Buffett’s Latest Trades

On Sunday, Warren Buffett’s latest trades were revealed via Berkshire Hathaway Inc.’s (BRK.B) 13F filing, which is a filing that gives us information on all of the transactions that took place over the third quarter of 2015 — the quarter ending September 30 — in the stock portfolio managed by the legendary investor.

This filing can provide some valuable insight into where Warren Buffett thinks the best investments might lie.

Now, it might not make sense to piggyback on his trades and simply buy and/or sell whatever he has because these filings are generally released 45 days after the most recent quarter ended, but it would appear to be an intelligent move to investigate exactly where the most successful investor of all time is (and isn’t) putting his capital to work.

It’s also important to note that Buffett allows two other executives – Todd Combs and Ted Weschler – to authorize smaller transactions, so it’s difficult sometimes to decipher who bought and/or sold what.

Below, I’m going to go over every transaction and give some quick thoughts on each respective company.

I’m going to do my best to infer what each purchase and sale means, but it’s obviously impossible to know exactly what Warren Buffett or his lieutenants were thinking when each transaction was executed.

Let’s take a look!

Please keep in mind this list is for informational purposes only, and is not a recommendation to buy any specific stocks.

Purchases

Purchased 3,199,474 shares of Axalta Coating Systems Ltd. (AXTA)
Purchased 59,320,756 shares of AT&T Inc. (T) – NEW POSITION
Purchased 1,766,925 shares of Charter Communications, Inc. (CHTR)
Purchased 9,000,000 shares of General Motors Company (GM)
Purchased 1,468,335 shares of International Business Machines Corp. (IBM)
Purchased 325,442,152 shares of Kraft Heinz Co. (KHC) – NEW POSITION
Purchased 1,614,492 shares of Liberty Global PLC (LBTYA)
Purchased 3,800,000 shares of Liberty Media Corp. Class A (LMCA)
Purchased 7,386,257 shares of Liberty Media Corp. Class C (LMCK)
Purchased 61,486,926 shares of Phillips66 (PSX) NEW POSITION
Purchased 7,645,706 shares of Suncor Energy Inc. (SU)
Purchased 2,723,772 shares of Twenty-First Century Fox Inc. (FOXA)
Purchased 517,139 shares of Liberty Global LiLAC-A (LILA)NEW POSITION
Purchased 267,348 shares of Liberty Global LiLAC-C (LILAK)NEW POSITION

Sales

Sold 568,208 shares of Bank of New York Mellon Corp. (BK)
Sold 7,343,731 shares of Chicago Bridge & Iron Company N.V. (CBI)
Sold 257,980 shares of Deere & Company (DE)
Sold 31,353,468 shares of DIRECTV (DTV) – SOLD OUT
Sold 1,672,012 shares of Goldman Sachs Group Inc. (GS)
Sold 1,174,911 shares of Media General Inc. (MEG)
Sold 5,646,721 shares of Viacom, Inc. (VIAB) – SOLD OUT
Sold 218,006 shares of WABCO Holdings Inc. (WBC)
Sold 4,200,000 shares of Wal-Mart Stores, Inc. (WMT)

Purchases

Axalta Coating Systems Ltd. (AXTA) – Purchased 3,199,474 shares.

axtaBerkshire initiated a new position in this company last quarter with 20 million shares. This transaction brings it up to 23,199,474 shares.

Axalta Coating Systems Ltd. manufactures, markets, and distributes coatings systems that primarily serve the automotive industry.

Berkshire is the second largest shareholder in this company, just behind The Carlyle Group LP (CG), who itself bought Axalta directly from E. I. Dupont De Nemours And Co. (DD) in 2013. Originally a private transaction, Carlyle took the company public through an IPO in November 2014, but retains a large stake in the company.

Axalta’s results since it went public are obviously limited, so it’s hard to get a read on where it’s going.

That said, Berkshire has been as of late aggressively buying up stakes in companies that are heavily tied to the auto manufacturing and retail industry. Axalta fits the bill as a major coatings company. This position ties in nicely with Berkshire’s private subsidiary Benjamin Moore & Co.

Results for the last fiscal year were solid, with revenue up just over 10% YOY. And net income is in positive territory, which is an improvement over the small loss registered in FY 2013.

Axalta has corporate history dating back almost 150 years, and the auto industry has seemingly never been stronger. So it appears Berkshire is just following that action closely.

