With the COVID-19 pandemic dominating markets, politics, and everyday life, it’s no wonder that Warren Buffett has moved heavily into pharma and medical stocks in the quarterly latest fund manager filing with the US Securities and Exchange Commission.
The report is for the three months to September 30 (it is filed and released 45 days after the end of the quarter), so some of these new investments could be five months or more old and at lower share prices.
According to Berkshire Hathaway’s third quarter earnings report released earlier this month, Buffett poured $US4.8 billion into stocks, excluding the $US billion or more in buybacks.
That marked a reversal from second quarter’s $US13 billion in stock sales, the biggest in more than a decade, as he exited all his airline stocks, including Delta , American, United and Southwest.
To balance the portfolio, Berkshire sold millions of Apple shares in the quarter, while dramatically cutting its longtime JPMorgan Chase investment.
The September quarter filing shows Berkshire bought bought 21.3 million shares of drugmaker Abbie, 22.4 millions of Merck, another big pharma group, 3.7 million shares of Pfizer (which are up sharply after its successful vaccine news) and 29.97 million shares in Bristol Myer Squibb.
Berkshire also picked up 2.4 million shares of mobile phone operator, T-Mobile in the quarter. 6.13 million shares of Snowflake, a cloud computing float, was picked up in the issue before the later IPO.
The company’s holding in big box retailer, Costco was sold and besides the cut to the stake in JPMorgan, Berkshire also sold off shares in Wells Fargo (again), PNC Financial and M&T Bank.
But Berkshire has again boosted its stake in Bank of America – to more than 1 billion shares by September 30.
Early in Q3, Berkshire soaked u shares, in the bank eventually plowing more than $US2 billion into the No. 2 stock in its portfolio.
Starting July 20, Berkshire’s stake in the banking giant rose to more than 1 billion shares, up from 925 million shares at the end of June.
But the eye catching sale was 26 million Apple shares or 3.7% of Berkshire’s holding (the sale was hinted at in the Berkshire quarterly report in early November).
Analysts said that was around $US4.17 billion and suggests very strongly that the current stake in Apple is a maximum and that the shares are the most fungible for Buffett to help fund other investments without committing too much new capital.
The move into pharma is yet another dramatic move by the world’s most watched investor. His Apple play since 2016 has dominated investor attention, but in the same time he has quit media stocks, build up banks, but sold down Well Fargo.
Berkshire has also moved heavily into the heart of Japan Inc with billions invested in the shares of the country’s five top trading houses, bought back billions of dollars worth of shares – over $US9 billion with in the September quarter and more than $US18 billion worth so far this year (including around $US2.4 billion in October alone).
Berkshire shares are the biggest single investment so far this year.
No more gold stocks, as Buffett did in the second quarter with more than 21 million shares of Barrick, then valued at $US563 million.
