The Oracle of Omaha made big moves in the third 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 peek behind the curtain of some of the world’s largest and most successful hedge funds and asset managers. One of the most anticipated quarterly filings comes from Buffett and his $684 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 third quarter.
Bought: Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
The biggest surprise of Berkshire’s third-quarter 13F filing was semiconductor foundry Taiwan Semiconductor. Prior to Berkshire’s filing on Nov. 14, Taiwan Semiconductor shares were down 39.5% year to date amid a weak global semiconductor market. Semi stock investor sentiment took a hit in October, when the U.S. Department of Commerce announced new restrictions on advanced chip sales to China. Buffett seems to see the geopolitical uncertainty as a buying opportunity. Berkshire took a brand new stake in TSM in the third quarter, accumulating more than 60 million shares worth about $4.1 billion. Taiwan Semiconductor is now one of Berkshire’s 10 largest public stock holdings.
Bought: Occidental Petroleum Corp. (OXY)
Occidental Petroleum is one of the largest U.S. oil and gas companies, and oil and gas stocks have been top market performers in 2022. Buffett has held a stake in Occidental since Berkshire helped bankroll Occidental’s $38 billion acquisition of Anadarko Petroleum back in 2019. The latest 13F filing this week revealed Berkshire’s stake in Occidental has grown to more than 194.4 million shares worth about $11.9 billion, making OXY stock Buffett’s sixth-largest stock holding. Berkshire also holds 83.9 million warrants that can be redeemed for Occidental common stock at a price of $59.62 per share.
Sold: U.S. Bancorp (USB)
Buffett has a long history of big bets on bank stocks. In the first quarter of 2022, Berkshire finally sold off its last remaining shares of Wells Fargo & Co. (WFC) after more than 20 years of holding the stock, leaving U.S. Bancorp as Berkshire’s longest-running bank stock holding. Buffett first invested in U.S. Bancorp back in 2006, but he trimmed his stake by 31% in the third quarter. U.S. Bancorp is a classic Buffett value investment, trading at a forward earnings multiple of just 8.7. Berkshire still holds more than 53 million shares worth more than $2.2 billion.
Sold: Activision Blizzard Inc. (ATVI)
In January, Microsoft Corp. (MSFT) announced a $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 deal was announced. With Activision shares still well below their $95 buyout price, Berkshire sold more than 8.2 million shares in the third quarter, dialing back Buffett’s merger arbitrage bet. Berkshire now holds 60.1 million shares of ATVI stock worth about $4.5 billion.
Bought: Chevron Corp. (CVX)
Buffett first invested in U.S. oil major Chevron in the fourth quarter of 2020. Since that time, the oil industry has 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 sent crude oil prices soaring to 13-year highs in 2022. In response, Buffett added to his Chevron investment in the first and second quarters and bought more than 3.9 million shares in the third quarter, bringing his total stake up to 165.4 million shares worth about $23.8 billion.
Sold: Bank of New York Mellon Corp. (BK)
Bank of New York Mellon is a trust bank, which means it has a unique business model that includes managing cash for large investment funds, providing day-to-day funding for large corporations and serving as a fixed-income clearing firm. Instead of taking on credit risk by lending aggressively, the bank generates much of its income from transaction fees. Buffett first invested in BK stock back in the third quarter of 2010, but he reduced his stake by about 14% in the third quarter. Even after selling, Berkshire still holds about 62.2 million shares worth roughly $2.4 billion.
Bought: Louisiana-Pacific Corp. (LPX)
Louisiana-Pacific is a forest products company that produces oriented strand board, siding and other engineered wood products. The company is highly exposed to the U.S. housing market, which has slowed significantly as interest rates have risen in 2022. Buffett may see the stock as a play on an eventual rebound in the housing market, and it is attractively valued at just 13 times forward earnings. Louisiana-Pacific was another brand new investment for Buffett in the third quarter. Berkshire accumulated about 5.8 million shares of LPX stock in the quarter, a roughly $296.7 million investment.
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 is another typical Buffett value investment, trading at just 14.5 times forward earnings and 0.4 times sales. Berkshire increased its stake in Paramount by 16% in the third quarter to more than 91.2 million shares worth about $1.7 billion. Berkshire now owns about 13% of Paramount, making the firm Paramount’s largest shareholder.
Sold: Store Capital Corp. (STOR)
Store Capital is a net-lease real estate investment trust that owns single-tenant real estate properties. Unfortunately, a large portion of Store’s rental income comes from restaurants, health clubs, movie theaters and other businesses that were severely affected by the pandemic. As a result, the stock has generated a negative total return of 2.2% since the beginning of 2020. Since Buffett first invested in Store in 2017, its total return is roughly in line with the overall S&P 500. Berkshire sold all of its roughly 6.9 million remaining shares of STOR stock in the third quarter.
Bought: Jefferies Financial Group Inc. (JEF)
Jefferies Financial is a diversified banking, financial services and asset management company and was the only financial sector stock Buffett was buying in the third quarter. After an investment banking boom in 2021, Jefferies shares have held up well in a difficult environment for investment banks in 2022, declining just 2.9% this year as of Nov. 15. Buffett purchased a brand new stake of 433,558 shares of JEF stock in the third quarter, a relatively modest $12.8 million investment by Berkshire standards. However, investors shouldn’t be surprised if Buffett adds to his Jefferies investment in the fourth quarter and beyond.
10 stocks Warren Buffett just bought and sold:
— Bought: Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
— Bought: Occidental Petroleum Corp. (OXY)
— Sold: U.S. Bancorp (USB)
— Sold: Activision Blizzard Inc. (ATVI)
— Bought: Chevron Corp. (CVX)
— Sold: Bank of New York Mellon Corp. (BK)
— Bought: Louisiana-Pacific Corp. (LPX)
— Bought: Paramount Global (PARA)
— Sold: Store Capital Corp. (STOR)
— Bought: Jefferies Financial Group Inc. (JEF)
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10 Stocks Warren Buffett Just Bought and Sold originally appeared on usnews.com
Update 11/16/22: This story was previously published at an earlier date and has been updated with new information.