AT&T Inc. (T) – Purchased 59,320,756 shares.

tThis is technically a new position for Berkshire, and a sizable one at that, valued at just under $2 billion.

AT&T Inc. is the second largest wireless carrier in the US, supporting over 130 million wireless phone connections, approximately 16 million high-speed internet connections, and more than 45 million video connections.

Although this is a new position for Berkshire, the company simply received the shares as part AT&T acquiring DIRECTV. Berkshire was a major investor in DIRECTV, so they now have the AT&T shares they were entitled to as part of that transaction.

I personally have a position in the company. It’s tough not to like it here. The yield is near 6%, and shares aren’t particularly expensive at less than 12 times next year’s earnings. Moreover, free cash flow is set to soar after acquiring DIRECTV.

Now one of the largest all-encompassing media and content companies in the world, they have a lot more exposure to fast-growing Latin American markets, which is key to some of the growth initiatives management has laid out.

Not a stock that’s going to knock anyone’s socks off in terms of fast growth. But a big, dependable dividend that’s been growing for more than 30 consecutive years sure is appealing in a low-rate environment. And it’s no secret that Buffett is a fan of collecting dividends which he can use to allocate elsewhere as he sees fit. Well, AT&T is one of the biggest payers out there.

Charter Communications, Inc. (CHTR) – Purchased 1,766,925 shares.

chtrThis transaction brings Berkshire’s stake in Charter up to 10,281,603 shares.

Charter Communications, Inc. provides cable services throughout the US, and the fourth largest such provider. They serve approximately 4.5 million customers across more than two dozen states.

Berkshire has been actively and aggressively building a sizable stake in the cable company, with its investment now worth almost $2 billion.

I’ve long been a bit bewildered by the continued buying of equity in Charter seeing as how it’s a small player in an industry that is very competitive and in secular decline. Specific to Charter, they’ve not been able to eke out a profit over the last ten fiscal years. And their fundamentals, for the most part, aren’t particularly impressive.

However, free cash flow has markedly improved over the last few years. And this may turn out to be a solid investment after all, with Time Warner Cable Inc. (TWC) agreeing to merge with Charter, which would create one of the largest cable/media companies in the country. That transaction also includes a contingency to acquire privately held Bright House Networks. In an industry where size matters, this is a potential big win for Charter and Time Warner shareholders.

That merger hasn’t been approved yet, so it remains to be seen how this all turns out. But I think this could work out better than anticipated for Berkshire.

General Motors Company (GM) – Purchased 9,000,000 shares.

gmThis transaction brings Berkshire’s position in GM up to 50,000,000 shares.

General Motors Company designs, manufactures, and sells a variety of cars, trucks, and auto parts across the globe.

Berkshire continues to buy huge swaths of GM stock, with this position now valued at more than $1.7 billion. And this also follows a larger trend where, as noted earlier, Berkshire is gaining exposure to the auto industry at large.

This trend might be a little surprising since Buffett has long been lukewarm (at best) on the auto industry, routinely noting the fortunes lost in the industry over the last 100 or so years. But this is made less surprising because it’s highly likely that one of Buffett’s lieutenants is behind the GM transactions.

The new GM (the one that emerged from bankruptcy in late 2010) is leaner and meaner than the old GM, which is necessary in this industry where every penny counts. Revenue and profit have oscillated a bit over the last few years, which is not unusual for this cyclical industry. However, GM’s free cash flow as of late has been quite strong.

Notably, the stock pays a rather hefty dividend – the yield sits at 4.1% right now. And with the way auto sales continue to grow after consumers sat on used cars for so long to save money due to the financial crisis, GM’s future seems to bode well.

International Business Machines Corp. (IBM) – Purchased 1,468,335 shares.

ibmThis newest purchase brings Berkshire’s stake in IBM up to 81,033,450 shares.

International Business Machines Corp. is an information technology company, providing technology-driven solutions to customers globally.

I don’t think this buy should surprise anyone. Buffett has been vocal about his support for IBM since initiating a massive position in the company back in 2011.

I also own IBM stock. And I’m betting on its future alongside Buffett.

Just consider for a moment that, last fiscal year, IBM generated over $12 billion in free cash flow. While the media focuses on flat revenue over the last decade, IBM continues to pump out massive amounts of cash flow. They’re using a substantial portion of that to buy back stock, reducing their outstanding share count by almost 38% over the last decade. Of course, they also pay out a large dividend – the stock yields almost 4% right now.

