FRI, MAY 06, 2022
Buffett's Occidental buying binge resumes
After a break of almost two months, Warren Buffett is again buying shares of Occidental Petroleum for Berkshire's Hathaway's portfolio, raising its stake (excluding unexercised warrants) to 15.2% from 14.6%.
In an SEC filing Wednesday night, the company discloses that it bought a total of 5.9 million shares on Monday and Tuesday at an average price of $57.11.
At tonight's closing price of $64.94, a three-year high, the shares added this week are worth more than $382 million.
Berkshire' total reported stake of 142.3 million shares is worth $9.2 billion, which is 2.6% of the total value of Berkshire's publicly disclosed equity portfolio.
At the Berkshire sharesholders meeting on Saturday, Buffett said that after reading an Occidental presentation to analysts in late February, he decided that what CEO Vicki Hollub "was saying made nothing but sense. And I decided that it was a good place to put Berkshire's money... There was nothing mysterious about it."
He also said that with many people treating large U.S. companies as "poker chips," enough shares were available for Berkshire to buy a large chunk of Occidental over a short period of time in March.
"The investors just were sitting around and there weren't very many, and the money was being made, essentially, by a bunch of people gambling on things. And that enabled us, in a two-week period, to buy 14% of a business that's been around for decades."
As he was discussing how Apple's share buybacks enable Berkshire to raise its stake without spending any money, Buffett mentioned that he had indeed spent some money to "buy a little more Apple in the first quarter or so. We decided we wanted to own a greater interest."
On Sunday, Buffett told CNBC's Becky Quick he bought around $600 million worth of the stock after a three-day decline.
"Unfortunately the stock went back up, so I stopped. Otherwise who knows how much we would have bought?"
As CNBC.com noted, "There have been plenty of buying opportunities for Buffett this year as Apple shares came under pressure amid fears of rising interest rates and supply chain constraints. The stock fell 1.7% in the first quarter with multiple three-day losing streaks throughout the period."
Meanwhile, Barron's says its analysis of clues in Berkshire's 10-Q report indicates that Verizon was probably the "focus" of the company's $9.7 billion in equity sales during the first quarter, and had probably disposed of "all or most" of its stake.
It also says Berkshire "appears to have been a buyer of about $10 billion of financial stocks during the quarter," potentially reversing sales of JPMorgan Chase, Goldman Sachs, and Wells Fargo in 2020 and 2021.
Berkshire is due to release details later this month on its equity holdings.
Berkshire Hathaway shareholders overwhelmingly defeated a proposal requesting the company's board chairman be an independent director.
That would mean Buffett would have to be just Berkshire's CEO.
CalPERS got some headlines when it said it would vote for the proposal because it thinks separating the roles is generally a better corporate governance practice.
At as fair as Berkshire is concerned, however, its shareholders disagree.
In a filing this week, the company reports the proposal was defeated by the "Class A and Class B common shareholders voting together as a single class," with 448,868 against (88%), 54,425 (11%) in favor, and 6,851 (1%) abstaining.
Shareholders proposals on climate risk, greenhouse gas emissions, and diversity efforts did better, with each getting around 26% of the votes.
BUFFETT AROUND THE INTERNET
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HIGHLIGHTS FROM THE ARCHIVE
BERKSHIRE'S TOP U.S. STOCK HOLDINGS - May 6, 2022
Berkshire's top holdings of disclosed publicly-traded U.S. stocks by market value, based on today's closing prices.
Holdings are as of December 31, 2021 as reported in Berkshire Hathaway’s 13F filing on February 14, 2022, except for Apple, Bank of America, and U.S. Bancorp, which also include shares held as of December 31, 2021 as disclosed in New England Asset Management’s 13F filing on February 14, 2022, and except for Occidental Petroleum, which is as of May 3, 2022.
In addition to U.S. stocks, shares held as of December 31, 2021 of China's BYD, as listed in Buffett's 2021 letter to shareholders, are included. The price of those shares in U.S. trading is used to approximate the current market value of the position. The value of the stake as a percentage of the company's market value is fixed at what was listed as of December 31, 2021 in the letter.
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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-- Alex Crippen, Editor, Warren Buffett Watch