The Berkshire Hathaway (BRK.B) portfolio, most of which was selected by Chairman and CEO Warren Buffett, brings to mind ubiquitous blue-chip stocks such as American Express (AXP), Coca-Cola (KO) and, more recently, Apple (AAPL).
But a deep dive into Berkshire Hathaway's equity holdings reveals a more complicated picture.
Berkshire Hathaway held positions in 48 separate stocks as of Sept. 30, according to the most recent regulatory filing (Nov. 14) with the Securities and Exchange Commission - up from 47 during the second quarter of this year. But the portfolio of "Buffett stocks" isn't as diversified as the number might suggest. In some cases, BRK.B holds more than one share class in the same company. Also, some holdings are immaterial leftovers from earlier bets that the Oracle of Omaha has mostly exited, just not completely.
In fact, Berkshire Hathaway's equity portfolio is actually pretty concentrated. The top six holdings account for almost 70% of the portfolio's total value. The top 10 positions comprise a little more than 80%. Banks and airlines, to cite a couple of industries, carry quite a load in this portfolio. Then there's the fact that several Buffett stocks were picked by portfolio managers Todd Combs and Ted Weschler.
Here, we examine each and every holding to give investors a better understanding of the entire Berkshire Hathaway portfolio.
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United Parcel Service
Shares held: 59,400
Holding value: $7,117,000
Percent of portfolio: 0.003%
United Parcel Service (UPS, $124.08) might be the world's biggest package delivery company, but it's the least material stock in Berkshire Hathaway's portfolio. With fewer than 60,000 shares, this is the most meager of Buffett stocks - a rump position, leftovers, an odd lot.
Buffett made the plunge into UPS during the first quarter of 2006, when he picked up 1.43 million shares worth about $113.5 million. That comes to an average price per share of $79.38.
But UPS never grew to be a major part of Berkshire's portfolio, and Buffett has pared the position over the years to where it wouldn't be a surprise if he exited the stake at any time. (Berkshire quietly dropped another small holding - telecom giant Verizon (VZ) - in the first quarter of 2019 when he dumped his last 928 shares.)
Buffett occasionally can be fairly chatty about some of his more notable stock picks, but he typically doesn't comment on BRK.B's buys and sells. There's no mention of United Parcel Service in CNBC's indispensable Warren Buffett archive. But one clue as to why UPS never became a bigger part of Berkshire Hathaway's holdings might be the fact that since March 31, 2006, it has delivered a total return of 131%. But Standard & Poor's 500-stock index generated a total return of 214% in that same time frame.
Translation: UPS has been a bust for BRK.B.
Shares held: 578,000
Holding value: $31,975,000
Percent of portfolio: 0.01%
Berkshire Hathaway's Mondelez (MDLZ, $52.90) holding stems from Buffett's 2007 investment in what was then known as Kraft Foods. The packaged food company changed its name to Mondelez in 2012 after spinning off its North American grocery business, which was called Kraft Foods Group and traded under the ticker KRFT. Kraft Foods Group them merged with H.J. Heinz, in a 2015 deal backed by Buffett, to form Kraft Heinz (KHC).
As we'll see shortly, Berkshire Hathaway maintains a significant stake in KHC. Mondelez, not so much.
Buffett has never seemed all that enamored with Mondelez, whose brands include Oreo cookies and Triscuit crackers, shooting down speculation in 2017 that Kraft Heinz would buy the global snacks giant. MDLZ's underperformance vs. the S&P 500 since the spinoff probably hasn't improved Buffett's stance on the company, either.
Berkshire Hathaway isn't even among Mondelez's top 100 shareholders, at just 0.04% of MDLZ shares outstanding, according to data from S&P Global Market Intelligence. And Mondelez accounts for just one one-hundredth of a percent of the total value of Berkshire Hathaway's equity portfolio.
Nothing to see here, folks.
Procter & Gamble
Shares held: 315,400
Holding value: $39,229,000
Percent of portfolio: 0.02%
Procter & Gamble (PG, $120.50), the consumer products giant and component of the Dow Jones Industrial Average, is another blue-chip stock that has fallen by the wayside as a Berkshire Hathaway investment.
Buffett came to own P&G - maker of Tide detergent, Crest toothpaste and Pampers diapers - via the holding company's 2005 acquisition of razor-maker Gillette. At the time, Buffett, a major Gillette shareholder, called the tie-up a "dream deal." Procter & Gamble became one of BRK.B's biggest equity positions.
That dream didn't last very long. The Great Recession eroded the pricing power of old-line consumer staples companies such as P&G. The company embarked on a plan to shed 100 underperforming brands. The Duracell battery business happened to be on the list, and Berkshire bought it in 2014 in exchange for PG stock. Two years later, Buffett pared what was left of the P&G stake by 99%.
This "Buffett stock" is almost phased out. Don't be surprised if Buffett dumps the remainder any time now.
Johnson & Johnson
Shares held: 327,100
Holding value: $46,343,000
Percent of portfolio: 0.02%
Johnson & Johnson (JNJ, $130.96), like P&G, is another defensive Dow stock that has fallen out of favor with Buffett. (Kraft Foods, incidentally, also was a Dow stock for a time, from 2008 to 2012.) BRK.B's interest peaked more than a decade ago. Now, the diversified health-care giant represents nothing more than a token holding.
You can blame management missteps. J&J struggled with manufacturing problems and allegations of illegal marketing practices in 2010 and 2011. Buffett was critical of the company for those gaffes, as well as for using too much of its own stock in its 2011 acquisition of device-maker Synthes. Disenchanted with Johnson & Johnson, Buffett dumped most of Berkshire's stake in 2012.
Berkshire's position in JNJ topped out at 64.3 million shares in 2007. Today, the holding company's equity stake comes to just 327,100 shares (about $46 million), which represents roughly 0.01% of shares outstanding. Johnson & Johnson could disappear from the ranks of the Buffett stocks very soon.
