Berkshire Hathaway CEO Warren Buffett was active in the stock market in the third quarter, buying stock in Bank of America, selling shares of Wells Fargo, and apparently trimming the company’s big stake in Apple.
There was a lot more activity that has so far gone undisclosed. Investors will learn about it when Berkshire reports individual third-quarter equity holdings in its $255 billion portfolio late Friday or on Monday—the Securities and Exchange Commission deadline for 13-F filings from institutional investors is Monday.
Berkshire’s 10-Q report released last weekend showed that the company was a net buyer of nearly $5 billion of stocks in the third quarter—not a large amount. But there was plenty of activity behind that net figure, as the company bought about $17.6 billion of stocks and sold $12.9 billion.
Berkshire’s class A shares (ticker: BRK.A) were up 0.6%, to $338,951, in early trading Friday.
One clue about the buys and sells was that Berkshire’s cost basis in financial stocks fell by $6 billion in the period, adjusted for the purchase of about $2 billion of Bank of America (BAC) stock during the quarter. This indicates sales of financial stocks likely exceeding $6 billion in the third quarter.
The cost basis of Berkshire’s industrial stockholdings rose by $15 billion in the third quarter from the second quarter, indicating sizable purchases. Part of that could be purchases in the five Japanese trading companies that Berkshire disclosed in late August. Those stakes totaled about $6 billion and were bought over the prior 12 months.
Did Buffett buy depressed energy stocks like Exxon Mobil (XOM) or Chevron (CVX)—a group that he knows well? Berkshire had no immediate comment.
Berkshire disclosed the sale of about $2 billion of Wells Fargo (WFC) in September and may have further reduced or eliminated that holding, which was last reported at around 137 million shares. Berkshire has sharply reduced its stake in Wells Fargo this year by over 50% as Buffett has apparently soured on it after holding a big position for 30 years.
Berkshire could also have further reduced its holding in JPMorgan Chase (JPM), which it cut by about 60%, to 22 million shares, in the second quarter. Other large Berkshire bank-stock holdings are U.S. Bancorp (USB) and Bank of New York Mellon (BK).
It appears that Berkshire sold about $4 billion of Apple (AAPL) stock in the third quarter based on a comparison of its disclosed holding in the third quarter 10-Q versus the second-quarter 10-Q.
The Berkshire stake remains huge, at about 965 million shares, or $115 billion, down 38 million shares from the second-quarter holding, Barron’s calculates. Apple accounts for about 40% of the company’s equity holdings. Berkshire’s second-largest holding is Bank of America at about $27 billion—roughly one billion shares.
Wall Street often attributes Berkshire’s equity activity to Buffett, but buys and sells of smaller positions of under $1 billion to $2 billion often reflect activity by Buffett’s investment lieutenants, Ted Weschler and Todd Combs. Berkshire’s holding of Kroger (KR), some 22 million shares worth about $700 million, is overseen by either Combs or Weschler, Buffett has said.
Combs and Weschler, who each run about $15 billion in equities for Berkshire, may take over the entire portfolio in the post-Buffett era.