FRI, DEC 20, 2024

WARREN BUFFETT WATCH

Berkshire buys some bargains as stocks slump

Berkshire Hathaway has alarmed some on Wall Street by doing more selling than buying this year, helping to lift its cash level to a record $325 billion, which is more than the roughly $300 billion total value of its stock portfolio.

This week, however, it did some bargain buying as the prices of two of its holdings fell to 52-week lows amid the mid-week stock market pullback.

The purchases had to be disclosed quickly only because Berkshire's stakes were already above 10%, so we don't know if the buys are isolated or part of a broader portfolio boost.

We do know this week's buying was relatively modest, so it may not do much to ease the minds of those who think Warren Buffett is bearish about the market's future.

It did, however, spark solid gains for the stocks involved.

Berkshire puts $400 million more into faltering oil company bet

Berkshire's biggest purchase this week was the $409 million it spent on almost 9 million shares of Occidental Petroleum.

As of Thursday, it held more than 264 million shares valued at almost $12.5 billion. That's a 28% stake in the oil giant.

(Since Berkshire has two business days to disclose stock moves when its ownership is above 10%, we won't know until next week if it made more purchases today.)

It paid an average of $45.99 per share for its buys on Tuesday through Thursday, its lowest price since it started accumulating the stock in early 2022.

Since then, $60 has often been a buy trigger for Berkshire. But in the six months since it bought $435 billion of OXY in the month of June, Berkshire stayed put, even as the stock fell through the $50s.

And while Buffett has said repeatedly he likes buying a stock after it has dropped in price, (2009: "The fact I paid [more] yesterday doesn't bother me ... as long as I know the values in the business"), he is also wary of adding to a losing position.

Berkshire has paid roughly $14.4 billion for a stake now worth $12.5 billion.

A very small portion of that loss was erased today as investors reacted to the news late Thursday night that Berkshire had stepped in, sending OXY shares almost 4% higher after touching a 52-week low yesterday.

Satellite radio holding gets a modest addition

Berkshire made a smaller purchase this week of another stock that hit a 52-week low yesterday.

It paid $107 million for almost 5 million shares of Sirius XM Holdings, an average price of $21.60 per share, in its first buy since late October.

That brings its total holding to 117.5 million shares valued at $2.7 billion. It's a stake of almost 35%.

It's also been a losing bet, with Berkshire buying SIRI shares and Sirius tracking stocks throughout the year even as SIRI dropped 58% year-to-date on concerns about the satellite radio service's flagging customer base.

SIRI shares did, however, get a substantial boost from the Berkshire news, rallying by more than 12% today.

Verisign holding increased slightly in first addition since 2014

Berkshire bought shares of a third stock that is up from its 52-week low in May but still down 3.5% on the year.

It paid a very modest $45 million for 234 thousand shares of Verisign. It's the first addition to its position in the provider of internet services in more than a decade.

Berkshire's 13 million shares, a 13.6% stake, are valued at $2.6 billion.

Versign gained 2.8% in today's trading.

BUFFETT AROUND THE INTERNET

Some links may require a subscription

CNBC Pro (subscription): Warren Buffett’s Berkshire is having its best year since 2021 despite a buyback freeze and stock-selling spree

Investor's Business Daily: IBD Rating Upgrades: Berkshire Hathaway Cl A Flashes Improved Technical Strength

Barron's on MSN: Buffett Goofed by Selling Apple Stock Instead of Occidental, but All Isn’t Lost

HIGHLIGHTS FROM THE ARCHIVE

Buffett’s advice on making billions (1999)

Warren Buffett explains the process he would go through if he were getting out of school today with $10,000 to invest.

BERKSHIRE STOCK WATCH

Four weeks

Twelve months

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Dec. 20, 2024

Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.

Holdings are as of September 30, 2024 as reported in Berkshire Hathaway's 13F filing on August 14, 2024, except for:

Bank of America, which is as of October 15, 2024
Mitsubishi, which is as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.
Occidental Petroleum, which is as of December 19, 2024

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

CORRECTION: Last week's newsletter referred to portfolio manager Todd Weschler. To my knowledge, Todd and Ted have not merged into one person yet, so it should have been Ted Weschler.

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis.

Data also provided by THOMSON REUTERS