Four times a year, holding companies of a certain size are required to divulge their positions in equities. That’s a great thing for followers of Warren Buffett, widely considered the greatest long-term investor of all time. His company, Berkshire Hathaway Inc. (ticker: BRK.B, BRK.A), which he still helms at age 91, owns a sprawling equities portfolio that directly reflects what stocks Buffett likes.
Although investors don’t have an up-to-the-minute reflection of what Berkshire owns, the company’s mid-May 13F filing with the U.S. Securities and Exchange Commission reveals the complete Berkshire Hathaway portfolio as it stood at the end of March.
Why Follow Berkshire Hathaway Stock Picks?
There’s a reason Berkshire Hathaway’s annual shareholder meeting is considered such a Wall Street occasion. Before the pandemic, about 40,000 people would flock to the humble town of Omaha, Nebraska, just to hear sage wisdom from the elderly duo of Buffett and Berkshire Vice Chairman Charlie Munger, now 98.
Part of the reason is that the two share an easy rapport with each other, and each is witty and entertaining in his own way. But tens of thousands of people weren’t making the trek to Nebraska to see an Abbott and Costello routine.
People closely watch the Berkshire Hathaway portfolio for a simple reason: The long-term track record of Berkshire Hathaway is absolutely unparalleled. In the 57 calendar years from 1965 to 2021, Berkshire Hathaway stock appreciated at a 20.1% compound annualized rate, compared with a 10.5% annualized return for the S&P 500. To illustrate the power of compounding, that amounted to a 3,641,613% return for Berkshire shareholders compared with a 30,209% return for investors in the S&P 500.
For every $10,000 invested in Berkshire in 1965, investors would have $364.17 million by the end of 2021. S&P 500 investors would have $3.03 million. Returns like that simply can’t be generated by a lucky hand.
What Stocks Is Berkshire Buying and Selling?
Buffett’s extreme long-term bias is part of what makes him an excellent investor — it’s an edge few other investors have the patience or temperament for. When Berkshire agreed in 2015 to make its largest-ever acquisition, paying $32.1 billion for total ownership of industrial giant Precision Castparts Corp., Buffett brushed off concerns over the bear market in energy prices at the time as myopic, telling CNBC, “We’re going to be in this business for 100 years.”
Another famous nugget of wisdom from Buffett is his quip that his favorite holding period is “forever.”
All that’s to say that when Berkshire makes changes to its portfolio, it tends to carry weight.
There were six additions to Berkshire Hathaway’s stock holdings in the first quarter of 2022 — a sixfold increase from the same period a year before. Here are those new holdings, from the smallest to largest weightings at the end of the quarter:
Ally Financial Inc. (ALLY). A famous fan of the financial sector, Berkshire acquired nearly $400 million worth of digital financial services company Ally in the first quarter. The stock pays a 3.1% dividend.
Markel Corp. (MKL). From the same sector, Berkshire snapped up over $600 million worth of specialty insurer Markel, adding to its large insurance industry exposure.
McKesson Corp. (MCK). Health care services company McKesson was another Berkshire addition in the first quarter of 2022, which fits with Buffett’s preference for companies with strong competitive advantages. Along with Cardinal Health Inc. (CAH) and AmerisourceBergen Corp. (ABC), McKesson enjoys an oligopoly over the pharmaceutical distribution market. Berkshire acquired about $900 million in shares in the first quarter.
Celanese Corp. (CE). A bit of a lesser-known name, Celanese is a chemicals company in the business of polymers and other starting materials for paints, coatings and other materials. Berkshire took a $1.1 billion position in Celanese.
Paramount Global (PARA). Berkshire snapped up $2.6 billion in media and entertainment giant Paramount Global, formerly ViacomCBS, in the first quarter. At 11 times forward earnings, PARA is a value stock, and it pays a 3% dividend.
Citigroup Inc. (C). The largest new position Berkshire took in the first quarter was in large U.S. bank Citigroup, pumping nearly $3 billion into the massive bank. A fan of productive assets, Buffett was likely lured by Citigroup’s 4.1% dividend and price-book ratio below 0.6.
The financial holding company was also active on the selling side of the ledger. Here are the five stock holdings Berkshire decreased by 80% or more in the first quarter:
AbbVie Inc. (ABBV); sold 100% of its stake. Buffett’s financial conglomerate liquidated the more than 3 million shares in the pharmaceutical giant that it owned.
Bristol-Myers Squibb Co. (BMY); sold 100% of its stake. While Bristol-Myers Squibb is one of the largest drugmakers in the U.S., Berkshire is no longer a fan of the stock, selling off its last 5.2 million shares in the first quarter.
Wells Fargo & Co. (WFC); sold 100% of its stake. Berkshire had been unloading its large position in megabank Wells Fargo for some time but finally sold off the last of its stake in the company in the first quarter. Wells Fargo suffered a fake-accounts scandal and subsequent regulatory repercussions that still plague the bank.
Verizon Communications Inc. (VZ); sold 99% of its stake. Although Verizon didn’t get the total elimination treatment that the preceding names did, Verizon was easily Berkshire’s biggest sell of the quarter, as the telecom giant went from 2.49% of its portfolio to just 0.02%.
Royalty Pharma PLC (RPRX); sold 82% of its stake. In keeping with Berkshire’s admiration for income streams, Royalty Pharma is a business that acquires biopharmaceutical royalties and helps smaller health care companies grow. Despite that, Berkshire was a seller of this position last quarter.
