 1.18% 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.  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 $32 and $37. Q3 2014 saw another ~20% increase at prices between $32 and $38. There was another ~20% increase in Q3 2015 at prices between $27 and $33.50. The stock currently trades at $37.24.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 $33.41. Buffett controls around 27% of the business and his cost-basis is ~$19.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. Last quarter saw a ~8% increase at prices between $31 and $36 and the stock is now at $35.92.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 $82.68 and the position is at 0.67% of the portfolio (~10% of the business).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 $35.51 and the stake is at 0.56% of the US long portfolio.Note: Berkshire controls 7.9% of Liberty Global.Axalta Coating Systems (AXTA): AXTA is a small 0.43% 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 $29.66. Berkshire owns ~9.8% of the business. For investors attempting to follow Berkshire, AXTA is a good option to consider for further research.Restaurant Brands International (QSR): QSR is a 0.27% of the US long portfolio position established in Q4 2014 at prices between $35 and $42. The stock currently trades well above that range at $54.53. 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%.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 $30.30.Liberty LiLAC Group (LILA) (LILAK): Liberty LiLAC is a very small 0.06% stake. It saw a huge ~350% increase in Q2 2016 but relative to the size of the portfolio, the allocation is minutely small.Procter & Gamble (PG):  PG position is 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.Costco Wholesale (COST), M&T Bank (MTB), MasterCard Inc. (MA), Torchmark Corporation (TMK), General Electric (GE), Sanofi (SNY), Verisk Analytics (VRSK) Graham Holdings (GHC), Johnson & Johnson (JNJ), Mondelez International (MDLZ), United Parcel Service (UPS), Visa Inc. (V) and Wabco Holdings (WBC): These are very small positions (less than ~0.5% of the portfolio each) kept steady this quarter.Note 1: Berkshire controls ~6% of Wabco Holdings.Note 2: 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 3: 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 $44.39. SRG is an REIT spinoff from Sears (SHLD) that started trading in July 2015.Note 4: Berkshire has a huge 700M share position in Bank of America (BAC) through the ownership of warrants (strike price $7.14, 2021 expiry). The cost to exercise is $5B and the current value is ~$16.8B. Berkshire will probably wait till 2021 to exercise.The spreadsheet below highlights changes to Berkshire Hathaway’s US stock holdings in Q4 2016:Q3 2016 10Q Notes; IBM - 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. 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. The RBI Preferred is redeemable at the option of RBI beginning on December 12, 2017. If not redeemed prior to December 12, 2024, we can cause RBI to redeem the RBI Preferred. In either case, the redemption price will be 109.9% of the stated value of such shares.13D/G/A, Form 3/4 etc. thru 11/15/2016: Form 4 - 8/23 to 9/19/2016 - PSX - increase to 80.69M shares at cost-basis of ~$77.50."