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Stock Analyst Update

Berkshire Once Again a Net Seller of Equities in Q1

The firm raised an estimated $7.7 billion from its sales of shares.

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Wide-moat rated Berkshire Hathaway (BRK.B) has been fairly quiet about its gradual exiting of its long-held stake in Wells Fargo (WFC), having sold off another 51.7 million shares (for an estimated $1.8 billion) during the March quarter. This marked the fourth straight quarter of meaningful sales of shares of the bank, which at one time had been a prized holding--a stake CEO Warren Buffett even tried several times over the years to increase above the 10% bank ownership limit for non-bank entities. At this point, it looks like Bank of America (BAC), which has not been mired in the scandals that have plagued Wells Fargo, will be at the forefront of Berkshire's bank holdings, accounting for 14.5% of the insurer's $270.4 billion 13-F portfolio at the end of March. In just the past year, Berkshire has either winnowed down or eliminated stakes in Wells Fargo, JPMorgan Chase (JPM), PNC Financial (PNC), M&T Bank (MTB), US Bancorp (USB), and Bank of New York Mellon (BK), all while adding to its stake in Bank of America. Even so, Apple (AAPL )remains Berkshire's top holding, accounting for 40.1% of the portfolio at the end of the first quarter.

The insurer was a net seller of equities during the March quarter, raising an estimated $7.7 billion from its sales of shares of Chevron (CVX) , Wells Fargo, Merck (MRK), Synchrony Financial (SYF), Liberty Global (LBTYK), AbbVie (ABBV), Axalta (AXTA), General Motors (GM), Suncor Energy (SU), StoneCo (STNE), Bristol-Myers Squibb (BMY), US Bancorp, and Sirius XM Radio. Most of these sales were enacted on stocks that have appreciated strongly the past several quarters. In the case of Synchrony Financial and Suncor, Berkshire completely exited its stakes. As for Wells Fargo, the insurer still held close to 0.7 million shares at the end of March, but we expect that to be eliminated in the near term. Berkshire used an estimated $2.3 billion of its sales proceeds during the first quarter to put new money to work in Aon (AON), add meaningfully to stakes in Kroger (KR) and Marsh & McLennan (MMC), and increase its stakes in Verizon Communications (VZ) and Restoration Hardware.

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Greggory Warren does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.