The Oracle of Omaha went on a buying spree in the first quarter.
What stocks has Warren Buffett bought and sold lately? Each quarter, all fund managers with at least $100 million in assets must publicly disclose their stock holdings to the U.S. Securities and Exchange Commission via form 13F, giving investors a rare peek behind the curtain of some of the world’s largest and most successful hedge funds. One of the most anticipated quarterly filings comes from Buffett and his $683 billion company Berkshire Hathaway Inc. (ticker: BRK.A, BRK.B). Here’s a look at 10 of the biggest changes the Oracle of Omaha made to Berkshire’s portfolio in the first quarter.
Bought: Chevron Corp. (CVX)
Buffett first invested in U.S. oil major Chevron in the fourth quarter of 2020. Since then, the oil industry and Buffett’s Chevron stake have been on a roller coaster ride. Buffett reduced his Chevron holdings in the first and second quarters of 2021, but a global energy crisis and Russia’s invasion of Ukraine have sent crude oil prices soaring to 13-year highs. In response, Buffett more than tripled his stake in Chevron in the first quarter, buying 120.9 million shares. Chevron is now Berkshire’s fourth-largest stock holding, and Buffett’s stake is worth about $25.9 billion.
Bought: Occidental Petroleum Corp. (OXY)
Occidental Petroleum is one of the largest U.S. oil and gas companies. On March 4, a new filing from Berkshire Hathaway revealed that the company owned 91.2 million shares of Occidental, up from about 29.8 million shares previously. Berkshire also holds 83.9 million warrants that can be redeemed for Occidental common stock at a price of $59.62 per share. The latest 13F filing this week revealed Berkshire’s stake in Occidental has more than doubled to 220.2 million shares worth about $12.1 billion, making OXY stock Buffett’s fifth-largest stock holding.
Sold: Verizon Communications Inc. (VZ)
One of the most surprising Berkshire 13F disclosures was Buffett dumping more than 99% of his stake in telecom giant Verizon Communications. Buffett first invested in Verizon in the fourth quarter of 2020 and amassed a stake worth more than $8 billion by the end of 2020. Verizon seems like a typical Buffett value investment, trading at 8.8 times forward earnings and paying a 5.2% dividend. However, Buffett aggressively reversed course in the first quarter, selling 157.4 million VZ shares and bringing his remaining stake down to only about 1.4 million shares worth about $70.3 million.
Bought: Activision Blizzard Inc. (ATVI)
In January, Microsoft Corp. (MSFT) announced a planned $68.7 billion buyout deal for video game publisher Activision Blizzard at a price of $95 per share. At the time, Berkshire investors had no idea Buffett’s company had purchased nearly $1 billion of Activision Blizzard shares at an average price of about $77 just weeks before the proposed deal was announced. With Activision shares still trading well below their $95 buyout price, Berkshire added 49.7 million shares in the first quarter, potentially as a merger arbitrage bet. Berkshire now holds 64.3 million shares of ATVI stock worth about $5.2 billion.
Bought: Citigroup Inc. (C)
Buffett has a long history of big bets on bank stocks. In the first quarter, Berkshire finally sold off its last remaining shares of Wells Fargo & Co. (WFC) after more than 20 years holding the stock. In the same quarter, Buffett took a brand-new 55.2 million-share stake in U.S. megabank Citigroup worth about $2.9 billion. Of Buffett’s several new holdings disclosed in Berkshire’s 13F filing, the Citigroup stake is the largest. Citigroup is a classic Buffett investment — a bank stock trading at just 0.5 times book value and 6.6 times forward earnings.
Bought: Paramount Global (PARA)
Paramount Global is a global entertainment company formed from the merger of Viacom and CBS in 2019. The company owns Paramount Pictures TV and movie studios; TV networks such as CBS and Comedy Central; and streaming platforms Paramount+, Showtime OTT and Pluto TV. Paramount seems like another typical Buffett value investment. The stock trades at just 0.8 times book value, 13.3 times forward earnings and 0.6 times sales. Berkshire disclosed a fresh 68.9 million-share stake in Paramount worth about $2.6 billion. Berkshire now owns 11.3% of Paramount, making the firm one of Paramount’s largest shareholders.
Bought: Celanese Corp. (CE)
Celanese is an industrial chemical producer. In April, the company reported record first-quarter sales and earnings that beat consensus analyst estimates. Celanese also raised its full-year guidance. Celanese is Berkshire’s only stock holding in the materials sector, which helps diversify the firm’s portfolio. Buffett is likely also a fan of the company’s capital returns, including its 1.9% dividend. Celanese has also raised its dividend for 14 consecutive years, a testament to the consistency of its business. Buffett’s new 7.9 million-share stake in CE stock is worth about $1.1 billion, giving Berkshire a 7.3% ownership stake.
Bought: McKesson Corp. (MCK)
McKesson is one of the largest distributors of pharmaceuticals and medical-surgical supplies in the U.S. Buffett has been active in the health care sector since the beginning of the pandemic, initially taking large stakes in companies such as AbbVie Inc. (ABBV), Bristol-Myers Squibb Co. (BMY), Pfizer Inc. (PFE) and Merck & Co. Inc. (MRK) before dialing back and eliminating most of those positions. McKesson has performed well so far in a difficult market in 2022, gaining more than 30% this year. Buffett bought more than 2.9 million shares of MCK stock in the first quarter, making his new stake in the company worth about $895 million.
Bought: Markel Corp. (MKL)
Markel underwrites a wide variety of specialty insurance policies. Buffett has always loved the insurance business, and Berkshire has its own sizable core insurance operation. Buffett took a relatively modest stake of around 420,000 shares of Markel worth about $620 million in the first quarter. However, Buffett followers know he has a history of building massive stakes slowly over time. His 420,000 shares of Markel are already enough to give Berkshire a nearly 3.1% ownership stake in the insurance company. Markel shares are up so far this year, and Buffett’s buying may keep that bullish momentum going.
Bought: Ally Financial Inc. (ALLY)
Ally Financial is a financial holding company that specializes in auto financing and mortgage lending. Ally shares are down more than 20% in the past year, as supply shortages have hit the auto market and rising mortgage rates have weighed on the housing market. Buffett appears to see Ally’s weakness as a buying opportunity. Ally’s online banking business may benefit from rising interest rates, which helped push Ally’s net interest margins higher by 0.77% to 3.93% in the first quarter. Buffett took a new stake in Ally of more than 8.9 million shares worth about $390 million.
10 stocks Warren Buffett just bought and sold:
— Bought: Chevron Corp. (CVX)
— Bought: Occidental Petroleum Corp. (OXY)
— Sold: Verizon Communications Inc. (VZ)
— Bought: Activision Blizzard Inc. (ATVI)
— Bought: Citigroup Inc. (C)
— Bought: Paramount Global (PARA)
— Bought: Celanese Corp. (CE)
— Bought: McKesson Corp. (MCK)
— Bought: Markel Corp. (MKL)
— Bought: Ally Financial Inc. (ALLY)
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10 Stocks Warren Buffett Just Bought and Sold originally appeared on usnews.com
Update 05/17/22: This story was published at an earlier date and has been updated with new information.