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Liberty Latin America
Shares held (Class A / Class C): 2,714,854 / 1,284,020
Holding value (Class A / Class C): $46,343,000 / $21,950,000
Percent of portfolio (Total): 0.03%
Liberty Latin America Class A (LILA, $18.47) and Liberty Latin America Class C (LILAK, $18.30) shares are just the first of several examples of BRK.B essentially betting on legendary pay-TV mogul John Malone.
Liberty Latin America provides cable, broadband, telephone and wireless services in Chile, Puerto Rico, the Caribbean and other parts of Latin America. Liberty Global (LBTYA), the multinational telecommunications company in which Berkshire also holds a stake, issued tracking stock of its Latin American operations in 2015, then spun off those operations entirely in 2018.
As we'll see below, Berkshire has several other investments in Malone-backed enterprises. Malone, a pioneer in the telecom industry and a multibillionaire himself, has created outsize value for shareholders over his long career.
Whether the various investments are Buffett's ideas of those of his portfolio managers, the appeal is plain to understand: Game knows game.
Shares held: 1,207,844
Holding value: $206,336,000
Percent of portfolio: 0.10%
Warren Buffett, who already is positioned in home furnishings retail via its Nebraska Furniture Mart subsidiary, added more exposure to the space with his third-quarter entry into RH (RH, $175.22).
RH, formerly known as Restoration Hardware, operates more than 100 retail and outlet stores across the U.S. and Canada. While brick-and-mortar retailers have struggled mightily over the past few years thanks in part to the rise of e-commerce, RH has found success catering to the upper crust. Indeed, RH is growing at a nice clip. Management is accelerating its expansion plans to five to seven new stores a year, up from three to five new galleries annually.
Buffett typically doesn't comment on Berkshire Hathaway's holdings, and that's true for RH, so it's not certain exactly what attracted the Oracle of Omaha. Given the position's tiny size, it is possible this was a move made by Buffett lieutenant Ted Weschler or Todd Combs.
But the stake does fit broadly with Buffett's worldview. Buffett stocks tend to be bets on America's growth, which is exactly what a bet on housing and housing-related industries is.
Shares held: 43,249,295
Holding value: $297,555,000
Percent of portfolio: 0.14%
When Berkshire Hathaway revealed it took a stake in Teva Pharmaceutical (TEVA, $9.37) in the fourth quarter of 2017, it looked like a classic Warren Buffett value move.
The Israel-based drug manufacturer was out of favor - to put it mildly. A bloated balance sheet, mass layoffs and the looming expiration of drug patents had short sellers licking their chops.
By the time Buffett stepped in, Teva shares were off about 70% from their mid-2015 peak. Berkshire then doubled his stake in Teva during the first quarter of 2018, when shares looked really cheap.
They look even cheaper now. Teva, which has lost more than half of its value since the start of Q2 2018, trades at just four times analysts' estimates for future earnings - a fraction of the S&P 500's forward P/E. Meanwhile, BRK.B owns 4.3% of Teva's shares outstanding.
Shares held: 7,467,508
Holding value: $332,079,000
Percent of portfolio: 0.15%
Warren Buffett's Q3 addition of Occidental Petroleum (OXY, $37.76) was actually his second deal this year to acquire equity in the integrated oil-and-gas company.
Buffett invested $10 billion in Occidental in late April 2019 to help finance a $38 billion bid for exploration-and-production firm Anadarko Petroleum. In return, Berkshire received 100,000 preferred shares yielding 8%. The bid beat out a competing offer from Chevron (CVX) but irked fellow octogenarian billionaire Carl Icahn, who owns a 5% stake in OXY. He called the deal "hugely overpriced" and still is fighting to scuttle the deal.
However, Buffett has become even further entrenched by sinking more than $330 million into OXY common shares, which could make Icahn's fight even more difficult.
Still, the stake is a meager portion of the Berkshire Hathaway portfolio, which is notably light on energy overall. Buffett's avoidance of the sector might have stemmed from the great oil price crash of 2014. Crude prices have stabilized in recent years, however, so perhaps that is what rekindled the Oracle of Omaha's interest.
Shares held: 10,758,000
Holding value: $339,738,000
Percent of portfolio: 0.16%
Warren Buffett made a move in the energy sector by initiating a position in Suncor Energy (SU, $32.08) during the fourth quarter of 2018. And it's a rarity among Buffett stocks, as it's not U.S.-based.
If this bet on Canada's biggest oil-and-gas company sounds familiar, it should: This is the second time Berkshire Hathaway has taken a stab at Suncor. The company originally invested in the energy giant in 2013, then sold the entirety of the position three years later. Suncor - an integrated energy giant whose operations span oil sands developments, offshore oil production, biofuels and even wind energy - also sells its refined fuel via a network of more than 1,500 Petro-Canada stations.
Berkshire's stake amounts to just 0.16% of Suncor's shares outstanding, according to data from S&P Global Market Intelligence. The holding company is light on energy overall, too; its three combined positions in energy stocks account for less than 1% of the Berkshire Hathaway portfolio.
Suncor also is a member of the Canadian Dividend Aristocrats by virtue of having raised its annual dividend payouts for 17 consecutive years.
Shares held: 14,166,748
Holding value: $492,719,000
Percent of portfolio: 0.23%
Berkshire Hathaway announced in October 2018 that it would take a stake in StoneCo (STNE, $36.95) as the Brazilian financial technology company went public. Given the relatively small position in STNE, and the fact that it's a fintech company, you won't be surprised to learn the position was initiated by Buffett lieutenant Todd Combs - with the Oracle of Omaha's blessing, no doubt.
StoneCo, which provides software and hardware for companies to facilitate credit- and debit-card payments, is one of the "growthiest" Warren Buffett stocks without a doubt. It recently reported third-quarter revenues that more than doubled year-over-year to 414.1 million Brazilian reals, or $98.8 million. Adjusted net income exploded from just 5.7 million reals a year ago to 89.3 million reals, or $21.3 million.
