Once each quarter, retail investors get to see directly into the minds of some of the wealthiest and most successful Wall Street gurus and fund managers. Any institutional investors with more than $100 million in equity assets under management must publicly disclose their holdings to the U.S. Securities and Exchange Commission on 13-F forms within 45 days of the end of each quarter.
The most anticipated 13-F filing each quarter is that of Warren Buffett’s Berkshire Hathaway (BRK/A, BRK/B). Here are seven stocks Buffett has been buying and selling according to this month’s filing.
The biggest news from Buffett’s filing is the disclosure that Berkshire sold shares of Apple in the fourth quarter. Buffett trimmed his stake in his largest holding from 253.4 million shares to 249.6 million shares, a 1.5 percent reduction.
Apple investors knew the day would come at some point when Buffett would stop buying Apple, and it may have taken fears over a 2019 iPhone sales slowdown to finally reach that point. Even after selling 3.8 million shares of AAPL stock, Apple remains Berkshires largest stock holding valued at roughly $42.4 billion.
Bank of America Corp.
Bank of America is Berkshire’s second largest holding, but Buffett closed the gap in the fourth quarter by buying 18.9 million shares of BAC stock while he was trimming his Apple stake. Buffett has been an aggressive buyer of bank stocks in recent quarters. He first invested $5 billion in convertible BAC preferred stock in 2011.
In 2017, Buffett exercised his conversion option and Berkshire acquired 700 million BAC common shares. With the new shares he purchased in the fourth quarter, Berkshire’s Bank of America stake is worth roughly $25.4 billion.
J.P. Morgan Chase & Co.
Buffett followers shouldn’t be surprised to see him adding to his stake in J.P. Morgan. Buffett’s new 35.6 million share stake in JPM stock was one of the major headlines from his third-quarter 13-F filing.
However, he was aggressively adding to his position in the fourth quarter, buying another 14.4 million shares an increasing the size of his JPM stake by 40 percent. Buffett typically builds his positions in big banks over several quarters, so it’s likely Berkshire has been adding JPM stock in the first quarter as well.
Wells Fargo & Co.
Wells Fargo was the lone exception to Buffett’s aggressive bank buying in the fourth quarter. Berkshire sold about 15.5 million shares of WFC stock, trimming his holding by about 3.5 percent. Wells Fargo investors shouldn’t take the selling too hard, however. Wells Fargo is still Berkshire’s third largest holding, valued at around $20.7 billion.
Buffett has previously said he must trim his WFC stock investment periodically as the company buys back shares of its own stock. If Berkshire’s ownership stake rises above 10 percent, it will be subject to additional regulatory requirements.
In a rare about-face, Buffett liquidated his entire 41.4 million share stake in Oracle Corp. in the fourth quarter. This news is likely particularly troubling for Oracle investors considering Buffett only began investing in Oracle in the third quarter of last year.
Buffett has historically shied away from tech stocks, and he must have seen something he didn’t like about Oracle at some point in the quarter. ORCL stock was up just 2.4 percent in the second half of 2018, suggesting Buffett likely came close to breaking even on his odd short-term Oracle trade.
General Motors Co.
Buffett clearly doesn’t seem concerned about a cyclical slowdown in the auto market. In the fourth quarter, Berkshire increased its General Motors stake by 37 percent, buying more than 19.8 million more shares. Buffett has been adding to his General Motors stake for several quarters now.
Tesla (TSLA) has gotten a lot of attention on Wall Street in the past couple of years, but GM is the only automaker that Buffet owns. He’s likely a fan of the stock’s miniscule 6 forward earnings multiple. Buffett’s GM stake is now worth about $2.8 billion.
United Continental Holdings
Berkshire holds stakes of Delta Air Lines (DAL), Southwest Airlines Co. (LUV) American Airlines Group (AAL) and United Continental. In the fourth quarter, Buffett sold shares of both United and Southwest, but he was a more aggressive seller of United. Berkshire cut its United stake by 15.5 percent to about 21.9 million shares worth about $1.9 billion.
Some analysts have speculated Buffett may eventually take over one of the “big four” U.S. airlines entirely, but it seems as though United may not be the front-runner for a buyout at this point.