Buffett's Berkshire Dumps Newspaper Publisher Gannett, Buys Dish Network

Saturday, 17 Aug 2013 08:04 AM

 

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Berkshire Hathaway reported new stakes in Suncor Energy and Dish Network and dumped newspaper publisher Gannett as the company run by Warren Buffett added billions of dollars of stock investments.

The changes were disclosed in a recent U.S. Securities and Exchange Commission filing made public, which detailed $89 billion of Berkshire equity investments, mostly listed on U.S. exchanges, as of June 30.

U.S. regulators require large investors to disclose their stock holdings every quarter, and the disclosures can offer a window into their strategies for buying and selling stocks.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

Berkshire took a 17.8 million-share stake in Calgary-based Suncor, which is Canada's biggest oil and gas producer and has a large presence in the Alberta oil sands. That stake was valued at $524 million at the end of the second quarter.

It also reported a small, 547,312-share stake in Dish, the satellite TV company run by billionaire Charlie Ergen, valued at $23.3 million on June 30.

Berkshire slashed its stakes in food companies Kraft Foods Group Inc. and Mondelez International Inc. by 88 percent and 92 percent, respectively, and shed its stake in newspaper and broadcasting company Gannett. In the first quarter, Berkshire held 1.7 million shares of Gannett worth about $38 million.

Buffett has expressed interest in newspapers in the past, having purchased dozens of local papers, including The Press of Atlantic City in New Jersey and the Roanoke Times in Virginia, CNNMoney reported.

Buffett said in his annual letter to shareholders in March that he and business partner Charlie Munger "love newspapers" and "believe that papers delivering comprehensive and reliable information to tight-knit communities that also have a sensible Internet strategy will remain viable for a long time," CNNMoney reported.

Berkshire is the largest outside investor in The Washington Post Co. and has held the stock for 40 years and reportedly holds more than 1.8 million shares.

Shares of companies often rise after Berkshire discloses sizable new investments because investors try to copy Buffett, the world's fourth-richest person according to Forbes magazine.

Meanwhile, Suncor spokeswoman Kelli Stevens declined to comment, saying the company does not typically discuss individual investors' holdings. Dish spokesman Bob Toevs also declined to comment.

David McColl, a Morningstar equity analyst in Chicago, said a shortage of pipelines has forced Suncor and rivals to move more products by rail, but that Suncor has indicated an ability to address this problem in the next one to five years.

"Suncor is one of the most heavily undervalued Canadian integrated oil producers," he said. "It is no surprise that a value investor like Berkshire Hathaway would view it as a phenomenal investment opportunity."

Berkshire has benefited this year from Buffett's preference for investments in businesses and stocks over fixed income, which has been under pressure from rising interest rates.

The Omaha, Nebraska-based company's book value per share, Buffett's preferred measure of growth, grew 7.6 percent from January to June.

Its largest stock holding, Wells Fargo, grew 1.1 percent in the second quarter to 463.1 million shares, equal to a $19.1 billion stake in the fourth-largest U.S. bank.

CONFIDENTIAL TREATMENT


Berkshire spent $4.64 billion on stocks in the quarter. While Buffett has said he makes Berkshire's largest investments, some investments are made by portfolio managers Todd Combs and Ted Weschler, who oversee several billion dollars each.

Thursday's filing did not say who bought what, but said that some holdings were reported confidentially to the SEC.

Buffett sometimes gets SEC permission to amass big positions quietly so he need not worry about copycat investors. One of Berkshire's top holdings, a $13 billion stake in International Business Machines Corp, was built in this manner.

Earlier this month, Berkshire said it ended June with $101.9 billion of equity securities overall. Its top four holdings - Wells Fargo, Coca-Cola, IBM and American Express - were worth more than $59 billion as of June 30.

Berkshire also owns more than 80 businesses in such areas as insurance, railroads, utilities, chemicals, apparel and food.

In recent months, it bought half of ketchup maker H.J. Heinz and made several smaller acquisitions.

On Wednesday, its HomeServices of America Inc unit, the second-largest U.S. full-service residential real estate brokerage, said it bought real estate service companies Prudential Fox & Roach and Trident Group for undisclosed prices.

During the quarter, Berkshire added to stakes in Bank of New York Mellon Corp., automaker General Motors Co., oilfield equipment provider National Oilwell Varco Inc., US Bancorp and Verisign Inc., which assigns Internet protocol addresses. The GM share stake grew 60 percent.

It also reported lower stakes in drugmaker GlaxoSmithKline and credit rating company Moody's.

The SEC filing was to have been made public on Wednesday, but the release was delayed by a glitch in the regulator's filing system. An assistant to Buffett said Berkshire submitted the filing prior to Wednesday's deadline.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

© 2014 Thomson/Reuters. All rights reserved.

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