StoneCo fits well with Berkshire Hathaway's general bullishness on companies that facilitate and process payments. "Payments are a huge deal worldwide," Warren Buffett said at Berkshire's 2018 shareholder meeting.
Berkshire holds 5.1% of the company's shares outstanding, making it StoneCo's fifth-largest shareholder.
Shares held: 5,182,637
Holding value: $530,702,000
Percent of portfolio: 0.25%
Phillips 66 (PSX, $119.44) is the third of Berkshire Hathaway's three energy-sector investments. Buffett first bought shares in the oil-and-gas company in 2012. But despite having heaped praise on PSX in the past, Buffett has dramatically reduced his stake over the past year-plus.
In the first quarter of 2018, he sold a whopping 35 million shares, reducing BRK.B's stake by more than 40%. However, that move was simply made to avoid regulatory headaches. Indeed, the purchaser of the shares was none other than PSX.
As Buffett said at the time: "Phillips 66 is a great company with a diversified downstream portfolio and a strong management team. This transaction was solely motivated by our desire to eliminate the regulatory requirements that come with ownership levels above 10%."
The thing is, Buffett continues to burn off Berkshire Hathaway's PSX holdings. Even after the big sale back to PSX in the Q1 2018, BRK.B remained the company's largest shareholder with 9.8% of all shares outstanding. But Buffett kept selling. In the first quarter of 2019 alone, he pared Berkshire's stake by another 53%. It cut back in Q2 and Q3, too. Indeed, Berkshire has fallen outside of Phillips 66's top 10 shareholders, owning less than 1.2% of PSX shares outstanding. Buffett has been characteristically mum on his reasons for the sales.
Restaurant Brands International
Shares held: 8,438,225
Holding value: $600,295,000
Percent of portfolio: 0.28%
Investors may be forgiven if they're unfamiliar with Restaurant Brands International (QSR, $67.29). After all, it's a pretty bland name.
But they surely know Canadian company's fast-food brands.
QSR was formed by the 2014 merger of Burger King and Tim Hortons. Three years later, the company acquired Popeyes Louisiana Kitchen, making it the world's fifth-largest operator of fast food restaurants.
So where does Warren Buffett come in? Berkshire Hathaway helped fund Burger King's acquisition of Tim Hortons by purchasing a combination of preferred shares and warrants. In a classic Buffett move, he was able to finagle a 9% yield from the preferred shares. QSR redeemed the preferreds in 2017, adding to Berkshire's cash pile.
BRK.B still owns 3.3% of the fast-food company's shares outstanding, making it QSR's ninth-largest investor.
Shares held: 6,353,727
Holding value: $608,433,000
Percent of portfolio: 0.28%
Globe Life (GL, $100.14) - known as Torchmark up until just a few months ago - is a small holding for Berkshire Hathaway, but a natural Buffett stock. After all, it's a life and health insurance company, and various wholly owned insurance firms form the core of BRK.B's holdings.
Berkshire Hathaway has owned shares in Globe Life/Torchmark since early 2001. And while it's a boring company, it has quietly been a very good stock pick. Including dividends, GL has generated an annualized return of nearly 11% since March 30, 2001.
BRK.B owns 5.8% of Globe Life's shares outstanding, which makes it the firm's third-largest shareholder after Vanguard and BlackRock (BLK).
Shares held (Class A / Class C): 19,791,000 / 7,346,968
Holding value (Class A / Class C): $489,827,000 / $174,784,000
Percent of portfolio (Total): 0.31%
As noted above with Liberty Latin America, Liberty Global Class A (LBTYA, $22.77) and Liberty Global Class C (LBTYK, $21.82) are part of a spectrum of Berkshire Hathaway holdings in communications and media companies whipped up by billionaire dealmaker John Malone.
Liberty Global bills itself as the world's largest international TV and broadband company, with operations in seven European countries. Berkshire's investment in the Class A shares dates to the fourth quarter of 2013. It picked up the Class C shares, which have no voting power, in the first quarter of 2014.
Between the Class A and Class C shares, Berkshire Hathaway owns a 3.7% stake in Liberty Global, according to data from S&P Global Market Intelligence. The holding company is Liberty's fifth-largest shareholder.
Shares held: 18,621,674
Holding value: $696,637,000
Percent of portfolio: 0.32%
When Buffett revealed Berkshire's position in Store Capital (STOR, $39.97) in the summer of 2017, a few investors took note. Prior to Store, real estate investment trusts (REITs) - a way to invest in real estate without owning the actual assets - were never big among Buffett stocks.
In Store's case, it invests in single-tenant properties including chain restaurants, supermarkets, drugstores and other retail, service and distribution facilities. That is to say, Store is a bet on brick-and-mortar retail, which is thought to be in permanent decline.
Buffett, however, spied value - and he spied it for quite some time. Store Capital CEO Christopher Volk told CNBC that Buffett studied the REIT for three years before taking his position. He's surely glad he finally made the plunge, as the stock has nearly doubled on a total-return basis (price gains plus dividends) since the end of 2017's second quarter.
Berkshire Hathaway owns 18.6 million shares, which yielded 3.5% as of Nov. 14. With a stake of 8.2%, it is Store Capital's second-largest shareholder after Vanguard.
SEE ALSO: The 13 Best REITs to Buy in 2019
Shares held: 20,803,000
Holding value: $709,175,000
Percent of portfolio: 0.33%
Synchrony Financial (SYF, $36.73) jibes with Buffett's affection for credit-card companies and banks. Synchrony, a major issuer of charge cards for retailers, was spun off of GE Capital in 2014. It's both a lender and a payments processor - like Buffett's beloved American Express (AXP) - but it caters to customers who skew more toward the middle and lower end of the income scale.
Berkshire initiated a position in SYF during the second quarter of 2017, paying an estimated price per share of $30.02. Since the end of Q2 2017, the stock has delivered a total return of 11.9%.
