Start the conversation
Last Wednesday the conglomerate released its stock holdings. Mutual funds and retail investors closely watch the picks to dissect the selections for hints about the company's tactics. Other simply want to mimic Buffett's moves.
This quarter Berkshire disclosed new stakes in General Motors (NYSE: GM) and Viacom (Nasdaq: VIAB), larger positions in Wells Fargo (NYSE: WFC) and Wal-Mart Stores (NYSE: WMT), and a small increased position in International Business Machines (NYSE: IBM).
The Berkshire portfolio ballooned to $89.1 billion on March 31 from $77 billion at the end of 2011. The firm is the largest shareholder in Coca-Cola (NYSE: KO), Wells Fargo and American Express (NYSE: AXP).
The additions come as Buffett and Berkshire Vice Chairman Charlie Munger have tasked former hedge fund managers Todd Combs and Ted Weschler with more investing duties. The two were brought into Berkshire to help oversee investments, as Buffett, Berkshire's CEO and chairman, transitions the company for his ultimate departure.
The 81-year-old sage acknowledged that he makes Berkshire's larger bets, while his team of stock pickers is responsible for smaller wagers.
In his widely read shareholder letter in February, Buffett penned, "When our quarterly filings report relatively small holdings, these are not likely to be buys I made but rather holdings denoting purchases by Todd or Ted. They have the brains, judgments and character" to do the job.
GM to Fuel Berkshire Returns
Raising a great deal of interest was the disclosure that the Oracle of Omaha's firm held 10 million shares of GM on March 31.
As for the GM investment, David Kass, a professor at the University of Maryland's Robert H. Smith School of Business, told Bloomberg News, "There's a pent up demand for cars in this country, because of the financial crisis."
Buffett's stock pickers, Kass added, "had an opportunity to buy at an attractive price, well below the initial public offering."
GM shares jumped on the news, closing up 2.3% to $21.91. Shares are up about 6% this year.
Backed by the U.S. government, the company filed bankruptcy in 2009, and then sold shares in a public offering in 2010 at $33 each.
Berkshire no doubt sees the potential in GM's recovery as American consumers, who parked their money during the recession, return to buying vehicles. GM is on track to show its best vehicle sales since 2007, and sales in China have helped the carmaker regain global industry leadership in yearly deliveries in 2011.
"GM has a lot of good product in the showroom and product coming in 2013," David Kudla, who manages some $1 billion as CEO of Mainstay Capital, told Bloomberg News. "When we look at the economy, at the fundamentals of the industry and the company, the stock's a buy."
Berkshire also upped its ante in Wal-Mart from 39 million shares to 46.7 million. Buffett said the allegations that the Arkansas-based retailer's executives, under U.S. Justice Department investigation for bribing officials to speed expansion in Mexico, are a non-event.
"I don't think the earnings power of Wal-Mart five years from now will be materially affected by the outcome of this situation," Buffet said of the matter at the May 5 shareholder meeting.
Warren Buffett Stocks: Media Focus
Viacom, the owner of MTV and Paramount Pictures, gained 0.6% Wednesday following news of the Berkshire stake, which is roughly 1.59 million shares.
Buffett has a legendary reputation for buying companies and stocks below their intrinsic value and being handsomely rewarded as prices rise.
At the company's annual meeting, Buffett told investors, "The beauty of stocks is that they do sell at silly prices from time to time. That's how Charlie and I got rich."
And on Thursday, Berkshire expanded its media empire further when Media General (NYSE: MEG) reported it had sold nearly all of its 63 newspaper properties, excluding The Tampa Tribune, to Berkshire.
Shares of Media General soared on the news, up 48% in morning trading. MEG closed Friday up 15% for the week at $3.64.
It is the second newspaper deal Buffett inked in the last six months. In November, Buffett purchased The Omaha World Herald Company, the publisher of his hometown paper for $200 million.
"In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway," said Buffett.
Warren Buffett has always had a soft spot in his heart for the newspaper industry. He traces his business acumen and success back to his boyhood days of delivering morning papers on his bike.
Now the investment guru owns scores of publications and his reach in media continues to grow. Buffett will fold the new titles into his BH Media Group.
Berkshire Hathaway (BRK.A) stock slipped about 2% last week, but is up about 4% for the year.
Related Articles and News:
- Money Morning:
The Stocks Warren Buffett is Buying
- Money Morning:
Warren Buffett: How To Invest Like the Oracle of Omaha
- Money Morning:
Playing Follow the Guru Can Be Fun—and Profitable for Investors
- The New York Times:
Berkshire Bets Again on Newspapers With Media General
- Bloomberg News:
Berkshire Takes GM Stake as Buffett Deputies Buy Stocks
Big Investors Reveal Holdings; What are Buffett, Loeb and Others Buying?