Unsurprisingly, given the slump on Wall Street in the June quarter, the value of Berkshire Hathaway’s huge investment portfolio also plunged but that didn’t stop Warren Buffett and his two fund managers from buying more shares than they sold in the three months.
Shares in mid-level US oil group Occidental Petroleum were the obvious target for Berkshire in the quarter and into the current third quarter with the direct stake now topping 20%.
Berkshire topped up even though other shares in its portfolio were weakening with the general slide in prices in the quarter.
The 13F fund managers filing with the US Securities and Exchange Commission for the June quarter shows the slide in the value of the Berkshire portfolio to just over $US300 billion, down more than 15% from the record $US363.55 billion at March 31.
It was the lowest since September 30, 2021 when the value was just over $US293 billion.
The number of holdings at June 30 was 47, down from 49 at the end of March.
Since June 30, the value would have risen sharply given that the S&P 500 index was up more than 14% from the close on June 30 to the close of trading Thursday. That would put the value of the Berkshire Hathaway portfolio around $US340 billion.
Besides buying more Occidental Petroleum shares, Berkshire added to its Apple holdings, buying another 3.9 million shares in the June quarter after the $US600 million purchase in the three months to March.
The biggest buys were the Occidental Petroleum purchases, which have continued after June 30, while Berkshire again topped up its holding on Chevron by buying another 2.262 million shares in the three months to June.
The Berkshire stake in Chevron is now worth more than $US23 billion and appears to be a new ‘core’ holding in the portfolio along with Apple, Coca Cola, Amex and Bank of America.
Berkshire Hathaway said it had also more than tripled its stake in the online banking company Ally Financial, while selling holdings in Verizon Communications and Royalty Pharma, which buys drug royalties.
Berkshire now holds 30 million Ally shares worth $US1 billion at the end of June. That makes Buffett’s investment group one of the lender’s largest shareholders, with a 9.7% stake.
Berkshire built the first part of its stake in Ally in the first quarter, when it bought just under 9 million shares.
In the first quarter, Berkshire bet on Citigroup with an investment worth $US2.9 billion
It also bought 4 million more shares in Activision Blizzard in the June quarter as well as adding 9.4 million Paramount shares (a jump of more than 13%).
It also reduced its holdings in General Motors and supermarkets chain Kroger.
The sell-off did see Berkshire slow its trading in the second quarter as markets fell, buying $US6.2 billion of stocks and selling $US2.3 billion.
That was well down on purchases of $US51.1 billion (notably shares in Chevron and Occidental) and sales of $US9.7 billion in the first quarter.
Since June 30, Warren Buffett loaded up on more shares in Occidental Petroleum, increasing its position to 20.2%.
In a filing with the US Securities and Exchange Commission Berkshire said it paid about $US391 million for nearly 6.7 million Occidental shares between August 4 and August 8.
The purchases now give Berkshire 188.4 million Occidental shares, worth $US11.3 billion.
A 20% stake would let Berkshire report its proportionate share of Houston-based Occidental’s earnings with operating results, through equity accounting.
Berkshire has not revealed if it will do that and has contended that its investment in Occidental is passive.
Buffett’s company also owns $US10 billion worth of Occidental preferred stock, which helped finance the $US37 billion 2019 purchase of Anadarko Petroleum, and has warrants to buy another 83.9 million common shares for $US5 billion.
Berkshire equity accounts its 26.6% stake in Kraft Heinz Co and its 38.6% in vehicle stop operator Pilot Travel Centers, where its stake is expected to grow to 80% next year.
All up, Apple still dominates the Berkshire portfolio with a 40% share. Bank of America is next with a 10.48% share, then Coca Cola with an 8.38% stake, Chevron with 7.79% and American Express with 7%. Chevron has effectively filled the spot in the top five holdings that Well Fargo used to hold.