BRK.B owns 3.1% of Synchrony Financial's shares outstanding, which makes it the firm's seventh-largest shareholder.
Axalta Coating Systems
Shares held: 24,264,000
Holding value: $731,560,000
Percent of portfolio: 0.34%
Axalta Coating Systems (AXTA, $29.29), which makes industrial coatings and paints for building facades, pipelines and cars, is the belle of the ball when it comes to mergers and acquisitions suitors. The company has rejected more than one buyout bid in the past, and analysts note that it's a perfect target for numerous global coatings companies.
Axalta joined the ranks of the Buffett stocks in 2015, when Berkshire Hathaway purchased 20 million shares in AXTA from private equity firm Carlyle Group (CG). The stake makes sense given that Buffett is a long-time fan of the paint industry; Berkshire Hathaway bought house-paint maker Benjamin Moore in 2000.
Berkshire is Axalta's largest investor, holding 10.4% of the shares outstanding.
Shares held: 5,382,040
Holding value: $850,202,000
Percent of portfolio: 0.40%
As we shall see, Warren Buffett has been initiating positions in several bank stocks over the past few quarters, but he's been a fan of M&T Bank (MTB, $163.11) for a very long time. Indeed, MTB has been a member in good standing of Berkshire Hathaway's equity portfolio since 2001.
The regional bank operates more than 750 branches in eight states, including New York, Maryland and New Jersey, as well as Washington, D.C., and it has been profitable year after year for decades. It also has been a reliable dividend payer. Buffett has a soft spot for well-run, unassuming businesses. And he frequently cites the importance of management talent when it comes to deciding where to invest. He certainly was a fan of M&T Bank's late CEO.
In 2011, Buffett recommended that Berkshire Hathaway shareholders read M&T's annual reports, which were written by Robert Williams, chairman and CEO from 1983 until his death in 2017. "Bob is a very smart guy and he has a lot of good observations," Buffett said.
Although M&T Bank represents a small portion of Berkshire Hathaway's equity portfolio, BRK.B is a big holder of MTB. With 4.0% of shares outstanding, Berkshire is the bank's seventh-largest shareholder.
Shares held: 136,275,729
Holding value: $852,404,000
Percent of portfolio: 0.40%
Sirius XM (SIRI, $6.98) - a company that reaches more than 100 million listeners via its core satellite radio business and Pandora, which it acquired in 2018 - is another stock pick related to John Malone. Malone is chairman of Liberty Media, which owns a massive stake in Sirius XM.
As Kiplinger has noted, it's possible that all of Berkshire's investments in companies that are somehow tied to Malone's truly Byzantine corporate structure could very well be the responsibility of one of Buffett's portfolio managers. Liberty Media was a large position held by Ted Weschler's Peninsula Capital in his pre-Berkshire days.
Berkshire first bought shares in SIRI during the final quarter of 2016. Berkshire unloaded a small portion (1%) of its Sirius XM position during the third quarter. Still, its 3.1% stake makes it the company's second-largest shareholder after Liberty Media, which owns 71% of the shares outstanding.
Shares held: 5,958,391
Holding value: $885,953,000
Percent of portfolio: 0.41%
Few Buffett stocks are such natural fits as Travelers (TRV, $133.95), the blue-chip insurance giant. Insurance, after all, is the holding company's core business. In addition to TRV, Berkshire Hathaway has a stake in the aforementioned Globe Life and counts numerous insurer companies as wholly owned subsidiaries. Geico, General Re and United States Liability Insurance Group are just three companies BRK.B owns as part of its sprawling insurance empire.
And Travelers, a component of the Dow Jones Industrial Average with a modest dividend yield of 2.5%, has the kind of pedigree and income stream Buffett favors.
Berkshire Hathaway first took a position in Travelers in the third quarter of 2018, then boosted its stake by 68% in the fourth quarter. BRK.B now holds almost 6 million shares in TRV.
At less than $1 billion, the stake is relatively small beer for Berkshire Hathaway, but it's a big deal to Travelers. Buffett's holding company is Travelers' seventh-largest shareholder, owning 2.3% of all shares outstanding.
Shares held: 537,300
Holding value: $932,705,000
Percent of portfolio: 0.43%
Amazon.com (AMZN, $1,754.60) is one of Berkshire Hathaway's splashiest new stock picks. The holding company disclosed that it initiated a position of 483,300 shares during the first quarter of 2019, then added another 54,000 shares in Q2.
It wasn't Buffett's idea, though.
The clue? Before Berkshire Hathaway submitted its first-quarter regulatory filing with the Securities and Exchange Commission, Buffett told CNBC: "One of the fellows in the office that manage money ... bought some Amazon, so it will show up (when that file is submitted)."
Buffett has long been an admirer of Amazon CEO Jeff Bezos, he admitted in an interview, and said he wished he'd bought the stock sooner.
"Yeah, I've been a fan, and I've been an idiot for not buying" AMZN shares, Buffett told CNBC. Berkshire still is an insignificant shareholder, however, boasting about 0.1% of Amazon's shares outstanding.
Shares held: 43,700,000
Holding value: $1,178,589,000
Percent of portfolio: 0.55%
Warren Buffett isn't afraid to change his mind, and perhaps his most surprising volte-face came in regard to the airline industry. Buffett long excoriated the sector, calling it a "death trap" for investors.
"If a capitalist had been present at Kitty Hawk back in the early 1900s he should've shot Orville Wright; he would have saved his progeny money," Buffett once wrote.
But airline stocks became Buffett stocks in 2016. That's when he started picking up stakes in four major carriers, including American Airlines (AAL, $28.77). Years of industry consolidation and Buffett's confidence in the U.S. economy's long-term dynamism finally made the time ripe for Berkshire Hathaway to buy.
"It's true that the airlines had a bad 20th century. They're like the Chicago Cubs. And they got that bad century out of the way, I hope," he told CNBC.
