Every quarter, institutional investment managers who control more than $100 million in assets are required to submit reports called 13-F filings with the SEC. No 13-F filings in the world are watched more closely than those that Warren Buffett submits on behalf of his investment firm Berkshire Hathaway.
He is, after all, the Oracle of Omaha, and as one of the most successful investors in history, Wall Street movers and shakers and regular people alike naturally want to know which stocks he’s buying and selling. It’s not at all uncommon for stocks to get a bump when Buffett buys a big stake in the company or to suffer a dip when he sells — and he sure did a lot of buying and selling in 2021.
Bank of America (BOA)
The Oracle of Omaha showed his skill with a major buy-in to BOA this summer. Berkshire Hathaway spent 12 days in late July through early August scooping up $2.1 billion worth of shares at prices ranging from $23.75 to $25.25, according to Motley Fool.
BOA was trading at $43.84 as of Dec 1.
Buffett bet that the financial giant’s status as one of the most asset-sensitive banks in the industry would position it to benefit from rising interest rates. The gamble paid off. Bank of America has outperformed Wells Fargo, Citigroup and JPMorgan Chase.
Wells Fargo (WFC)
While Buffett was bullish on BOA, his selloff of other financial stocks — which had left so many investors baffled in 2020 — continued into the first quarter of 2021. Among the victims most thoroughly sliced and diced by Buffett’s red pen was Wells Fargo, which Buffett winnowed down from 52,423,867 shares to just 675,054.
The culling represented a 98.71 reduction in Berkshire Hathaway’s investment in Wells Fargo. At one point, according to the AP, Buffett’s company owned a full 10% of the big bank before the selloff began.
Merck & Co. (MRK)
Warren Buffett sold 100% of Berkshire Hathaway’s remaining 9,157,192 shares of Merck in the third quarter, according to the company’s 13-F filing. Seeking Alpha reports that Buffett bought Merck in the third quarter of 2020 as vaccines were the talk of the investing world. The selloff was part of a larger shuffling of Buffett’s drug holdings, which took place throughout 2021.
Buffett also reduced Berkshire’s stake in drugmakers AbbVie and Bristol-Myers Squibb while eliminating 100% of his small position in a Merck spinoff called Organon & Co., which deals in contraception and other women’s health products.
Royalty Pharma PRC (RPRX)
While Buffett was distancing Berkshire Hathaway’s portfolio from drugmakers, he bought 13,145,902 shares of a company called Royalty Pharma for a little more for $475 million. Unlike the more familiar pharmaceutical companies, Royalty doesn’t develop or manufacture drugs, but instead makes money by funding late-stage studies in exchange for future royalties.
According to Investor’s Business Daily, Royalty Pharma conducted $2.8 billion in partnership transactions this year alone.
In the first quarter of 2021, Buffett cut a recent investment in Chevron in half — Berkshire Hathaway had purchased $4.1 billion of Chevron stock just three months earlier. The relationship soured, however, and Buffett decided to thin his 48,498,965 shares in the energy giant to 23,672,271 for a total reduction of 51.19%.
If it was hard for laypeople to understand Buffett’s wisdom on this one — Chevron shares are up more than 32% on the year — they shouldn’t underestimate Oracle so quickly. In Q3, Buffett reinvested in Chevron by more than 24% to bring his share count back up to 28,703,519.
General Motors (GM)
When it comes to investing in GM, Buffett likes nice, round numbers. Berkshire Hathaway had owned an even 67 million shares of the Big Three automaker, but in Q2, Buffett parted with exactly 7 million shares to leave exactly 60 million intact. The move reduced Buffett’s GM holdings by 10.45%.
It wasn’t the first time GM fell under Buffett’s sword. Berkshire has invested in GM for nine years, according to The Street, but in recent quarters, Buffett has been consistently reducing his holdings.
Marsh & McLennan Companies Inc. (MMC)
Buffett might have been either sweet or sour on professional services company Marsh & McLennan depending on when in the year you talked to him. In February, Buffett disclosed a stake in the company worth just shy of a half-billion dollars.
Marsh performed well, according to Insurance Insider, and in May, Buffett bought another 1.8 million shares to bring his total holdings to 5.2 million shares worth about $711 million. But by summer, Buffett began unloading.
In August, he sold about 1 million shares — 20.63% of his stake — leaving him with about 4.2 million shares — 4,196,692, to be exact — worth about $644 million. In Q3, he culled another one-third of his holdings, leaving only 2.74 million shares remaining.
Liberty Global PLC (LBTYA)
Liberty Global is a multinational telecom with a footprint in America and across Europe, and Buffett loved it — until he didn’t. In the first quarter, when Liberty was trading at $25.66, Buffett began an 81.34% reduction, taking his portfolio from 18.01 million shares to just 3,359,831 shares.
In the second quarter, Buffett dropped another 44.15% of Berkshire Hathaway’s stake in Liberty, bringing his share count down to 1,876,522. In Q3, Buffett had had enough and offloaded 100% of his remaining shares.
In February, Buffett’s 13-F revealed a massive investment worth nearly $9 billion in Verizon, whose share price soared on news of the purchase — and what a purchase it was. The move increased Berkshire’s Verizon holdings by more than 150%, taking it from 58,347,767 shares to 146,716,496.
In the first quarter of 2021, Buffett doubled down, upping his stake by 8.25% to 158,824,575 shares. So far, Buffett seems content with his investment as he has neither bought nor sold Verizon shares since Q1.
Charter Communications (CHTR)
Charter is one of the biggest cable and broadband providers in America, boasting 32 million customers. It had a banner year, growing revenue by more than 9% — and Buffett was along for the ride. Berkshire was invested in Charter to the tune of 5,213,461 shares worth $3.22 billion in the first quarter.
Buffett wisely held that position throughout quarters one and two, but by Q3, the Oracle was ready to put Charter on a diet. Although by that time Charter was one of his top 10 holdings, Buffett sold nearly 20% of his stake, taking his Charter holdings down to 4,200,626 shares.
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