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Warren Buffett's Berkshire Buys Amazon, Boosts JPMorgan, Delta in 1st Quarter

- By Holly LaFon

Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) on Wednesday revealed a $900 million stake in Amazon (AMZN).


One of Berkshire's portfolio managers, Ted Weschler or Todd Combs, bought the Amazon, Buffett told media this month. When asked about whether the stock's high valuation suggested a shift in value investing approach for his succeeding portfolio managers, Buffett said at his annual shareholder meeting that they were practicing the same type of investing he does.

"The idea that value is somehow connected to book value or low price-earnings ratios or anything - as Charlie has said, all investing is value investing. You're putting out some money now to get more later on. And you're making a calculation as to the probabilities of getting that money and when you'll get it and what interest rates will be and all the same calculation goes into whether you're buying some bank at 70% of book value or you're buying Amazon at some very high multiple of reported earnings," Buffett said.

In its update for the first quarter ended March 31, Amazon was the only new position added to Berkshire's portfolio. Managers increased existing positions in Red Hat Inc. (RHT), JPMorgan (JPM), Delta Airlines (DAL), PNC Financial Services Group Inc. (PNC).

The portfolio's value stood at $199.48 billion at first quarter-end, with 48 stocks. The largest sector weightings were financial services at 46.19%, technology at 25.71% and consumer defensive at 15.29%.

Berkshire Hathaway also sold out of Verizon Communications Inc. (VZ) and cut its Phillips 66 (PSX) in half, with modest trims to Charter Communications (CHTR), Wells Fargo & Co. (WFC) and Southwest Airlines Co. (LUV).

New buy: Amazon.com Inc. (AMZN)

Berkshire Hathaway purchased 483,300 shares of Amazon.com, giving it 0.43% portfolio weight. The stock's first-quarter share price averaged $1,661.

Amazon.com Inc. has a market cap of $921.23 billion; its shares were traded around $1871.15 Wednesday with a price-earnings ratio of 78.12 and price-sales ratio of 3.88. Amazon.com Inc. had an annual average earnings growth of 33.80% over the past 10 years. GuruFocus rated Amazon.com Inc. the business predictability rank of 4-star.

Red Hat Inc. (RHT)

Berkshire increased its position in Red Hat by 22.38%, buying 934,679 shares to end the quarter with 5,110,471 shares. The holding represented 0.47% of the portfolio. The stock's first-quarter share price averaged $179.

Red Hat Inc. has a market cap of $32.93 billion; its shares were traded around $185.28 Wednesday with a price-earnings ratio of 80.20 and price-sales ratio of 10.27. Red Hat Inc. had an annual average earnings growth of 16.50% over the past 10 years. GuruFocus rated Red Hat Inc. the business predictability rank of 5-star.

JPMorgan Chase & Co. (JPM)

Berkshire increased its position in JPMorgan by 18.75%, buying 9,398,538 shares. The holding totaled 59,514,932 shares, representing 3.02% of the portfolio. The stock's first-quarter share price averaged $103.

JPMorgan Chase & Co. has a market cap of $356.51 billion; its shares were traded around $109.90 Wednesday with a price-earnings ratio of 11.84 and price-sales ratio of 3.36. The trailing 12-month dividend yield of JPMorgan Chase & Co. is 2.68%. The forward dividend yield of JPMorgan Chase & Co. is 2.90%.

Delta Air Lines Inc. (DAL)

Berkshire increased its position in Delta Air Lines by 8.2%, buying 5,375,456 shares. The holding totaled 70,910,456 shares, reflecting 1.84% of the portfolio.

Delta Air Lines Inc. has a market cap of $36.04 billion; its shares were traded around $55.05 with a price-earnings ratio of 9.24 and price-sales ratio of 0.83. The trailing 12-month dividend yield of Delta Air Lines Inc. is 2.54%. The forward dividend yield of Delta Air Lines Inc stocks is 2.53%. Delta Air Lines Inc. had an annual average earnings growth of 19.40% over the past five years.

PNC Financial Services Group Inc. (PNC)

Berkshire boosted its position in PNC Financial Services Group by 4.94%, buying 407,992 shares. It had 8,671,054 shares at quarter-end, reflecting 0.53% of the portfolio.

PNC Financial Services Group Inc. has a market cap of $58.09 billion; its shares were traded around $128.68 Wednesday with a price-earnings ratio of 11.82 and price-sales ratio of 3.46. The trailing 12-month dividend yield of PNC Financial Services Group Inc. is 2.95%. The forward dividend yield of PNC Financial Services Group Inc. is 2.93%.

See Warren Buffett (Trades, Portfolio)'s portfolio here.

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This article first appeared on GuruFocus.