Berkshire Hathaway initiated a stake in AAL during 2016's third quarter. Buffett has been an incremental seller ever since to remain below the 10% ownership threshold that would trigger regulatory headaches. Berkshire Hathaway holds 9.8% of the firm's shares outstanding, making it American's second-largest shareholder, behind only Primecap Management.
PNC Financial Services
Shares held: 8,671,054
Holding value: $1,215,335,000
Percent of portfolio: 0.56%
PNC Financial Services (PNC, $149.02), the nation's sixth-largest bank by assets and second-largest regional lender, is part of a big recent bet by Buffett on the financial sector.
Buffett first started investing in PNC during the third quarter of 2018. He upped Berkshire Hathaway's stake by another 4% in Q1 2019. The holding company is now PNC's 10th-largest investor with 1.9% of the bank's shares outstanding.
Buffett has long been comfortable with investing in the banking business. At the 1995 Berkshire Hathaway annual meeting, he said the industry "falls within our circle of competence to evaluate." Given Berkshire's big push into banks over the past few quarters - BRK.B has added to or started new positions in more than a half-dozen financial stocks recently - Buffett clearly sees a lot of value in this corner of the market.
Shares held: 4,333,363
Holding value: $1,248,485,000
Percent of portfolio: 0.58%
Costco (COST, $304.59) joined the ranks of the Buffett stocks a long time back - the first quarter of 2001, to be precise. So while Costco is not a particularly large holding, at just more than half a percent of the Berkshire Hathaway portfolio, it's a seemingly cherished one.
And it's a company Buffett is happy to chat about at length.
"Here (Kraft Heinz) are, 100 years plus, tons of advertising, built into people's habits and everything else," Buffett told CNBC in a February 2019 interview. "And now, Kirkland, a private label brand, comes along and with only 250 or so outlets, does 50% more business than all the Kraft Heinz brands."
Indeed, Costco's Kirkland store-branded products are one of the warehouse retailer's biggest draws. Revenues from the Kirkland label totaled $39 billion last year - more than 27% of Costco's overall annual sales, and about 50% greater than Kraft Heinz's total sales across 2018.
Berkshire's 4.3 million shares represent a roughly 1% equity stake in the company - not unsubstantial, but well outside Costco's top 10 institutional stakes.
Shares held: 4,934,756
Holding value: $1,340,132,000
Percent of portfolio: 0.62%
Warren Buffett credits Berkshire Hathaway's investment in Mastercard (MA, $279.63) to his portfolio managers Todd Combs and Ted Weschler, and he wishes he had pulled the trigger on the opportunity earlier.
"I could have bought them as well, and looking back, I should have," Buffett said about Visa (V) and Mastercard in 2018, referring to his own investment in American Express.
As noted above with StoneCo, Buffett is a big believer in companies that process payments.
Berkshire Hathaway initiated its position in Mastercard during the first quarter of 2011, and given the stock's performance ever since, it's obvious why Buffett wishes Berkshire Hathaway owned more. Including dividends, MA shares have generated an annualized return of 32.9% since March 31, 2011.
Shares held: 10,562,460
Holding value: $1,816,849,000
Percent of portfolio: 0.84%
Like Mastercard, Visa (V, $179.75) was the idea of lieutenants Todd Combs and/or Ted Weschler (Buffett won't tell). And as with Mastercard, Buffett wishes BRK.B had bought more. Visa operates the world's largest payments network, and thus is well-positioned to benefit from the growth of cashless transactions and digital mobile payments.
Berkshire Hathaway first bought Visa in the third quarter of 2011, and it has proven to be a winner of a stock pick. Including dividends, Visa has delivered a whopping annualized return of almost 31% since Sept. 30, 2011.
"If I had been as smart as Ted or Todd, I would have (bought Visa)," Buffett told shareholders at the 2018 annual meeting.
Berkshire owns 0.5% of Visa's shares outstanding, according to data from S&P Global Market Intelligence.
Liberty Sirius XM Group
Shares held (Class A / Class C): 14,860,360 / 31,090,985
Holding value (Class A / Class C): $617,744,000 / $1,304,578,000
Percent of portfolio (Total): 0.90%
Sirius XM is the company so nice, Buffett needs to own it twice. Well, thrice. Sort of.
When dealing with John Malone's companies, it gets complicated.
Liberty Media has for years held a large stake in Sirius XM Holdings. But in 2015, the company actually recapitalized, offering (among other things) several tracking stocks that allowed investors to enjoy in the performance of Liberty's Sirius XM investment directly rather than get it piecemeal through Liberty Media itself.
Thus, Buffett was exposed to Sirius XM before it directly invested in SIRI shares in Q4 2016. But over time, he has bought more of the tracking stock, which currently represents a 70.4% stake in Sirius XM. The Berkshire Hathaway portfolio now holds roughly 46 million shares of Liberty Sirius XM Group Series A (LSXMA, $47.65) and Liberty Sirius XM Group Series C (LSXMK, $47.36) combined.
In fact, Warren Buffett is the largest institutional shareholder in each class, holding 4.7% of Liberty Sirius XM's A shares, and 15.2% of the C shares. Combined with his SIRI stake, the Oracle of Omaha holds three different investments in Sirius XM.
Shares held: 21,938,642
Holding value: $1,939,595,000
Percent of portfolio: 0.90%
United Continental (UAL, $92.52) is one of the four major airline stocks that Buffett bought during the third quarter of 2016 when he surprised the market with his about-face on the industry.
Less than a year later, it represented something of a black eye when a passenger was injured while being removed against his will from a sold-out flight. But United has recovered from that reputational hit, in part simply because there are so few options that boast its geographical reach.
As noted above with American Airlines, Buffett thinks air carriers today offer much better growth prospects than they did in the last century, which was a bloodbath for capital.
