MITSF - Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q2 2022 Update

• Berkshire Hathaway's 13F stock portfolio value decreased from ~$364B to ~$300B.
• Their largest three holdings are at ~60% of the entire portfolio.
• Berkshire Hathaway increased Occidental Petroleum, Ally Financial and Paramount Global while decreasing STORE Capital and General Motors.

This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway’s 13F stock portfolio on a quarterly basis. It is based on Warren Buffett’s regulatory 13F Form filed on 8/15/2022. Please visit our Tracking 10 Years Of Berkshire Hathaway's Investment Portfolio article series for an idea on how his holdings have progressed over the years and our previous update for the moves in Q1 2022.

During Q2 2022, Berkshire Hathaway’s ( BRK.A ) ( BRK.B ) 13F stock portfolio value decreased ~18% from ~$364B to ~$300B. The top five positions account for ~74% of the portfolio: Apple Inc., Bank of America, Coca Cola, Chevron, and American Express. There are 45 individual stock positions many of which are minutely small compared to the overall size of the portfolio.

Warren Buffett’s writings ( pdfs ) are a treasure trove of information and are a very good source for anyone starting out on individual investing.

Note 1: In Q2 2022, Berkshire Hathaway repurchased ~3.62M Class B Equivalent Shares for a total outlay of ~$1.03B. The average price paid was ~$284. Book Value as of Q2 2022 was ~$213 per share. So, the repurchase happened at ~133% of Book Value. In July 2018, Berkshire had announced a plan to make their re-purchase criteria to be more flexible – instead of the 120% of Book Value criteria, Buffett & Munger had to agree that Berkshire was trading below intrinsic value. The Class B shares currently trade at ~$307.

Note 2: Berkshire Hathaway also has a 225M share position in BYD Company at a cost-basis of ~8 HKD per share. It currently traded in Hong Kong at ~285 HKD.

Note 3: The 2021 AR listed the following investments that are not in the 13F report – 5.6% ownership stake in ITOCHU Corporation ( ITOCF ) at a cost-basis of $23.52, 5.5% ownership stake in Mitsubishi Corporation ( MSBHF ) at a cost-basis of $25.72, and 5.7% ownership stake in Mitsui & Company ( MITSF ) at a cost-basis of $17.29. ITOCF, MSBHF, and MITSF currently trade at $27.93, $31.80, and $22.74 respectively. It was disclosed in August 2020 that Berkshire had built ~5% stakes in five Japanese trading businesses: ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo.

Note 4: Since November 2015, Warren Buffett is known to own ~8% of Seritage Growth Properties ( SRG ) at a cost-basis of $36.50 in his personal portfolio. It currently trades at $13.68. SRG is an REIT spinoff from Sears that started trading in July 2015.

New Stakes:

None.

Stake Disposals:

Verizon Communications ( VZ ) : The VZ position was built in H2 2020 at prices between $54 and $62. Last quarter saw the position almost eliminated at prices between ~$51 and ~$55. The remainder stake was disposed this quarter. The stock currently trades at $45.80.

Royalty Pharma plc ( RPRX ): RPRX stake was purchased in Q3 2021 at prices between ~$36 and ~$42. There was a roughly one-third selling in Q4 2021 at prices between ~$35 and ~$42.50. Last quarter saw the position reduced by another ~85% at prices between ~$37.50 and ~$42.50. The remainder stake was eliminated during the quarter. The stock is now at $44.35.

Stake Increases:

Apple Inc. ( AAPL ): AAPL is currently the largest 13F portfolio stake by far at ~41%. It was built between Q1 2016 and Q1 2018 at a cost-basis of ~$35 per share. Since then, the activity has been minor. The stock currently trades at ~$173.

Note: Apple stock split 4-for-1 last August. The prices quoted above are adjusted. Berkshire has a ~5.6% ownership stake in the business.

Chevron Corp ( CVX ) : CVX is a large (top five) 7.79% of the portfolio position purchased in Q3 2020 at prices between ~$72 and ~$91. Q1 2021 saw a ~50% selling at prices between ~$85 and ~$112 while in Q3 2021 there was a ~25% stake increase at prices between ~$94 and ~$106. That was followed with another one-third increase next quarter at prices between ~$102 and ~$119. Last quarter saw a whopping ~315% stake increase at prices between ~$119 and ~$171. The stock currently trades at ~$156. There was a marginal further increase this quarter.

