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MON, FEB 17, 2025
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WARREN BUFFETT WATCH
Q4 Portfolio Corrected Edition
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CORRECTION: In the original version of this newsletter, many of the share totals in the "Berkshire Hathaway's U.S. Equity Portfolio as of December 31, 2024" table were incorrect, predominantly because they showed Q3 figures instead of the correct Q4 numbers. The table below has been corrected. I apologize for my mistake. |
Apple money-losing selling streak ends at 300 million |
Berkshire Hathaway kept its Apple stake steady at 300 million shares in the fourth quarter, ending a 12-month selling streak that slashed the holding by more than 67%.
Berkshire disclosed the contents of its U.S. equity portfolio as of December 31 in a 13F filing with the SEC after today's closing bell. |
When Berkshire held its shareholders meeting last May, its 10-Q report for the first quarter indicated it had sold 126 million shares, 14% of its holding, between September 1, 2023, and March 31, 2024.
At the time, Warren Buffett predicted capital gains tax rates would be heading higher in the future to address growing budget deficits, so shareholders wouldn't mind paying a lower rate on the "little" Apple sale then, rather than a higher rate later. So far, the cap gains rate hasn't changed, but Apple's stock price rallied, making the decision to sell look, in hindsight, not that great at this point. AAPL is up almost 43% since the start of 2023's fourth quarter when Berkshire first started reducing its stake. |
The 615.6 million shares sold would be valued today at $150.6 billion. We don't know exactly when Berkshire sold the shares, so we can only make rough estimations on much money they brought in.
Using each quarter's intraday high as the hypothetical selling price, the shares would have sold for $134.3 billion, $16.3 billion less than their current value.
If Berkshire's timing wasn't perfect, and it sold at, say, the average closing price each quarter, the proceeds would have been around $117.9 billion, $32.6 billion below what they are worth now.
In addition, Berkshire had to pay billions in capital gains taxes on the sales. |
Bank of America sales continued after stake fell below 10% |
In mid-July, when Berkshire owned more than a billion shares of Bank of America, about 13% of the shares outstanding, it started a string of sales that brought the stake to just under 10% in mid-October.
As it sold those 266.5 million shares for almost $10.9 billion, it was required to disclose its moves within two business days.
That rule no longer applied once the stake went below 10%, so we've been in the dark on whether it continued to sell during the rest of the fourth quarter. |
Today's 13F, however, reveals Berkshire did sell another 86.1 million shares, bringing its stake down to 8.9%.
Over the third and fourth quarters, Berkshire shed 352.6 million shares, reducing its holding by 34%. The remaining 680.2 million shares (as of December 31) are currently worth almost $32 billion.
It remains Berkshire's third largest equity position after Apple and American Express.
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So far, those sales also appear to have left some money on the table with the stock up almost 20% since the start of the third quarter when the reductions began. |
Berkshire also made reductions in its holdings of two other banks. Its Citigroup position was slashed by more than 73%, a cut of more than $2.8 billion based on its closing price at the end of the quarter. It was the second biggest reduction after Bank of America's $5.2 billion.
Capitol One was trimmed by 18%, a $294 million drop. Several other financials remained untouched, however, including its giant $45 billion American Express stake. |
Constellation Brands was the only addition to Berkshire's portfolio during the fourth quarter, as it continued to sell more stock than it bought. At the end of Q4, it held 5.6 million shares of the self-described "leading international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy." |
Reuters File Photo | Lucy Nicholson |
It did get a 7% boost in after-hours trading tonight in the wake of the Berkshire news. |
Also, on the smallish side ... |
Berkshire eliminated small positions in the SPDR S&P ETF ($23 million), Ulta Beauty ($11 million), and the Vanguard S&P ETF ($23 million).
(Almost all of the $266 million Ulta Beauty stake added in the second quarter last year had been already sold in the third quarter.) |
DaVita sale this week was mandated by deal with the company |
Berkshire's sale this week of more than 203 thousand DaVita shares for $32 million was triggered by a 2024 agreement with the dialysis company that requires Berkshire to keep its stake under 45%.
DaVita's latest 10-K shows a decrease in its outstanding shares that would have put Berkshire above the limit. |
A disappointing forecast in DaVita's earnings report last night prompted a sell-off in the stock, which fell more than 9% on the week. The apparently incorrection perception that Berkshire's sale indicates waning enthusiasm for the stock may have contributed to the selling pressure. |
Berkshire takes a sip of Occidental |
The 3% increase in the size of Berkshire's Occidental Petroleum stake during the fourth quarter, as reported in today's 13-F SEC filing, is old news.
Berkshire's 28% stake in the oil giant is well above the 10% level that triggers a two-day disclosure rule, so we already knew Buffett & Co. bought $409 million of the stock over three days in mid-December at an average price of $45.99. |
This week we learned in a new SEC filing that Berkshire made a relatively small addition to its OXY holding with the purchase of 763,017 shares for $35.7 million on February 7. That's an average price of $46.82 per share. There has been speculation Berkshire would do some more buying as OXY fell back toward its December 19 52-week intraday low of $45.17. So far, however, it has not shown much appetite.
Berkshire's nearly 265 million shares are currently valued at more than $12.7 billion. |
BUFFETT AROUND THE INTERNET Some links may require a subscription |
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HIGHLIGHTS FROM THE ARCHIVE |
Raiders won’t have enough money to target Berkshire after Buffett (2023) |
Warren Buffett says he does think about what will happen when he no longer controls Berkshire but doesn’t “worry enormously” because no one will have enough money to take over the company. |
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Feb. 14, 2025 |
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 December 31, 2024 as reported in Berkshire Hathaway’s 13F filing on February 14, 2025, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. |
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 |
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