How Berkshire Hathaway’s Holdings Changed in Q3

Berkshire Hathaway disclosed its holdings at the end of the third quarter on Thursday. Notably, there were a few surprises in the filing. However, the firm’s top holdings remained the same.

Berkshire Hathaway’s holdings

On Thursday, Berkshire Hathaway (BRK.B) (BRK.A) released its third-quarter 13F. There were some surprises in the filing. The company took a new stake in RH (RH). The company held about 1.21 million RH shares at the end of the third quarter. Based on the closing prices on September 30, the stake was valued at $206.3 million. The company also disclosed a new stake in Occidental Petroleum. Earlier this year, the company committed $10 billion towards Occidental Petroleum in its bid to acquire Anadarko Petroleum. However, the deal pitched Warren Buffett against fellow billionaire Carl Icahn. Icahn was against the transaction.

Top sells in Q3

In the third quarter, Berkshire Hathaway trimmed its stakes in Wells Fargo (WFC), Phillips 66, and Apple (AAPL). Notably, the company has been gradually selling Wells Fargo shares in a bid to keep its stake in the bank below 10%. However, keeping holdings below 10% hasn’t really been important for the company. Last month, Berkshire Hathaway applied for approval with the Fed to increase its stake in Bank of America (BAC) beyond 10%. Typically, stakes beyond 10% attract more regulatory scrutiny. As a result, some hedge funds try to limit their stakes below 10%. While Buffett has tried to limit the company’s stake in publicly traded securities below 10%, it holds a much bigger stake in some companies like American Express (AXP).

Warren Buffett and Apple

Meanwhile, Berkshire Hathaway trimming its stake in Apple might surprise some investors. However, we don’t know if Buffett sold these shares. In the fourth quarter of 2018, Berkshire Hathaway sold some Apple shares. In the first and second quarter, the company maintained a status quo on its Apple investment. Although we’ll get more details, it seems like another investment manager at Berkshire Hathaway might have sold Apple shares to generate cash for another investment. Notably, Buffett has admired Apple on multiple occasions. After the 13F in the fourth quarter of 2018 Buffett said that he hadn’t sold Apple shares in the quarter.

Berkshire Hathaway’s top holdings at the end of Q3

Apple was Berkshire Hathaway’s top holding followed by Bank of America. Coca-Cola (KO), Wells Fargo (WFC), and American Express were the other three top holdings. The calculations are based on current market prices and holdings at the end of the third quarter. Apple has continued to be Berkshire Hathaway’s biggest holding for many quarters. Apple has risen almost 70% this year. The sharp rise in the stock has increased the market value of Berkshire Hathaway’s investment even more. Based on Thursday’s closing prices, the company’s stake in Apple was valued at over $65 billion. The company’s portfolio of publicly traded securities was valued at almost $234 billion. Bank of America, the second-largest holding in the company’s portfolio, is valued at a little under $31 billion at current market prices.

Buffett plays it safe again

As we noted on Thursday, Buffett has played it safe. While the RH investment was a surprise, a $200 million bet hardly moves the needle for Berkshire Hathaway. Buffett has been somewhat conservative with share repurchases. As a result, there has been a surge in Berkshire Hathaway’s cash pile. The company is holding record cash since Buffett hasn’t been buying many stocks. Read Is Berkshire’s Surging Cash Pile a Warning from Buffett? to learn more.