Berkshire Hathaway's portfolio holds 8.5% of UAL shares outstanding, making it the airline's second-largest shareholder. United's stock has delivered an annualized total return of about 20% since the end of Q3 2016.
Shares held: 5,426,609
Holding value: $2,236,414,000
Percent of portfolio: 1.04%
Charter Communications (CHTR, $479.97) is yet another Berkshire Hathaway portfolio holding with a John Malone connection - albeit a small one now. Malone served on the telecom and media company's board of directors from 2013 until 2018, when he stepped down to concentrate his focus on a smaller group of companies. (He does remain a director emeritus, however.)
Charter Communications markets cable TV, internet, telephone and other services under the Spectrum brand, which is America's second-largest cable operator behind Comcast (CMCSA). It greatly expanded its reach in 2016 when it acquired Time Warner Cable and sister company Bright House Networks.
Buffett entered CHTR in the second quarter of 2014, but he has seemingly lost his love for the telecom company in recent years. His position has been trimmed down from 9.4 million shares in early 2017 to just 5.4 million shares as of Berkshire's most recent 13F. The move away from Charter meshed with a lousy 2018 for the stock, which lost 15% that year. However, Buffett dropped another fifth of his position in Q1 2019, then another 284,102 shares (4%) in the second quarter ... in a year that CHTR shares have rocketed ahead by 68%.
The current stake represents about 1% of Berkshire Hathaway's holdings, and a decent-sized 2.4% ownership in Charter.
Shares held: 12,952,745
Holding value: $2,443,275,000
Percent of portfolio: 1.14%
Stocks aren't good or bad in a bubble - one investor's brilliant purchase often is, depending on timing, another investor's biggest failure.
Take Verisign (VRSN, $187.25) - an internet infrastructure service company that quite literally keeps the world connected online and acts as a domain registry for the .com, .net and other top-level domains.
Stanley Druckenmiller, a famed former hedge fund manager, made a $200 million short on tech stocks in early 1999 while investing for George Soros' Quantum Fund, but lost $600 million in the trade. He then tried to win it back via a big $6 billion buy-in of tech stocks including Verisign ... but he lost $3 billion in six weeks as VRSN and several other recent purchases flopped, making it one of the "smart money's" worst stock calls of all time.
The Oracle of Omaha has had an entirely different experience.
Berkshire bought Verisign, whose dominance of the space exemplifies Buffett's love of deep moats, during a dip in the final quarter of 2012. The roughly 3.7 million shares were purchased at an average cost of $38.82 per share. VRSN has returned more than 380% since the end of 2012 - well more than double the S&P 500's roughly 150% return including dividends.
Berkshire Hathaway now owns almost 13 million shares in the company, making it the largest institutional investor in Verisign at a 10.9% ownership stake.
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Shares held: 38,565,570
Holding value: $2,668,351,788
Percent of portfolio: 1.24%
Berkshire disclosed a position in DaVita (DVA, $68.93) during 2012's first quarter.
Since DVA was a large position of Ted Weschler's Peninsula Capital in his pre-Berkshire days, it wasn't unreasonable to assume that it was his pick. Weschler confirmed as much in 2014.
DaVita, which provides kidney care and operates dialysis centers, serves more than 1.7 million patients in the U.S. and nine other countries. Aging baby boomers and a graying population in many developed markets should provide a strong, secular tailwind.
Berkshire, by the way, is DaVita's largest shareholder by a wide margin. Its stake of 38.6 million shares accounts for more than 23% of DVA's shares outstanding.
Shares held: 72,269,696
Holding value: $2,708,669,000
Percent of portfolio: 1.26%
Warren Buffett first took a stake in General Motors (GM, $36.80), the world's fourth-largest auto manufacturer by production, in early 2012. He most recently upped Berkshire Hathaway's holdings in the fourth quarter of 2018, when he increased his position by 37%.
With more than 72 million shares, Berkshire Hathaway holds over 5% of the car company's shares outstanding, making it General Motors' sixth-largest investor.
In many ways, GM looks like a classic Buffett value bet.
General Motors is an iconic American brand and, as the No. 1 domestic automaker, a bet on the long-term growth of the U.S. economy. Buffett has sung the praises of GM CEO Mary Barra on multiple occasions. At one point, he said, "Mary is as strong as they come. She is as good as I've seen."
GM also looks like a value pick. The stock trades at less than six times expected earnings, according to data from Refinitiv, and sports a dividend yield of 4.1%. Buffett paid an estimated average price per share of $31.82 when he initiated his position during the first quarter of 2012. Including dividends, General Motors has returned a disappointing 81% since March 30, 2012 - roughly half the market's total return in that time.
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Shares held: 53,649,213
Holding value: $2,897,595,000
Percent of portfolio: 1.35%
Southwest Airlines (LUV, $57.63) is part of the quartet of major airline stocks Buffett bought in late 2016. The discount carrier is beloved by its customers and employees alike, typically finding itself near the top of "Best Airline" and "Best Places to Work For" lists.
As an investment, it has performed decently within the Berkshire fold. LUV has generated an annualized total return of 16.1% since Aug. 31, 2016.
Berkshire Hathaway pared its position in LUV by 2%, or 1.2 million shares in the first quarter of 2019, but that doesn't mean Buffett is suddenly bearish. The selling was necessary to keep Berkshire's ownership stake below 10%, which would trigger regulatory hassles. BRK.B has stayed put since then, and remains Southwest Airlines second-largest shareholder at just a hair under 10% of the company's shares outstanding, according to data from S&P Global Market Intelligence.
Bank of New York Mellon
Shares held: 80,937,250
Holding value: $3,659,172,000
Percent of portfolio: 1.70%
Despite its impressive-sounding moniker, Bank of New York Mellon (BK, $48.42) is not exactly a household name. But it's a big deal in financial services, and Warren Buffett has been a fan for some time.