Note: Berkshire likely avoided disclosing these stakes in the Q3 2020 13F filing by making use of the “ section 13( F ) Confidential Treatment Requests ”. An amendment filed later disclosed the activity.

Occidental Petroleum ( OXY ): Berkshire made a $10B investment in OXY in April 2019 through 100,000 preferred shares that has a liquidation value of $100,000 per share. Those shares pay 8% dividend, and the transaction came with warrants to purchase 83.86M shares at $59.62. Last quarter, Berkshire purchased ~136.4M shares at prices between ~$31 and ~$59 per share. That was followed with a ~22M share net-increase this quarter at prices between ~$57 and ~$60. The stock currently trades at $63.51.

Note: Regulatory filings since the quarter ended show them owning 188.37M shares. This is compared to 158.5M shares in the 13F report. The increased happened at prices up to ~$60.40 per share. Including warrants, Berkshire owns ~27% of the business (~272M shares).

Activision Blizzard ( ATVI ): ATVI is a 1.77% of the portfolio position established in Q4 2021 at prices between ~$57 and ~$81. Last quarter saw the stake increased by ~340% at prices between ~$63 and ~$82. This quarter also saw a ~6% further increase. The stock currently trades at $80.92.

Note: Microsoft ( MSFT ) is acquiring Activision Blizzard in a $95 per share all-cash deal announced in April.

Paramount Global ( PARA ): PARA is a 0.64% of the portfolio position purchased last quarter at prices between $27.85 and $38.48 and it is now just below the low end of that range at $27.20. There was a ~14% stake increase this quarter at prices between ~$24.25 and ~$38.

Celanese Corp ( CE ), McKesson Corp ( MCK ), Markel Corp ( MKL ), and Ally Financial ( ALLY ): These four positions were built over the last two quarters. The 0.36% CE stake was purchased at prices between ~$118 and ~$174 and the stock currently trades at the low end of that range at ~$118. MCK is a 0.20% of the portfolio position established at prices between ~$245 and ~$336 and it is now at ~$374. The 0.20% MKL stake was built at prices between ~$1187 and ~$1504 and it now goes for ~$1264. The 0.33% ALLY stake saw a whopping ~235% increase this quarter at prices between ~$32 and ~$53. The stock currently trades at $36.90.

Stake Decreases:

U.S. Bancorp ( USB ): The 1.84% USB stake has been in the portfolio since 2006. The original position was tripled during the 2007-2009 timeframe. It was then kept relatively steady till Q2 2013 when ~17M shares were purchased at prices between $32 and $36. H1 2018 had seen a ~16% increase at prices between $49 and $58 and that was followed with a ~25% increase in Q3 2018 at prices between $50 and $55. The stock is now at $49.30, and Berkshire’s cost-basis is ~$38. They control ~9.5% of the business. There was a ~5% trimming this quarter.

Kroger Company ( KR ) : KR is a 0.83% of the portfolio position established in Q4 2019 at prices between $24 and $29. The five quarters through Q3 2021 had seen a ~225% stake increase at prices between ~$30 and ~$40. The stock currently trades at $49.08. Last two quarters have seen a ~15% selling at prices between ~$43.50 and ~$62.

Note: Berkshire’s ownership stake in Kroger is ~7.2%.

General Motors ( GM ) : GM is a 0.56% of the 13F portfolio position that was first purchased in Q1 2012 at prices between $21 and $30. By Q3 2017, the position size had increased by around six-times (10M shares to 60M shares). Q4 2017 saw a reduction: ~17% selling at prices between $40.50 and $46.50. There was a ~38% stake increase in Q4 2018 at prices between $30.50 and $38.50. H1 2021 saw a ~17% selling at prices between $40.50 and $64. That was followed with a ~15% reduction this quarter at prices between ~$31.50 and ~$43. The stock currently trades at $38.99. Berkshire’s cost-basis on GM is ~$31.

STORE Capital ( STOR ): The STOR stake was established in Q2 2017 in a private placement transaction at $20.25 per share. Q2 2020 saw a ~30% stake increase at prices between $14.50 and $26.50. Last quarter saw the stake sold down by ~40% at prices between ~$28.75 and ~$34.60. That was followed with a ~55% reduction this quarter at prices between ~$25 and ~$31. The stock is now at $29.22.

