The Oracle of Omaha went on an acquisition spree in the first quarter.
What stocks has Warren Buffett bought and sold recently? Every quarter, all fund managers with assets of at least $100 million must publicly file their holdings with the U.S. on Form 13F. SEC, giving investors a rare behind-the-scenes look at 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 (tickers: BRK.A, BRK.B). Here are the 10 biggest changes the Oracle of Omaha made to Berkshire’s portfolio in the first quarter.
Bought: Chevron Corporation (CVX)
Buffett made his first investment in U.S. oil company Chevron in the fourth quarter of 2020. Since then, the oil industry and Buffett’s stake in Chevron have been on a roller coaster ride. Buffett cut his Chevron stake in the first and second quarters of 2021. 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 public company, and Buffett’s stake is worth about $25.9 billion.
Bought: Occidental Petroleum Corporation (Oxygen)
Occidental Petroleum is one of the largest oil and gas companies in the United States. Berkshire Hathaway owns 91.2 million Occidental shares, up from about 29.8 million previously, according to a new filing from Berkshire Hathaway on March 4. Berkshire also holds exercisable warrants on 83.9 million shares of Occidental common stock at $59.62 per share. Berkshire’s stake in Occidental more than doubled to 220.2 million shares worth about $12.1 billion, making OXY stock Buffett’s fifth-largest stake, according to the latest 13F filing this week.
Sold: Verizon Communications Inc. (VZ)
One of the most surprising revelations from Berkshire’s 13F was Buffett’s divestment of more than 99% of his stake in telecom giant Verizon Communications. Buffett first invested in Verizon in the fourth quarter of 2020, raising more than $8 billion in equity by the end of 2020. Verizon appears to be the quintessential Buffett value investment, trading at 8.8 times forward earnings and paying a 5.2% dividend. However, Buffett dramatically turned things around in the first quarter, selling 157.4 million VZ shares and reducing the remaining stake to about 1.4 million shares, worth about $70.3 million.
Bought: Activision Blizzard Inc. (ATVI)
In January, Microsoft Corp. (MSFT) announced a $68.7 billion acquisition of video game publisher Activision Blizzard for $95 per share. At the time, Berkshire investors were unaware that Buffett’s company had bought nearly $1 billion worth of Activision Blizzard stock at an average price of about $77 a few weeks before announcing the proposed deal. With Activision shares still well below the $95 purchase price, Berkshire increased its holdings by 49.7 million shares in the first quarter, presumably for merger arbitrage. Berkshire currently holds 64.3 million ATVI shares, worth about $5.2 billion.
Bought: Citigroup (C)
Buffett has a long history of making big bets on bank stocks. Finally, in the first quarter, Berkshire sold its last remaining stake after holding Wells Fargo (WFC) stock for more than 20 years. During the same quarter, Buffett bought a brand new 55.2 million shares of major U.S. bank Citigroup for about $2.9 billion. Of the several new holdings Buffett disclosed in Berkshire Hathaway’s 13F filing, Citigroup is the largest. Citigroup is Buffett’s classic investment — this bank stock trades at just 0.5 times book value and 6.6 times forward earnings.
Bought: Paramount Worldwide (PARA)
Paramount Universal is a global entertainment company formed by the merger of Viacom and CBS in 2019. The company owns TV and movie studio Paramount Pictures; television networks such as CBS and Comedy Central; and streaming platforms Paramount+, Showtime OTT and Pluto TV. Paramount appears to be another quintessential Buffett value investment. The stock trades at just 0.8 times book value, 13.3 times forward earnings and 0.6 times sales. Berkshire Hathaway announced an investment of 68.9 million shares in Paramount, worth about $2.6 billion. Berkshire Hathaway now owns 11.3% of Paramount, making it one of Paramount’s largest shareholders.
Bought: Celanese Corporation (CE)
Celanese is an industrial chemical manufacturer. In April, the company reported record first-quarter sales and earnings, beating analysts’ consensus estimates. Celanese also raised its forecast for the full year. Celanese is Berkshire’s only stake in the materials sector, which helps diversify the company’s portfolio. Buffett may also be a fan of the company’s ROI, including its 1.9% dividend. Celanese also increased its dividend for 14 consecutive years, a testament to the resilience of its business. Buffett’s new 7.9 million CE shares are worth about $1.1 billion, with Berkshire Hathaway owning a 7.3 percent stake.
Bought: McKesson Corp. (MCK)
McKesson is one of the largest distributors of pharmaceutical, medical and surgical supplies in the United States. Buffett has been involved in healthcare since the start of the pandemic, initially holding AbbVie (ABBV), Bristol-Myers Squibb (BMY), Pfizer (PFE) and Merck & Co. Inc. large shares of the company. MRK), before calling back and eliminating most of the positions. McKesson has performed well in a tough market so far in 2022, up more than 30% this year. Buffett bought more than 2.9 million MCK shares in the first quarter, valuing his new stake in the company at about $895 million.
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