Bank of New York Mellon is a custodian bank that holds assets for institutional clients and provides back-end accounting services. Its roots actually go all the way back to 1784, when Bank of New York was founded by a group including Alexander Hamilton and Aaron Burr. Today, BK is the nation's ninth-largest bank by assets, according to data from the Federal Reserve.
Berkshire Hathaway first took a position in BK back in the third quarter of 2010, when it paid an estimated average price of $43.90. Warren Buffett last added to Berkshire's stake in BK in the fourth quarter of 2018, when he increased his holding company's investment by 3%, or more than 3 million shares. With a total of 80.9 million shares, Berkshire Hathaway owns 8.6% of all shares outstanding, making it BK's largest investor by a decent margin. (Vanguard is No. 2 at 6.8%.)
Shares held: 18,353,635
Holding value: $3,803,424,000
Percent of portfolio: 1.77%
Just because Buffett soured on Procter & Gamble, Johnson & Johnson and Verizon, don't think he's lost his love of Dow stocks.
Berkshire Hathaway first picked up its stake in Goldman Sachs (GS, $219.43) during the 2008 financial crisis. Buffett paid $5 billion for preferred shares and warrants to purchase common stock. The preferred shares came with a dividend yield of 10% - almost twice the rate of some preferred stocks, which already are considered generous income plays.
Goldman redeemed its preferred shares in 2011. Berkshire bought another $2 billion in GS stock when it exercised the warrants in 2013.
Buffett has parlayed the original investment into a 5.1% stake in Wall Street's preeminent investment bank, worth more than $3.8 billion. Berkshire is now the bank's fourth-largest shareholder.
Delta Air Lines
Shares held: 70,910,456
Holding value: $4,084,442,000
Percent of portfolio: 1.90%
For an industry he once shunned, Buffett sure does like his airline stocks now.
And from the looks of things, Delta Air Lines (DAL, $56.55), which was part of the group of air carriers he first picked up in the third quarter of 2016, might be his favorite.
Berkshire Hathaway raised its stake in DAL by 8%, or 5.4 million shares, during the first quarter of 2019. Indeed, the holding company is now Delta's largest shareholder, owning 10.9% of the carrier's shares outstanding. Buffett explained to CNBC that Berkshire crossed the 10% threshold because Delta bought back so much of its own stock.
Once he found out he had "lost his virginity," Buffett said, he decided to buy even more DAL shares.
Shares held: 24,669,778
Holding value: $5,053,111,000
Percent of portfolio: 2.35%
Moody's (MCO, $218.86) is a business and financial services firm best known for its Moody's Investors Service credit rating arm - one of the three major American business credit ratings agencies alongside Standard & Poor's and Fitch Ratings. It also offers financial analysis technology via Moody's Analytics.
MCO is a longtime, significant holding in the Berkshire Hathaway portfolio - and an ironic one to boot.
"Uncle Warren" first dipped his toe in during the first quarter of 2001, and he has been content with his investment of late, leaving his 24.7 million-share stake unchanged over the past couple of years.
The funny thing about Berkshire's holding in Moody's is that Buffett said back in 2010 that "Our job is to rate credit ourselves. We do not outsource that to ratings agencies." Yet Berkshire Hathaway is the largest institutional holder of MCO, owning 13% of the financial firm. (Vanguard is a distant second at 6.6%.)
The holding is meaningful on Buffett's end, too. At more than 2%, Moody's is one of Berkshire's 10 largest positions.
Shares held: 59,514,932
Holding value: $7,004,312,000
Percent of portfolio: 3.26%
Warren Buffett has been going all in on big banks over the past year. Berkshire Hathaway initiated a position in JPMorgan Chase (JPM, $128.60), the nation's largest bank by assets, during the third quarter of 2018 and has been boosting it ever since. BRK.B upped its stake by 40% in the fourth quarter of last year and again by 18% in the first quarter of 2019.
As noted, Buffett added to or started new positions in several American mega-banks and investment firms over the past couple of quarters. Berkshire's stake is now up to 1.9% of JPM shares outstanding, making it the company's fifth-largest shareholder.
Part of the attraction for JPMorgan is because of Warren Buffett's professed admiration for CEO Jamie Dimon. The two have partnered with Jeff Bezos, chairman and CEO of Amazon.com, to form a health care initiative intended to improve coverage and lower costs. Dimon and Buffett also have teamed up to decry the practice of giving quarterly profit forecasts, saying "short-termism is hurting the economy."
Shares held: 132,459,618
Holding value: $7,330,315,000
Percent of portfolio: 3.41%
U.S. Bancorp (USB, $58.57) is one of the oldest Buffett stocks in the Berkshire Hathaway portfolio. The Oracle of Omaha initiated his position in the first quarter of 2006.
Buffett is notoriously tight-lipped about U.S. Bancorp, Barron's notes, but the nation's fifth-largest bank by assets and America's biggest regional bank has been a solid stock pick. The lender has consistently generated the highest returns among the top 10 banks.
Warren Buffett most recently boosted Berkshire Hathaway's stake in USB during the second quarter, with a small addition of about 132 million shares. The position now accounts for 3.4% of the holding company's equity portfolio. BRK.B is the company's largest shareholder, at 8.4% of its shares outstanding. Vanguard, a large shareholder in many blue chips, is No. 2 with a 7.2% stake.
Shares in the bank have delivered an annualized total return of 7.8% since March 31, 2006.
Shares held: 325,634,818
Holding value: $9,096,609,000
Percent of portfolio: 4.23%
Warren Buffett was one of the driving forces behind the 2015 merger of packaged-food giant Kraft and ketchup purveyor Heinz to create Kraft Heinz (KHC, $30.96). It's Berkshire's sixth-largest stock investment with a current market value of $9.1 billion.
And Buffett regrets it.
Berkshire Hathaway recorded a $3 billion non-cash loss from an impairment of intangible assets in 2018, "arising almost entirely from our equity interest in Kraft Heinz," Buffett wrote in his 2019 letter to shareholders.
