Berkshire filing makes for fascinating reading

Even though Buffett’s Berkshire Hathaway got plenty of publicity for some of their moves in the March quarter – especially for buying more shares in Chevron and Occidental Petroleum, the quarter fund managers’ filing with the US Securities and Exchange Commission revealed more intriguing dealings.

The 13F filing revealed that Berkshire Hathaway bought stakes in Citigroup and Paramount Global while nearly eliminating an $US8.3 billion interest in telco Verizon Communications.

Berkshire reported new stakes in chemicals company Celanese Corp, insurance holding company Markel Corp and drug distributor McKesson Corp

The big new information in Monday’s filing is that Berkshire held 55 million shares of Citigroup on March 31, a stake now worth $US2.6 billion.

That’s a 2.5% stake and adds to holdings in other banks such as Bank of America, where Berkshire is the biggest shareholder. Buffett also quit the remaining stake in Well Fargo (which at one stage was a core holding before it made silly errors in cross selling and blaming staff for the costly errors).

At the same time the Fed blocked Buffett and Berkshire from lifting its stake in Well Fargo above 10% which in the end helped save Buffett the embarrassment of buying shares in Well Fargo, just as its cross selling and other scandals were coming to light.

The mistakes, management charges and hits to the bank’s capital standing by the US Federal Reserve saw Buffett downgrade Wells Fargo to just an investment and gradually quit the stock, with the final $US32 million or so sold off in the three months to March.

Berkshire owns 69 million shares of media company Paramount Global (which controls Ten Network in Australia), now worth about $US1.9 billion.

Berkshire Hathaway also added substantially to its stake in Chevron and returned to Occidental Petroleum. Berkshire also boosted its holding in Activision Blizzard. it also picked up a big stake in HP, the printer maker.

The Chevron, Occidental, Activision (a 9.6% stake), and HP purchases have already been disclosed through different sources, including separate regulatory filings, Berkshire’s first-quarter report, and by CEO Warren Buffett at Berkshire’s annual meeting on April 30.

Berkshire sold three stakes completely: AbbeVie, Bristol-Myers Squibb and Well Fargo. Its new (or renewed) purchases were Occidental, HP, McKesson, Celanese, Paramount Global, Citigroup.

Four holdings were cut – Verizon, Store Capital, Royalty Pharma and Kroger. Holdings were topped up included Chevron, Activision Blizzard, Floor and Decor, RH, GM and Apple.

Berkshire’s core holdings at the end of the quarter were:

  • Apple: up 3.79 million shares, to 890.9 million valued at $155.6 billion, representing 5.5% of shares outstanding
  • Bank of America Corp.: unchanged at 1.01 billion valued at $41.6 billion
  • American Express Co.: unchanged at 151.6 million valued at $28.4 billion
  • Chevron Corp.: up 120.9 million, to 159.2 million valued at $25.9 billion, representing 8.2% of shares outstanding
  • Coca-Cola Co.: unchanged at 400 million valued at $24.8 billion

What will be interesting to US analysts is whether Buffett keeps buying this quarter with prices at levels not seen since early 2020.