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Warren Buffett's Berkshire Buys 4 Stocks, Sells Walmart in 3rd Quarter

- By Holly LaFon

Berkshire Hathaway, where investing legend Warren Buffett (Trades, Portfolio) is CEO and chairman, unveiled its third-quarter portfolio on Wednesday afternoon, revealing its most aggressive buying in six years.


Berkshire purchased four stocks, primarily in the financial sector: JPMorgan Chase & Co. (JPM), Oracle Corp. (ORCL), PNC Financial Services Group Inc. (PNC) and The Travelers Companies Inc. (TRV). Managers of Berkshire's portfolio also increased positions in seven holdings, the largest of which were financials: Goldman Sachs Group Inc. (GS), Bank of America Corp. (BAC) and US Bancorp (USB).

The activity expanded the financial sector's share of Berkshire's portfolio to 42.59% from 40.5% in the prior quarter. Stocks from the sector continue to occupy the greatest chunk of Berkshire's portfolio.

In sales, Berkshire ended its long-term investments in two stocks, Sanofi SA (SNY) and Walmart (WMT). It also halved its position in oil refiner Philips 66 (PSX) and made reductions of just over 2% to American Airlines Group (AAL) and United Continental Holdings Inc. (UAL).

Berkshire does not specify which trades were made by Buffett or one of his portfolio managers, Ted Weschler and Todd Combs, as they all share the portfolio. They sometimes claim a certain investment in interviews with the press or elsewhere.

At third quarter-end, Berkshire's portfolio value totaled $221.02 billion, with 46 stocks listed. The largest positions changed to Apple (AAPL) at 25.79% of the portfolio, Bank of America at 11.69% and Wells Fargo & Co. at 10.52% as The Kraft Heinz Co. (KHC) fell from third place to fifth.

Berkshire's new buys

JPMorgan Chase & Co.

Berkshire purchased 35,664,767 shares of the company, giving it 1.82% portfolio weight. The stock's price averaged $114 in the third quarter.

JPMorgan Chase & Co. has a market cap of $356.92 billion; its shares were traded around $107.33 Wednesday with a price-earnings ratio of 13.28 and sales ratio of 3.49. The trailing 12-month dividend yield of JPMorgan Chase & Co. is 2.30%. The forward dividend yield of JPMorgan Chase & Co. is 2.92%.

Oracle Corp.

Berkshire purchased 41,404,791 shares, giving it 0.97% portfolio weight. The stock's third-quarter price averaged $49 per share.

Oracle Corp. has a market cap of $183.95 billion; its shares were traded around $48.84 Wednesday with a price-earnings ratio of 53.66 and price-sales ratio of 5.07. The trailing 12-month dividend yield of Oracle Corp. is 1.56%. The forward dividend yield of Oracle Corp. is 1.54%. Oracle Corp. had an annual average earnings growth of 8.10% over the past 10 years. GuruFocus rated Oracle Corp. the business predictability rank of 2-star.

PNC Financial Services Group Inc.

Berkshire purchased 6,087,319 shares, giving it 0.38% portfolio space. The third-quarter share price averaged $142.

PNC Financial Services Group Inc. has a market cap of $61.89 billion; its shares were traded around $134.13 Wednesday with a price-earnings ratio of 11.06 and price-sales ratio of 3.73. The trailing 12-month dividend yield of PNC Financial Services Group Inc. is 2.53%. The forward dividend yield of PNC Financial Services Group Inc. is 2.80%.

The Travelers Companies Inc.

Berkshire purchased 3,543,688 shares, giving it 0.21% portfolio space. The third-quarter share price averaged $129.

The Travelers Companies Inc. has a market cap of $32.65 billion; its shares were traded around $123.04 Wednesday with a price-earnings ratio of 13.75 and price-sales ratio of 1.14. The trailing 12-month dividend yield of The Travelers Companies Inc. is 2.43%. The forward dividend yield of The Travelers Companies Inc. is 2.43%. The Travelers Companies Inc. had an annual average earnings growth of 7.70% over the past 10 years.

See Berkshire Hathaway's portfolio here.

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This article first appeared on GuruFocus.