Zooming Out: Characteristics of Berkshire Hathaway Holdings
Although Berkshire Hathaway’s stock portfolio, worth more than $300 billion, comprises 53 positions, it’s not quite as diversified as you might expect for a grouping of that many stocks.
In fact, concentrated bets on companies Buffett’s highly confident in are a big part of what has made him such a fabulously successful investor over time. It’s harder to be concentrated with the massive sum of money Berkshire controls, but it’s doing a good job regardless: Its top 10 holdings make up about 85% of Berkshire’s stock portfolio. And its single largest position, Apple Inc. (AAPL), makes up about 38% of its portfolio.
In terms of sectors, the huge bet on Apple means information technology is the most heavily represented sector, constituting about 46% of the portfolio as of March 31. Financial companies accounted for 27% of the portfolio, while consumer staples were the last to crack double digits at 11%.
Here’s a look at the complete Berkshire Hathaway portfolio as of the company’s first-quarter filing. The Activision Blizzard Inc. (ATVI) stake is an estimate based on Buffett’s comment during the shareholder meeting that Berkshire owned a 9.5% stake in the video game stock. Values are as of May 20, 2022:
|Activision Blizzard Inc. (ATVI)||74,187,400||$5,742,104,760|
|Ally Financial Inc. (ALLY)||8,969,420||$346,847,471|
|Amazon.com Inc. (AMZN)||533,300||$1,147,565,606|
|American Express Co. (AXP)||151,610,700||$23,232,823,668|
|Aon PLC (AON)||4,396,000||$1,154,873,160|
|Apple Inc. (AAPL)||911,347,617||$125,392,318,623|
|Bank of America Corp. (BAC)||1,032,852,006||$34,972,368,923|
|Bank of New York Mellon Corp. (BK)||74,346,864||$3,254,162,237|
|BYD Co. Ltd. (BYDDF)||225,000,000||$7,499,250,000|
|Celanese Corp. (CE)||7,880,998||$1,187,902,829|
|Charter Communications Inc. (CHTR)||3,828,941||$1,834,177,607|
|Chevron Corp. (CVX)||159,178,117||$26,713,271,595|
|Citigroup Inc. (C)||52,244,797||$2,748,428,651|
|Coca-Cola Co. (KO)||400,000,000||$24,392,000,000|
|DaVita Inc. (DVA)||36,095,570||$3,408,504,675|
|Diageo PLC (DEO)||227,750||$41,511,993|
|Floor & Decor Holdings Inc. (FND)||4,780,000||$328,051,400|
|General Motors Co. (GM)||62,045,847||$2,196,422,984|
|Globe Life Inc. (GL)||6,353,727||$594,454,698|
|HP Inc. (HPQ)||121,092,418||$4,195,852,284|
|Itochu Corp. (ITOCF)||81,304,200||$2,309,039,280|
|Johnson & Johnson (JNJ)||327,100||$57,890,158|
|Kraft Heinz Co. (KHC)||325,634,818||$12,494,607,967|
|Kroger Co. (KR)||57,985,263||$2,821,562,898|
|Liberty Latin America Ltd. Class A (LILA)||2,630,792||$24,361,134|
|Liberty Latin America Ltd. Class C (LILAK)||1,284,020||$11,812,984|
|Liberty Media Formula One Series C (FWONK)||7,722,451||$481,803,718|
|Liberty Sirius XM Group Series A (LSXMA)||20,207,680||$812,146,659|
|Liberty Sirius XM Group Series C (LSXMK)||43,208,291||$1,729,627,889|
|Markel Corp. (MKL)||424,343||$565,683,166|
|Marsh & McLennan Cos. Inc. (MMC)||404,911||$60,675,913|
|Mastercard Inc (MA)||3,986,648||$1,340,231,325|
|McKesson Corp. (MCK)||2,921,975||$943,388,849|
|Mondelez International Inc. (MDLZ)||578,000||$35,367,820|
|Moody’s Corp. (MCO)||24,669,778||$7,136,226,682|
|Nu Holdings Ltd. (NU)||107,118,784||$408,122,567|
|Occidental Petroleum Corp. (OXY)||143,162,392||$9,056,452,918|
|Paramount Global Class B (PARA)||68,947,760||$2,250,454,886|
|Procter & Gamble Co. (PG)||315,400||$44,720,566|
|Royalty Pharma PLC (RPRX)||1,496,372||$59,136,621|
|Snowflake Inc. (SNOW)||6,125,376||$866,679,450|
|SPDR S&P 500 ETF Trust (SPY)||39,400||$15,351,422|
|StoneCo Ltd. (STNE)||10,695,448||$99,788,530|
|Store Capital Corp. (STOR)||14,754,811||$385,248,115|
|T-Mobile Us Inc. (TMUS)||5,242,000||$660,701,680|
|United Parcel Service Inc. (UPS)||59,400||$ 10,159,776|
|US Bancorp. (USB)||144,046,330||$7,088,519,899|
|Vanguard 500 Index Fund ETF (VOO)||43,000||$15,394,860|
|Verisign Inc. (VRSN)||12,815,613||$2,121,752,888|
|Verizon Communications Inc. (VZ)||1,380,111||$68,356,898|
|Visa Inc. (V)||8,297,460||$1,651,443,464|
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Update 05/23/22: This story was published at an earlier date and has been updated with new information.