We still don’t know what stock, or stocks, Berkshire Hathaway was secretly buying during the second half of last year, and, probably, is still buying. We do, however, know a number of the other names it was buying and selling.
The mystery of Berkshire’s secret stock target deepens
We still don’t know what stock, or stocks, Berkshire Hathaway was secretly buying during the second half of last year, and, probably, is still buying.
We can guess, however, that given its continuing desire to keep its target to itself, it has been spending a lot of money.
In its SEC filing disclosing what was in its portfolio of publicly traded U.S. stocks as of December 31, Berkshire repeated the line that was in its previous quarterly filing for the three months ending September 30:
“Confidential Treatment Requested. (The Manager has omitted from this public Form 13F one or more holding(s) for which it is requesting confidential treatment from the U.S. Securities and Exchange Commission pursuant to section 13(f) of the Exchange Act and rule 24b-2 thereunder)”
Only the SEC knows Reuters file photo | Jim Bourg
The goal is to prevent copycat buyers from also digging into a stock Berkshire is accumulating because the additional demand would raise its price, forcing Buffett & Co. to either spend more or cut back on their planned purchases.
Barron’s speculates Berkshire is buying in the financial sector, pointing to an increase of over $1 billion in the cost basis of its holdings in that area, as disclosed in its Q3 10-Q report.
We may not know the answer until Berkshire’s Q1 portfolio filing in mid-May, although it could come up sooner in Buffett’s annual letter to shareholders in the next few weeks or at the shareholders meeting in early May.
Another possibility is that Berkshire will need to disclose its position if it reaches 5% of the target’s outstanding shares.
Here’s what we do know
Dollar change is based on December 31, 2023 stock prices
A sizable increase in both percentage (+14.4%) and dollars (almost $2.4 billion) for Chevron, but it follows four straight quarters of declines from 165 million shares as of September 30, 2022. Berkshire’s 126 million shares are currently valued at almost $19 billion, which is about 5% of the portfolio’s total value.
The Occidental Petroleum share count from the end of December has been superseded by filings showing the buying continued into the first quarter. Because it owns more than 10% of the oil company, Berkshire is required to disclose its moves within two business days of making them.
An enormous percentage surge for Sirius XM generated just a $167 million increase in value.
Relatively small stakes in Globe Life, StoneCo, Markel, and D.R. Horton were entirely eliminated. These positions were almost certainly controlled by the portfolio managers, not by Buffett himself.
The sale of almost $2 billion of Apple stock generated someheadlines , and it is a lot of money, even at Berkshire. But compared to the total value of its position, which is currently more than $167 billion, it is just a 1.1% trim in the number of shares Berkshire owns.
The 78% drop for HP shares, on the other hand, was significant, cutting that position by roughly $2.4 billion. It follows a 15% reduction in the third quarter, bringing Berkshire’s holdings to less than 23 million shares currently valued at $653 million.That’s down from 121 million shares worth $3.7 billion at the end of last June. The stock first came into the portfolio during the first quarter of 2022. Its price is down 24% since the beginning of that period.
A table showing Berkshire’s entire portfolio as of the end of December is below, just above “Buffett Around the Internet.”
Berkshire’s stock keeps hitting new highs
Berkshire spent $7 billion to rebuy its own stock during the first three quarters of last year, and unlike HP, it has turned out to be a good investment so far.
For the eleventh time since January 23, the A shares closed at a record high today. At $610,086 per share, it is up more than 12% so far this year.
The B shares have closed at a record high 13 times, including today’s finish of $405.99.
They’re up almost 14% YTD.
Both classes of Berkshire’s stock are strongly outperforming the benchmark S&P 500 stock index’s YTD gain of 5.2%, including dividends.