Kept Steady:

Bank of America ( BAC ): Berkshire established this large (top three) ~11% of the portfolio position through the exercise of Bank of America warrants. The warrants had a strike price of $7.14 compared to the current price of $36.64. The cost to exercise was $5B and it was funded using the $5B in 6% preferred stock they held. There was a ~30% stake increase in Q3 2018 at prices between $27.75 and $31.80. Since then, the activity has been minor.

Note: Berkshire’s overall cost-basis is ~$14 and ownership stake is at ~13%.

American Express ( AXP ) and Coca-Cola ( KO ): These two very large stakes were kept steady during the last ~9 years. Buffett has said these positions will be held “permanently”. Berkshire’s cost-basis on AXP and KO are at around $8.49 and $3.25 respectively and the ownership stakes are at ~20% and ~9.2% respectively.

Kraft Heinz Co. ( KHC ): KHC is currently a fairly large position at 4.14% of the portfolio. Kraft Heinz started trading in July 2015 with Berkshire owning just over 325M shares (~27% of the business). The stake came about because of two transactions with 3G capital as partner: a ~$4B net investment in 2013 for half of Heinz and a ~$5B investment for the acquisition of Kraft Foods Group in early 2015. Berkshire’s cost-basis on KHC is ~$30 per share compared to the current price of $38.83.

Moody’s Corp. ( MCO ): MCO is a 2.24% of the 13F portfolio stake. It is a very long-term position and Buffett’s cost basis is $10.05. The stock currently trades at ~$322. Berkshire controls ~13% of the business.

Citigroup Inc. (C) and HP Inc. ( HPQ ): The 0.85% of the portfolio stake in Citigroup was purchased last quarter at prices between ~$53 and ~$68 and it is now near the low end of that range at $54.18. HPQ is a 1.14% of the portfolio stake established last quarter at prices between ~$34 and ~$40 and the stock currently trades near the low end of that range at $34.50.

Bank of New York Mellon Corp ( BK ) : BK is a ~1% of the 13F portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $19.50 and $25. Recent activity follows: 2017 saw a ~180% increase at prices between $43.50 and $55 while 2018 saw another one-third increase at prices between $44.50 and $58.50. The stock currently trades at $45.03. Berkshire’s cost-basis on BK is ~$46 per share and ownership stake is 8.3%.

DaVita Inc. ( DVA ) : DVA is a ~1% of the portfolio position that was aggressively built over several quarters in the 2012-13 timeframe at prices between $30 and $49. The stock currently trades at ~$93 compared to Berkshire’s overall cost-basis of ~$45 per share. Q3 2020 saw a ~5% (2M shares) selling at $88 per share.

Note: Berkshire’s ownership stake in DaVita is ~40%.

Liberty SiriusXM Group ( LSXMA ) ( LSXMK ): The tracking stock was acquired as a result of Liberty Media’s recapitalization in April 2016. Shareholders received 1 share of Liberty SiriusXM Group, 0.25 shares of Liberty Media Group and 0.1 shares of Liberty Braves Group for each share held. Berkshire held 30M shares of Liberty Media for which he received the same amount of Liberty SiriusXM Group shares. There was a ~40% stake increase in Q2 2017 at a cost-basis of ~$40 per share. Q2 2020 saw another ~27% stake increase primarily thru the $25.47 per share rights offering the company announced last May. Last November, Berkshire exchanged their 43.66M share stake in Sirius XM for 5.35M additional shares of Liberty Sirius XM Class A tracking stock in a transaction with the parent business. The stock currently trades at ~$45, and the stake is at 0.76% of the portfolio.

VeriSign Inc. ( VRSN ) : VRSN was first purchased in Q4 2012 at prices between $34 and $49.50. The position was more than doubled in Q1 2013 at prices between $38 and $48. The buying continued till Q2 2014 at prices up to $63. The stock currently trades at ~$204 and the position is at 0.71% of the portfolio (~10% of the business).

