Berkshire Hathaway or the S&P 500 over the Next Decade?

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Part 9
Berkshire Hathaway or the S&P 500 over the Next Decade? PART 9 OF 11

What Berkshire’s Major Portfolio Changes Indicate

Portfolio changes

According to its 13F filings, Berkshire Hathaway’s (BRK.B) portfolio value stood at $162 billion on June 30, 2017, representing a marginal decline from $163 billion in 1Q17. Berkshire has made new investments in Synchrony Financial (SYF) and STORE Capital (STOR).

Synchrony Financial is an offshoot of GE engaged in a private-label credit-card business, which went public in August 2014. STORE Capital is middle-market net lease real estate investment trust. Berkshire increased its stake in the Bank of New York Mellon (BK) and Liberty Sirius XM (LSXMA), with investments of $500 million, and in General Motors (GM), with an investment of $350 million.

What Berkshire&#8217;s Major Portfolio Changes Indicate

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Exits and stake increases

Berkshire has sold its entire stake of $300 million in General Electric (GE) and Wabco (WBC). The company’s managers have consistently increased stakes in Apple (AAPL), with a total valuation of $20.8 billion, forming the third-largest investment. It has added Apple since 1Q16, within the price band of $93 and $122.

Given the expectation of a hit with its new 10th anniversary iPhone, the stock has risen to $160 in recent months. The investment could thus yield a higher return over the next one to two years.

Berkshire’s diversified holdings have resulted in low beta for the stock, when compared with the broader market (SPY), and it’s relatively less risky for long-term investments. However, in its investment portfolio, its top five bets account for almost two-thirds of its total portfolio value.


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