There were a few surprises in wide-moat Berkshire Hathaway's (BRK.A)/(BRK.B) fourth-quarter 13-F filing. While we expected to see some buying activity given the sell-off in the equity markets during the period, we were surprised by the scale and the scope of the purchases. Berkshire's biggest buy involved JPMorgan Chase (JPM) , with the insurer spending an estimated $1.5 billion to increase its stake in the bank by 40%. The firm also increased its stake in PNC Financial (PNC) by 36%, acquiring another 2.2 million shares of the bank for an estimated $275 million, and made smaller additions to US Bancorp (USB), Bank of New York Mellon (BK) , and Bank of America (BAC). Berkshire increased its stake in Travelers (TRV) by 68%, picking up 2.4 million shares for an estimate $300 million, and lifted its stake in General Motors (GM) by 38%, acquiring another 19.8 million shares for an estimated $665 million.
The company made three new money purchases during the quarter, picking up 4.2 million shares of Red Hat (RHT) (for an estimated $650 million), 10.8 million shares of Suncor Energy (SU) (for an estimated $360 million), and 14.2 million shares of StoneCo (STNE), which had its initial public offering in late October (for an estimated $345 million). These purchases were offset in a large part by the elimination of Berkshire's stake in Oracle (ORCL) (netting an estimated $2.1 billion), as well as sales of shares of Wells Fargo (WFC) ($770 million), Apple (AAPL) ($555 million), Phillips 66 (PSX) ($350 million), United Continental (UAL) ($350 million), Charter Communications (CHTR) ($90 million), and Southwest Airlines (LUV) ($65 million), some of which--Wells Fargo and the airlines--were ongoing adjustments to keep Berkshire's total ownership stake below 10%. With a few exceptions-- American Express (AXP), Kraft Heinz (KHC), Moody's (MCO), DaVita (DVA), and USG (USG) (to name a few)--the insurer is looking to avoid owning 10% or more of an investee's shares, purely to limit regulatory complications, especially with bank holdings. As some of these companies buy back stock, Berkshire is forced to trim its positions.
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Greggory Warren does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.