Some banks bad, one bank good, gold the new fascination for Warren Buffett’s Berkshire Hathaway in the three months to June 30.
Berkshire’s quarterly fund managers 13F filing with the US Securities and Exchange Commission on Friday reveals that for the first time ever, Buffett’s fund managers have gone heavily into shares in a gold miner.
Friday’s filing revealed that Berkshire acquired 20.9 million shares of Barrick Gold worth $US563 million (representing 0.3% of Berkshire’s huge $US200 billion-plus portfolio) in the three months to June.
Shares of the gold exploration company were last trading up about 3% near $US27.76 per share in the after-hours session on Friday, kicking higher on the Buffett buying news after closing the regular session at $US26.99.
Mining stocks are a sector that Buffett and his managers have rarely dipped into – they have owned oil and gas stocks (Berkshire owns a major US power utility so there’s a sort of inbuilt hedge in those holdings) but Buffett’s firm trades in and out of these stocks – for instance it the June quarter saw it sell all 18.9 million Occidental shares it had owned at the end of the first quarter.
While the gold play took the attention because of the recent bubble-like surge in world gold prices to a series of all-time highs (and then a bit of a sell-off last week), the most interesting move by Berkshire was in the restructuring of its considerable holdings in financial stocks, led by banks.
Berkshire sold more Well Fargo, this time around a quarter of its smaller stake. As well it sold much of its stake in JPMorgan – around 61% in the quarter.
Berkshire sold 85.6 million shares of Wells Fargo, representing about 26% of its stake and cutting its ownership to about 3% from 5.3%.
The company also sold 35.5 million shares of JPMorgan, 61% of its position, which now represents 1% of Berkshire’s overall portfolio down from 3% at the end of March.
Berkshire also reduced its holding in PNC Financial Services selling 3.85 million shares to cut its position to 0.3% from 0.5%.
In May, Berkshire Hathaway disclosed that it cut its in Goldman, but by the end of June, it had exited the financial giant completely, getting rid of the final 1.9 million shares.
But offsetting these sales Berkshire loaded up on Bank of America shares in July and August, buying around $US2.1 billion of shares in America’s second-largest bank to give it control of 11.9% of the bank.
It is now one of Buffett’s ‘pillar’ stocks that the rest of the portfolio is built around. The others are Coca Cola, Amex, and Apple.
And speaking of Apple, Berkshire didn’t change its holdings iPhone giant, where the firm owns at 245.156 million shares. That stake was worth more than $US112 billion at Friday’s close of $US459.63.
Berkshire also sold all 18.9 million Occidental shares it had owned at the end of the first quarter.
It also bought 3 million more shares in supermarkets giant, Kroger shares in the second quarter, lifting its investment in the retailer to 21.9 million shares. Kroger shares rose 2.3% in regular trading on Friday to close at $US35.39 and then kicked another 1.1% higher to $US35.80.
At Friday’s close, the Kroger holding was worth more than $US775 million – a more valuable holding than the Barrick stake.
