It’s no secret that Warren Buffett has managed to string together impressive 20% returns for at least the last 20 years of managing Berkshire Hathaway. He’s done this through an impressive investment philosophy of buying only the highest quality companies when the market has discounted their value to a price point below their actual book value. While the majority of Berkshire’s wealth is tied to companies they own it outright Mr. Buffett still make substantial investment in the stock market where he buys and sells publicly traded companies.
His largest holding today is Wells Fargo (WFC). Wells Fargo represents approximately 20% of Mr. Buffett’s portfolio where he acquired shares at an average cost of $37.49. Since shares are now trading at $45.34, this represents a gain of 21%. Since Wells Fargo is now fully valued we wouldn’t be surprised to see Warren Buffett begin to decrease his position in the bank since his 20% gain threshold has now been met. Still there might be some upside potential with Wells Fargo, so Mr. Buffett may be seeing this as a longer-term investment with potential growth in earnings.
In addition to Wells Fargo, Warren Buffett appears to be very bullish on Coca-Cola (KO), IBM, American Express (AXP), Procter & Gamble (PG), Walmart (WMT), Exxon Mobil (XOM), U.S. Bancorp (USB), DirecTV(DTV), Davita (DVA), Moody’s (MCO), and Phillips 66 (PSX.)
Coca-Cola represents 16 percent of Warren’s portfolio, IBM represents 13%, American Express represents 12%, Procter & Gamble represents 4%.
Other holdings in the Buffett portfolio include General Motors (GM), Conoco Phillips (COP), Bank of New York Mellon (BK), National Oilwell Varco (NOV), Chicago Bridge and iron Company (CBI), Suncor Energy (SU), Viacom (VIAB), M&T Bancorp (MTB), VeriSign (VRSN), Costco (COST), USG Corporation (USG), Precision Cast Parts Corporation (PCP), WABCO Holdings (WBC), Deere & Company (DE), Torch Mark Corporation (TMK), Visa (V), MasterCard (MA), Sanofi (SNY), Starz (STRZA), Verisk Analytics (VRSK), Media Gen (MEG) , Johnson and Johnson (JNJ), Dish Network (DISH), Mondelez (MDLZ), Glaxo Smith Kline (GSK), General Electric (GE), Kraft Foods (KRFT), United Parcel Service (UPS), and Lee Enterprises (LEE.)
Recently Mr. Buffett has been seen purchasing shares of DaVita Incorporated on November 8, 2013 for an average share price of $55.14 and again on December 12, 2013 for an average share price of $58.24 . In addition Warren has exercised shares of USG Corporation for an average cost of $11.40, which I’m sure he will begin a sell off in the open market for a tidy profit.
Overall, the Buffett portfolio represents a true blue chip position in the market. A grouping of stocks that should perform very well into 2014. As his positions change, we will keep you updated on Warren Buffett and the Berkshire Hathaway group.