Buffett has noted a few times now that he’d rather see IBM’s stock price flounder while the company spends so much money acquiring its shares back. After all, would one rather pay more or less for stock? The answer, of course, is less. And the lower IBM’s stock price is, the more accretive those buybacks become over the long haul.

A key driver to IBM’s success, however, is how well their investments in growth businesses like cloud, security, and analytics pan out. The recent results have been promising, but this is a giant still in turnaround mode. IBM has made that turn many times over its lengthy history (dating back more than 100 years), and Buffett is right far more often than he’s wrong. Tough to bet against both here.

Kraft Heinz Co. (KHC) – Purchased 325,442,152 shares.

khcThis is technically a new position for Berkshire, just now showing up on the new 13F.

Kraft Heinz Co. is a food and beverage company that owns some of the most well-known brands in the industry, including Kraft, Heinz, Oscar Meyer, and Maxwell House.

Although this is the first time we’re seeing this stock on Berkshire’s 13F, that’s simply because this position is the result of Berkshire’s prior investment in Kraft Foods and its separate participant, along with 3G Capital, in the purchasing of Heinz. Later, Berkshire, along with 3G, was involved in the merger between Kraft and Heinz, creating the company we now see.

Buffett has long been a fan of branded food and beverage companies, as the industry has some of the widest economic moats and most substantial competitive advantages. People have to eat. And it’s likely that people are going to continue buying that which tastes good and offers a great value. Branded food products tend to be popular due to taste, awareness, availability, and awareness.

Kraft Heinz is now fifth largest food and beverage company in the world, which itself confers huge economies of scale.

However, it should be noted that the packaging food space is under duress as younger consumers tend to be a bit choosier in terms of what they eat. So it remains to be seen how that impacts Kraft Heinz (and companies like it) over the next decade or so.

In addition, the financial results of this company are difficult to decipher because of the newness of the merger.

Nonetheless, there’s a lot to like here. Great brands, competitive distribution and scale, and a great yield to boot.

Liberty Global PLC (LBTYA) – Purchased 1,614,492 shares.

lbtyaBerkshire now owns 11,957,285 shares in LBTYA after this transaction.

Liberty Global PLC, through its subsidiaries, provides various media and telecommunications services, such as video, broadband internet, fixed-line telephone, and mobile telephone services.

This is another theme for Berkshire. They continue to buy up stakes in larger media companies, especially those that deliver content on a large scale. And since Liberty is the largest international cable company and one of the largest broadband internet companies in the world, this fits the mold quite well.

Perhaps surprisingly, Liberty’s fundamentals aren’t all that strong.

Regular, recurring profit has been almost impossible to come by for them. They operate with a somewhat sizable amount of debt, and returns on invested capital have been fairly poor.

And this is a very competitive industry that requires heavy use of expensive assets (hence the debt).

In addition, one has to be concerned about secular changes in content consumption and how that affects cable subscriptions.

One other point is that the stock doesn’t appear notably cheap right now.

Regardless, content consumption will likely remain strong in one form or another, and access to the internet has never been more important.

Liberty Media Corp. Class A (LMCA) – Purchased 3,800,000 shares.

lmcaThis purchase brings Berkshire’s position up to 7,800,000 shares.

Liberty Media Corp. is a media, communications, and entertainment company.

So, again, we see a theme here. More exposure to media and entertainment. Although, Liberty operates solely in North America, which complements Liberty Global’s international businesses.

Liberty’s results have oscillated somewhat wildly over the last few fiscal years, so it’s difficult to get a good read on the business’s overall quality and growth trajectory.

One other concern is that John C. Malone owns a majority stake in this company, so smaller shareholders are somewhat at his whim. Fortunately for Berkshire, however, they’re no small shareholder.

One thing that is really attractive about Liberty Media is their diversification. They own satellite radio assets, a major league baseball team, and interests in cable companies and Live Nation Entertainment, Inc. (LYV).

So this certainly isn’t some pure-play cable company, but rather a diversified media conglomerate. Again, Buffett’s longstanding interest in media and entertainment is obviously alive and well.

Liberty Media Corp. Class C (LMCK) – Purchased 7,386,257 shares.

Berkshire now owns 15,386,257 shares of LMCK.

Liberty Media Corp. is a media, communications, and entertainment company.

This is essentially the same stock as LMCA in the sense that it offers the same percentage of equity ownership Liberty Media. However, the difference is that it is a non-voting stock class, whereas the Class A shares offer one vote per share.