More succinctly, in an interview with CNBC, Buffett said "I was wrong" on KHC. Yup, he says he overpaid. Kraft's shares have lost 14.7% on an annualized total return basis since Sept. 30, 2015. That includes a 23% plunge in 2019.
Berkshire Hathaway owns 26.7% of Kraft Heinz, making it the food company's second-largest shareholder, according to data from S&P Global Market Intelligence. Private investment firm 3G Capital - who teamed up with Berkshire in 2013 to purchase H.J. Heinz - is tops at 48.8%.
Shares held: 151,610,700
Holding value: $17,932,512,000
Percent of portfolio: 8.34%
Buffett likes to say this his preferred holding period is "forever." Look no further than Dow component American Express (AXP, $120.93) to understand just how serious he is about investing for the long haul.
Buffett picked up his initial stake in the credit card company in 1963, when a struggling AmEx badly needed capital. Berkshire obliged, getting favorable terms on its investment. Buffett has played the role of white knight many times over the years, including during the 2008 financial crisis, as a means to get stakes in good companies at a discount. (Think: Goldman Sachs and Bank of America.)
Berkshire Hathaway, which owns 18.3% of American Express' shares outstanding, is by far the company's largest shareholder. No. 2 Vanguard owns less than 6%. Buffett praised the power of AmEx's brand at Berkshire's 2019 annual meeting. "It's a fantastic story, and I'm glad we own 18% of it," he said.
A 12.5% average annual return over the past quarter-century would make most investors glow.
Shares held: 378,369,018
Holding value: $19,084,935,000
Percent of portfolio: 8.87%
Wells Fargo (WFC, $53.49) has been roiled by a series of scandals since 2016, including opening millions of phony accounts, modifying mortgages without authorization and charging customers for auto insurance they did not need.
It has been a slow clean-up process. The bank in early June reached a $386 million deal to settle a class-action lawsuit brought by customers who say WFC forced them to buy unnecessary car insurance.
You might think that Buffett is souring on Wells Fargo given that he has sold off WFC shares in all but one quarter since the start of 2018, including this year's Q3. However, Berkshire is merely doing routine paring on its position to keep it below a regulatory 10% maximum ownership threshold for banks.
Indeed, Buffett appears to stand by the nation's fourth-largest bank by assets. "If you look at Wells, through this whole thing they're uncovering a whole lot of problems, but they aren't losing any customers to speak of," Buffett told Financial Times in an April interview.
The holding company first added Wells Fargo to the portfolio in 2001, and its still-outsize position makes it the top owner of WFC at 8.6% of all shares.
Shares held: 400,000,000
Holding value: $21,776,000,000
Percent of portfolio: 10.12%
Buffett, an unabashed fan of Cherry Coke, started investing in Coca-Cola (KO, $52.63) soon after the stock market crash of 1987. In his 1988 letter to Berkshire shareholders, Buffett said he expected to hold on to the stock "for a long time."
Three decades later, he has proven true to his word. Berkshire is KO's largest shareholder with 9.4% of its shares outstanding.
Coca-Cola made a brief appearance as a component of the Dow Jones Industrial Average in the 1930s. Shares were added back to the Dow in 1987, and they've remained a stalwart member ever since.
While Coca-Cola's stock performance hasn't impressed - its 153% total return over the past decade is dwarfed by the S&P 500's 247% return - it has been an income investor's dream. The beverage maker has increased its dividend annually for 57 years.
Bank of America
Shares held: 927,248,600
Holding value: $27,047,843,000
Percent of portfolio: 12.57%
It should be clear by now that Buffett is bonkers for bank stocks. And the crown jewel of his financial sector holdings is Bank of America (BAC, $32.70), the nation's second-largest bank by assets.
Buffett's interest in BAC dates back to 2011, when he swooped in to shore up the firm's finances in the wake of the Great Recession. In exchange for investing $5 billion in the firm, Berkshire received preferred stock yielding 6% and warrants giving Berkshire the right to purchase BofA common stock at a steep discount. (The Oracle of Omaha exercised those warrants in 2017, netting a $12 billion profit in the process.)
Warren Buffett recently tacked on to his position, adding roughly 927 million shares during the second quarter of 2019. That's an upgrade of about 3% for Berkshire Hathaway. Berkshire now holds 927.2 million shares, worth $27.1 billion.
BofA is a big deal for Berkshire Hathaway, and it works the other way around, too. BAC shares account for a whopping 12.6% of Buffett's equity portfolio. By the same token, Berkshire is Bank of America's largest shareholder, at just under 10% of its shares outstanding.
Shares held: 248,838,679
Holding value: $55,732,400,000
Percent of portfolio: 25.91%
Apple (AAPL, $262.64) is king of the Buffett stocks. The Oracle of Omaha has never been much of a tech investor, but he sure does love Apple. He took his first bite in early 2016, and the iPhone maker has since become Berkshire Hathaway's single-largest holding. Brace yourselves: AAPL accounts for more than a quarter of the total value of Berkshire Hathaway's equity portfolio, even after Berkshire took profits on a marginal sliver of its position in Q3.
And at almost 250 million shares, BRK.B is Apple's third-largest investor. The holding company owns 5.1% of all AAPL shares outstanding. Only Vanguard and BlackRock - giants of the passively managed index fund universe - hold more Apple stock.
Unlike many of Berkshire Hathaway's holdings, Buffett has been happy to discuss his ardor for Apple. As he has said more than once on CNBC, he loves the power of Apple's brand and its ecosystem of products (such as the iPhone and iPad) and services (such as Apple Pay and iTunes).
"I do not focus on the sales in the next quarter or the next year," Buffett has said. "I focus on the ... hundreds and hundreds and hundreds of millions of people who practically live their lives by (the iPhone)."
His faith in the company has been richly rewarded in 2019, with a 67% run-up in shares driven by excitement over a new suite of services and its refreshed iPhone lineup.
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Copyright 2019 The Kiplinger Washington Editors