The third quarter was relatively quiet for Warren Buffett and Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) in terms of the company’s stock portfolio.
Other than the well-publicized Bank of America investment, which wasn’t really a “new investment” at all, Berkshire didn’t report any new stock positions during the third quarter.
However, there was still some buying and selling that took place.
During the quarter, Buffett and his team added to three of its investments and reduced three others.
Here’s a rundown of Buffett’s latest moves.
Three stocks Buffett bought
During the quarter, Berkshire added to three of the stock positions in the company’s portfolio:
- Adding to one of its largest positions, Berkshire bought another 3.9 million shares of Apple (AAPL), bringing the company’s total stake to 134.1 million shares, which represents a 2.6% stake in the tech giant. Buffett and company have been accumulating Apple shares over the past two years or so and are sitting on a nice gain, especially with the stock recently reaching a new record high.
- Synchrony Financial (SYF) was one of Berkshire’s most recent stock investments, with the position initiated during the second quarter. In the third quarter, Berkshire purchased another 3.3 million shares of the credit card issuer.
- Berkshire also bought another 832,000 shares of Monsanto (MON), which increases that stake by about 10%. It’s worth mentioning that the latter two positions are relatively small portions of Berkshire’s portfolio. Even after the increase, the Monsanto and Synchrony stakes are worth $1.1 billion and $646 million, respectively. For comparison, the company’s Apple investment is worth nearly $21 billion.
Three stocks Buffett sold
During the third quarter, Berkshire also reduced the sizes of some of its investments.
- Most notably, the IBM (IBM) stake that Buffett had already pared down in recent quarters continued to be sold off. Berkshire disposed of another 17.1 million shares of IBM during the quarter. IBM was formerly one of Berkshire’s largest stock investments. Now, it’s barely in the top 10.
- Another notable sale is the significant reduction of Berkshire’s Wells Fargo (WFC). In the wake of the infamous “fake accounts” scandal, Buffett defended the bank and called it an “incredible institution.” Now it appears that he isn’t quite as optimistic about the bank’s future, or at least feels that his capital could be put to better use elsewhere. However, Berkshire’s stake in Wells Fargo remains company’s largest stock investment.
- Also, Buffett sold a portion of the company’s stake in Charter Communications (CHTR). Berkshire now owns 2.8% of the cable giant.
This explains why Berkshire’s cash hoard increased by $9.5 billion
As of the end of the third quarter, Berkshire Hathaway was sitting on more than $109 billion in cash, which was $9.5 billion more than it had just three months prior.
The company’s recent stock market activity helps to explain why. While it’s unclear the price at which Berkshire bought and sold all of these stocks, it undoubtedly sold more stock on a dollar-value basis than it purchases, by about $2 billion based on the stocks’ average prices during the third quarter, mainly because of the massive IBM sale.
This cash, combined with the cash generated from Berkshire’s other businesses and the company’s lack of any completed acquisitions during the quarter, explains why Berkshire is now sitting on the first $100 billion-plus cash stockpile in the company’s history.
— Matthew Frankel
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Source: The Motley Fool