Phillips66 (PSX) – Purchased 61,486,926 shares.

psxThis is technically a new position for Berkshire, meaning its position is the same size as the transaction.

Phillips 66 is primarily an independent refiner, with assets in midstream and chemicals.

This is actually not truly a new position for Berkshire. They were given special permission by the SEC to withhold information on the last 13F, making it seem like they sold out. However, Berkshire was actually adding to its stake in Phillips66, and rather aggressively so at that. The stake in PSX is now worth just over $5.6 billion, which, even for Berkshire, is significant.

I noted with Berkshire’s last quarterly update that “because of PSX’s unique position in the marketplace, they’re fairly well placed for the foreseeable future. They have no upstream operations and their midstream, chemical, and refining operations have all been extremely strong lately. FY 2015 Q2 EPS was up significantly compared to 2014 Q2.”

As such, it should be no surprise that Berkshire was actually investing heavily here. I remain a very happy shareholder in the company, although Berkshire has been reducing its overall energy exposure for some time now. That’s why I didn’t suspect anything afoot.

Buffett noted that he doesn’t see this as a play on oil at all due to the extensive chemicals and refining businesses, and I agree with that, as I noted last month.

All in all, I remain very pleased with Phillips66’s results as of late. They are a volatile holding, but Berkshire (and Buffett) tend to be very long-term investors.

Suncor Energy Inc. (SU) – Purchased 7,645,706 shares.

suThis transaction brings Berkshire’s stake in Suncor up to 30,000,000 shares.

Suncor Energy is an integrated energy company based out of Canada.

Whereas Phillips66 isn’t a play on oil, Suncor is. Specifically Canadian oil sands.

Suncor has advantages in that it doesn’t need to worry about costly deepwater exploration as much as global supermajors due to its focus on sands. So that limits capital expenditures as a percentage of operating cash flow. As such, their free cash flow is in positive territory right now, which is something some other oil companies are having a problem with.

However, oil sands produce oil that’s heavier and usually worth less on the open market. In addition, there are transportation costs to be concerned about. But Suncor does maintain competitive margins.

Their results over the last decade have oscillated somewhat wildly, which isn’t uncommon for companies in this industry. But the fundamentals remain, overall, pretty similar to what a lot of other large companies in the oil & gas space generate. In addition, the stock provides a juicy 3.04% yield. And Suncor has increased its dividend nine consecutive years now.

Twenty-First Century Fox Inc. (FOXA) – Purchased 2,723,772 shares.

foxaBerkshire now owns 8,951,869 shares in FOXA.

Twenty-First Century Fox Inc. is a global diversified entertainment and media companies with operations in cable network programming, television, and filmed entertainment.

Well, another media play. After tracking Buffett and Berkshire for many quarters now, the plays on media have come up over and over again. So if you’re looking to invest like Buffett/Berkshire, it would seem like going after media companies would be an apt choice.

Twenty-First Century Fox is especially attractive thanks to its broad diversification. They own one of the country’s four major broadcast television channels, animation assets, one of the oldest and largest motion picture distribution businesses, and cable assets.

So while content might change in terms of how people access and consume it, content is likely to be just as, if not more, popular in the future. And major companies like Fox continue to produce content at prodigious rates.

The stock is down more than 20% YTD, with a notable drop during Q3. And that just so happens to be when Berkshire significantly added to its stake. Chance? I think not.

Meanwhile, the company is operating at a high level. Revenue is roughly flat over the last decade, but the company’s earnings per share has compounded at a 19.9% rate over the last ten fiscal years. In addition, margins, return on equity, and return on invested capital are all elevated to very impressive levels and sitting quite a bit higher than they were a decade ago.

Liberty Global LiLAC-A (LILA) – Purchased 517,139 shares.

lilaThis is a new position for Berkshire’s common stock portfolio.

Liberty Global LiLAC-A represents the Latin American and Caribbean assets of Liberty Global PLC (LBTYA).

Although this is technically a new position for Berkshire, it’s only because these shares were spun off from the larger entity Liberty Global on July 2, 2015.

So this is basically a tracking stock for Liberty Global’s assets in Latin America and the Caribbean. Primarily, LiLAC comprises Liberty’s Cablevision subsidiary in Puerto Rico and their VTR assets in Chile.

However, this is a unique structure that still allows the larger Liberty Global to share everything it offers with the smaller company, but it gives investors the opportunity to pursue certain geographical opportunities.

This is a very new spin-off, so it remains to be seen how it turns out. Moreover, it remains to be seen if Berkshire decides to keep the shares over the long run. But it’s a very small position (relative to Berkshire), worth just under $20 million.

lilak

Liberty Global LiLAC-C (LILAK) – Purchased 267,348 shares.

This is another new position for Berkshire.

Liberty Global LiLAC-C represents the Latin American and Caribbean assets of Liberty Global PLC (LBTYK).

This works the same way as the LILA shares, except these shares were spun off from the Class C shares and represent the same. Liberty Global’s Class A shares represent one vote per share. The Class C shares offer no voting power.

So you’re looking at another spin-off. Again, it will be interesting to see if Berkshire keeps its stake here. Regardless, this position is also small – it’s currently worth just over $10 million.

Sales

Bank of New York Mellon Corp. (BK) – Sold 568,208 shares.

bkThis sale reduces Berkshire’s stake in this company down to 20,112,212 shares.

Bank of New York Mellon Corp. is a global financial services company, providing investment management and investment services.

For as long as I’ve been regularly tracking Berkshire’s quarterly updates, they’ve been fairly consistently reducing their stake in Bank of New York Mellon.

This goes against Buffett’s more general love of banks, but I think that’s because of specific things the firm sees with this particular bank.

For instance, EPS has basically gone nowhere over the last decade. That’s not because net income hasn’t improved but because the outstanding share count is up so significantly over that period.

In addition, it’s quite possible that the methodical selling off of their stake in this bank is due to better opportunities elsewhere or the need for capital.

Chicago Bridge & Iron Company N.V. (CBI) – Sold 7,343,731 shares.

cbiBerkshire now owns 1,983,190 shares of CBI after this sale.

Chicago Bridge & Iron Company N.V. is an energy infrastructure company, providing design, engineering, and construction services to clients in the energy, petrochemical, and natural resource companies.

This is the second quarter in a row in which Berkshire sold off shares in this company, but this was a much larger transaction than what we saw last quarter. This sale almost completely eliminated the position, but Berkshire still owns a little less than $90 million worth of Chicago Bridge & Iron.

As I noted last quarter, it’s kind of an interesting situation with Berkshire selling here. Berkshire was buying CBI back in 2014 when the stock was priced much higher. So this is a situation where it appears that Berkshire started to build a position in a company at a higher price only to start to sell out quickly thereafter at lower prices. Obviously, not what Berkshire is known for.

It’s also interesting because Chicago Bridge & Iron’s fundamentals across the board are pretty impressive.

Both revenue and EPS have compounded at an annual rate over 20% over the last decade. And every other basic fundamental metric is really solid.

However, recent results have been tough because of the firm’s exposure to the energy industry, which itself has been hit hard by falling oil prices.

So this could perhaps just be a situation where Berkshire is further reducing its exposure to the energy industry, which is a story that’s been playing out for more than a year now.

Deere & Company (DE) – Sold 257,980 shares.

deThis transaction reduces Berkshire’s stake in DE down to 17,052,110 shares.

Deere & Company manufactures machinery used in agricultural, construction, and forestry applications.

This is another interesting sale. Berkshire has acquired a fairly sizable stake in Deere, currently valued at more than $1.2 billion.

But this was a small transaction. Thus, it seems likely that either Berkshire is raising capital or it was just a valuation call. Deere was trading near $100 per share for a good chunk of Q3, and it now sits at just under $75 per share. And Berkshire acquired a significant percentage of its stake in Deere in the fourth quarter of 2014, when the stock was largely trading in the low $80s.

Nonetheless, Deere is well positioned for long-term tailwinds in agriculture. As our global population grows and as our geography changes worldwide, humanity will have to do more with less when it comes to farming. As such, Deere’s positioning as a leader in mechanized farming equipment bodes well.

I remain a very happy shareholder here, and the stock continues to pay out a healthy dividend (it yields 3.21%). I suspect Buffett is a happy shareholder as well seeing as how this was a relatively small sale.

DIRECTV (DTV) – Sold 31,353,468 shares.

This represents all of Berkshire’s stock in DIRECTV, meaning they are completely sold out of this position.

DIRECTV provides digital television entertainment in the US and Latin America.

gs

This transaction is obviously special because AT&T acquired DIRECTV and all of its stock. So this isn’t a situation where Berkshire specifically sold its shares. Rather, their shares were purchased by AT&T as part of an acquisition, and DTV no longer trades on any exchange.

Goldman Sachs Group Inc. (GS) – Sold 1,672,012 shares.

This sale means Berkshire now owns 10,959,519 shares of GS.

Goldman Sachs Group Inc. is a holding company that, through its subsidiaries, operates as a global investment and banking business that provides a range of financial services to its clients.

Buffett has already noted that its sale of stock in Goldman Sachs has nothing to do with valuation or his feelings about the company. Rather, it was simply a matter of raising capital for the outright purchase of Precision Castparts Corp. (PCP).

Media General Inc. (MEG) – Sold 1,174,911 shares.

megBerkshire reduced its stake in MEG down to 3,471,309 shares.

Media General Inc. is a media company that primarily owns a number of smaller television stations in diversified markets around the US.

Berkshire acquired its stock in MEG through penny warrants that were issued after Buffett announced that he was going to buy most of Media General’s newspaper assets back in 2012.

One can argue either way in terms of the attractiveness of the local newspaper industry, but there’s no doubt that the penny warrants have served to be quite profitable.

That said, Media General has had a tough time turning a profit over the last decade. It was noted at the time of the aforementioned transaction that it was either bankruptcy or the sale of the newspaper division.

But I’m not sure a retail investor would be too interested in MEG here. A declining revenue base, a lack of profit, and a significant debt load are all red flags for me.

If I had access to penny warrants, that would be one thing. But at almost $46 per share, I’ll pass. I imagine Berkshire will steadily reduce its stake in MEG over time.

Viacom, Inc. (VIAB) – Sold 5,646,721 shares.

viabThis sale was a complete elimination of Berkshire’s stake in Viacom.

Viacom Inc. is a global entertainment content company, with audiences in 165 countries and territories.

This is surprising for me because, as noted multiple times now, Berkshire has been very active when it comes to picking up equity in media companies, including those involved in content production and distribution.

Well, Viacom is one of the largest content producers in the world, with major cable channel assets like Nickelodeon and MTV. In addition, they own more than 1,000 media websites designed to cross-promote and reach new audiences. And, of course, they also own the vaunted Paramount brand, which is America’s oldest motion picture production and distribution company.

But I think the secular changes in content consumption is a headwind. It remains to be seen how much that will really impact behemoths like Viacom, and recent results have remained strong.

Moreover, the stock appears cheap, which is what perplexes me a bit more here. It was actually just last week’s undervalued dividend growth stock of the week. The timing just appears off since the stock is down more than 30% YTD, with much of the drop occurring during Q3. Now, that drop occurred across a lot of major media companies due to concerns over cord-cutting, so perhaps Berkshire agrees with that sentiment.

WABCO Holdings Inc. (WBC) – Sold 218,006 shares.

wbcThis transaction reduced Berkshire’s stake in WABCO down to 3,559,189 shares.

WABCO Holdings Inc. and its subsidiaries is engaged in the manufacture, marketing, and sale of electronic, mechanical, and mechatronic products for the commercial truck, trailer, bus, and passenger car manufacturers.

Berkshire has been slowly selling off shares in WABCO all year long now. Most transactions are seemingly small, which is probably prudent due to the fact that WABCO is a small company – its market cap is just over $6 billion.

The size of this position is now down to below $400 million, and recent action indicates they’re slowly selling out.

WABCO’s fundamentals are pretty solid, though. EPS has more than doubled over the last decade, and revenue is up significantly. Everything else looks really solid. Very little debt, high margins, and great returns on equity and invested capital.

However, this could be a valuation call. The stock is trading hands for a P/E ratio near 26, which is significantly above its five-year average P/E ratio of 18.5. Moreover, every other valuation metric is well above its recent historical norm.

Wal-Mart Stores, Inc. (WMT) – Sold 4,200,000 shares.

wmtBerkshire now owns 56,185,293 shares of WMT valued at just over $3.25 billion.

Wal-Mart Stores, Inc. operates retail stores in various sizes and formats across the globe. They are the largest retailer in the world.

Buffett noted that, like the GS sale, this was to raise capital for the purchase of Precision Castparts. So I’m not sure we can really read into it much further than that.

Notably, the stock appears to be very cheap here with a P/E ratio of 12.10 and a yield of 3.4%. The former is a recent historical low while the latter is a recent historical high. There are definitely some headwinds in the industry, but WMT is priced for very low expectations here.

— Jason Fieber, Dividend Mantra

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