Buffett's Berkshire Sheds Consumer Stocks, Buys Industrials

Wednesday, 14 Nov 2012 05:56 PM

 

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Warren Buffett's conglomerate Berkshire Hathaway sold retailers and consumer heavyweight stocks in the third quarter but took new positions in industrial manufacturers like Deere & Co. and Precision Castparts, according to a regulatory filing on Wednesday.

Many of the investment decision were made not by Buffett himself but by his two investment managers, Ted Weschler and Todd Combs. Buffett has said only the changes in Berkshire's biggest positions, like adding to holdings of Wells Fargo, were made by him.

The portfolio was again volatile during the quarter, with a number of large moves in a wide variety of stocks. While Buffett is the exemplar of buy-and-hold investing, he has indicated that at least one of the team of Weschler and Combs is inclined to trade more actively from quarter to quarter.

Berkshire took new stakes in Deere, the world's largest agricultural equipment maker, as well as Precision Castparts, whose castings are used in every jet aircraft engine program in production or under development.

It also took a position in Wabco Holdings, which makes braking and transmission products for the commercial truck market, and raised its stake by 50 percent in the automaker General Motors.

At the same time, Berkshire sold two stocks that were relatively new to the portfolio, CVS Caremark and Dollar General. It cut its long-time holding in Johnson & Johnson by 95 percent and also trimmed its Procter & Gamble position by another 11 percent.

J&J was one of Berkshire's biggest investments by valuation over the last five years, but Buffett has been selling it aggressively this year, telling CNBC in February the company "has messed up in a lot of ways" in the recent past.

Berkshire was also active in media stocks during the quarter. In addition to a new stake in Media General, tied to Berkshire's acquisition of that company's newspapers, the conglomerate increased its position in Viacom and sold some of its relatively new holdings in newspaper operator Lee Enterprises.

Buffett's company made a number of investments in financial stocks as well, adding to positions in his favorite bank Wells Fargo and also BNY Mellon even as it sold some holdings in Visa Inc and U.S. Bancorp.

In the second quarter, Berkshire made big bets on the refiner Phillips 66 and the oilfield equipment maker National Oilwell Varco.

It raised the National Oilwell stake again in the third quarter, while cutting its position in former Phillips 66 parent ConocoPhillips.

© 2014 Thomson/Reuters. All rights reserved.

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