Charter Communications ( CHTR ): CHTR is a 0.60% of the portfolio position. It was established during the last three quarters of 2014 at prices between $118 and $170. In Q2 2015, the position was increased by ~42% at prices between $168 and $193 and that was followed with another ~21% increase the following quarter at prices between $167 and $195. The six quarters thru Q4 2018 had seen a combined ~25% selling at prices between $250 and $395 and that was followed with a ~20% reduction in Q1 2019 at prices between $285 and $366. H2 2021 saw another ~25% reduction at prices between ~$605 and ~$821. The stock currently trades at ~$483 compared to Berkshire’s cost-basis of ~$178.

Aon plc ( AON ): AON is a 0.39% of the portfolio position established in Q1 2021 at prices between ~$202 and ~$234. Next quarter saw a ~7% increase at prices between ~$230 and ~$259. The stock currently trades at ~$301.

Amazon.com ( AMZN ): AMZN is a 0.38% of the portfolio stake established in Q1 2019 at prices between ~$75 and ~$91 and increased by ~11% next quarter at prices between ~$85 and ~$98. The stock currently trades at ~$145.

Note: The prices quoted above are adjusted for the 20-for-1 stock split in June.

Snowflake Inc. ( SNOW ): SNOW had an IPO in September 2020. Shares started trading at ~$229 and currently goes for ~$167. Berkshire acquired ~2% of the business at the IPO price of ~$120 per share.

T-Mobile US ( TMUS ): TMUS is a small 0.23% of the portfolio stake purchased in Q3 2020 at prices between ~$104 and ~$119 and more than doubled next quarter at prices between ~$110 and ~$135. It currently trades at ~$147.

Liberty Media Formula One ( FWONK ): FWONK is a small 0.15% of the portfolio position built over the last two quarters at prices between ~$52 and ~$70. The stock is now at ~$70.

RH ( RH ): The 0.15% of the portfolio RH position was established in Q3 2019 at prices between $119 and $174 and increased by ~40% next quarter at prices between $165 and $242. Last quarter saw another ~20% stake increase at prices between ~$321 and ~$538. The stock currently trades at ~$329.

Note: Berkshire controls ~9% of the business.

Nu Holdings ( NU ): NU had an IPO last December. Shares started trading at ~$10 and currently goes for $5.52. Berkshire’s ~$1B stake goes back to a funding round in early 2021 when the valuation was ~$30B. Current valuation is ~$18B.

Floor & Decor Holdings ( FND ): The minutely small 0.06% of the portfolio FND position was established in Q3 2021 at prices between ~$104 and ~$131 and it is now at $99.46. Last quarter saw a ~470% stake increase at prices between ~$81 and ~$130.

StoneCo Ltd. ( STNE ) : STNE is a 0.03% position purchased in Q4 2018 at ~$21 per share. Q1 2021 saw a ~25% reduction at prices between ~$60 and ~$94. The stock is currently at $11.79.

Note: Berkshire has a 4.1% ownership stake in StoneCo. In October 2018, WSJ reported that Berkshire had invested ~$300M each in two Fintech’s – India’s Paytm and Brazil’s StoneCo. The Paytm investment was made in August 2018 while the STNE purchase was following its IPO in October 2018.

Marsh & McLennan ( MMC ) : MMC is a small 0.02% of the portfolio stake established in Q3 2020 at prices between ~$107 and ~$119. There was a ~25% stake increase in Q4 2020 at prices between ~$103 and ~$119. That was followed with a similar increase next quarter at prices between ~$108 and ~$122. Q2 2021 saw an about turn: ~20% selling at prices between ~$122 and ~$142. That was followed with a roughly one-third reduction next quarter at prices between ~$139 and ~$161. The stake was almost eliminated in Q4 2021 at prices between ~$151 and ~$174. The stock is now at ~$173.

Globe Life ( GL ), Johnson & Johnson ( JNJ ), Liberty LiLAC Group ( LILA ) ( LILAK ), Mastercard Inc. ( MA ), Mondelez International ( MDLZ ), Procter & Gamble ( PG ), SPDR S&P 500 Trust ETF ( SPY ), United Parcel Service ( UPS ), Vanguard S&P 500 ETF ( VOO ), and Visa Inc. ( V ): These small positions (less than ~1% of the portfolio each) were kept steady this quarter. Berkshire’s ownership stake in Global Life is ~6%.

The spreadsheet below highlights changes to Berkshire Hathaway’s 13F stock holdings in Q2 2022:

Source: John Vincent. Data constructed from Berkshire Hathaway’s 13F filings for Q1 2022 and Q2 2022.

For further details see: