I have been tracking Berkshire Hathaway's stock holdings since Q4 of 2003. The company usually files with the SEC about a month and half after the end of the quarter. My thinking was that I might be able to learn a thing or two from Buffett (or Lou Simpson at GEICO for that matter).
When I tallied everything up for that quarter I discovered, for example, that Cadbury Schweppes (NYSE: CSG) had been added to the porfolio. This means Berkshire had bought CSG at prices ranging between $25 and $30. At the time of filing, the stock was trading in the mid $30s. Curiously, CSG was eliminated from Berkshire's filings the following quarter whenBerkshire notified the SEC that it was not obligated to disclose foreign corporation holdings. In any case, the shares traded in the $30-$35 range through October 2004 and then took off to a recent close near $42.
In 2004, Berkshire either eliminated or reduced several of its holdings. It also asked the SEC for confidentiality treatment on its Sun Trust holding in Q4 (In Q2 of 2005, Sun Trust reappeared in the SEC filing but the position had been pared back by 45%). Additions to the portfolio included Pier 1 (NYSE: PIR) in Q2, Comcast Corp (Nasdaq: CMCSA) and Servicemaster Company (NYSE: SVM) in Q3, and Dean Foods (NYSE: DF) in Q4. The Comcast position was doubled in Q4. Incidentally, SVM's business is as simple as providing lawn-care and housekeeping services. Classic Buffett!
So far in 2005, Berkshire has asked for SEC confidentiality on its H&R Block and Torchmark holdings. It has also added Home Depot (NYSE: HD), Lowes Companies (NYSE: LOW), Lexmark International (NYSE: LXK) and TYCO (NYSE: TYC) in Q2. Not disclosed but widely publicized, Berkshire also took a 'significant' position in Anheuser Busch (NYSE: BUD) in Q1.
If you are curious, BUD is trading below the $47-$49 Buffett would have paid (but keep in mind that Berkshire may have gotten warrants or preferred shares for its investment). So is PIR which Berkshire probably bought at prices ranging from $17 to $20. Berkshire added Comcast over two consecutive quarters with prices ranging from high $27s to about $30. The stock is at $29 after hitting a high of $34.5 earlier this year.
To be sure Buffett has had his share of bad calls. But overall, his track record speaks for itself. What I should have done was to buy his B shares (NYSE: BRK-B) at $1,000 when he issued them in 1996. Instead I waited 9 years before I finally added a few shares to my portfolio at $2,800.
I also like the Comcast story: largest cable operator in North America, strong and growing free cash flow, declining capital expenditures and a generous stock buyback program. In the most recent earnings call, Comcast's CEO expressed disappointment with the share performance but noted that this has provided him with opportunity to buy back shares at prices management views as attractive. I have added Comcast to my portfolio at around $32.
Finally, I am intrigued by Pier 1, the largest specialty furniture retailer in North America. The company is in big trouble as competition from Target and Wal-Mart is heating up. Yet, this is a 43 year old company with CEO who has been at the helm for 30 years. He has been through it all. Buffett must like the management team if he invested. I am sure he is also fond of the dividend (which at these prices is north of 3%!) and the share buyback program. Pier 1 has hardly any debt and slowing store expansions to concentrate on improving productivity and operating margins. This fall, the company will mail its first nation-wide direct-mail catalog. I have added Pier 1 at around $12.50. It is comforting to know that Buffett understands the furniture business well. After all, he did purchase 90% of Mrs. B's Nebraska Furniture Mart for $60 million in 1983 with a handshake.
When I tallied everything up for that quarter I discovered, for example, that Cadbury Schweppes (NYSE: CSG) had been added to the porfolio. This means Berkshire had bought CSG at prices ranging between $25 and $30. At the time of filing, the stock was trading in the mid $30s. Curiously, CSG was eliminated from Berkshire's filings the following quarter whenBerkshire notified the SEC that it was not obligated to disclose foreign corporation holdings. In any case, the shares traded in the $30-$35 range through October 2004 and then took off to a recent close near $42.
In 2004, Berkshire either eliminated or reduced several of its holdings. It also asked the SEC for confidentiality treatment on its Sun Trust holding in Q4 (In Q2 of 2005, Sun Trust reappeared in the SEC filing but the position had been pared back by 45%). Additions to the portfolio included Pier 1 (NYSE: PIR) in Q2, Comcast Corp (Nasdaq: CMCSA) and Servicemaster Company (NYSE: SVM) in Q3, and Dean Foods (NYSE: DF) in Q4. The Comcast position was doubled in Q4. Incidentally, SVM's business is as simple as providing lawn-care and housekeeping services. Classic Buffett!
So far in 2005, Berkshire has asked for SEC confidentiality on its H&R Block and Torchmark holdings. It has also added Home Depot (NYSE: HD), Lowes Companies (NYSE: LOW), Lexmark International (NYSE: LXK) and TYCO (NYSE: TYC) in Q2. Not disclosed but widely publicized, Berkshire also took a 'significant' position in Anheuser Busch (NYSE: BUD) in Q1.
If you are curious, BUD is trading below the $47-$49 Buffett would have paid (but keep in mind that Berkshire may have gotten warrants or preferred shares for its investment). So is PIR which Berkshire probably bought at prices ranging from $17 to $20. Berkshire added Comcast over two consecutive quarters with prices ranging from high $27s to about $30. The stock is at $29 after hitting a high of $34.5 earlier this year.
To be sure Buffett has had his share of bad calls. But overall, his track record speaks for itself. What I should have done was to buy his B shares (NYSE: BRK-B) at $1,000 when he issued them in 1996. Instead I waited 9 years before I finally added a few shares to my portfolio at $2,800.
I also like the Comcast story: largest cable operator in North America, strong and growing free cash flow, declining capital expenditures and a generous stock buyback program. In the most recent earnings call, Comcast's CEO expressed disappointment with the share performance but noted that this has provided him with opportunity to buy back shares at prices management views as attractive. I have added Comcast to my portfolio at around $32.
Finally, I am intrigued by Pier 1, the largest specialty furniture retailer in North America. The company is in big trouble as competition from Target and Wal-Mart is heating up. Yet, this is a 43 year old company with CEO who has been at the helm for 30 years. He has been through it all. Buffett must like the management team if he invested. I am sure he is also fond of the dividend (which at these prices is north of 3%!) and the share buyback program. Pier 1 has hardly any debt and slowing store expansions to concentrate on improving productivity and operating margins. This fall, the company will mail its first nation-wide direct-mail catalog. I have added Pier 1 at around $12.50. It is comforting to know that Buffett understands the furniture business well. After all, he did purchase 90% of Mrs. B's Nebraska Furniture Mart for $60 million in 1983 with a handshake.
1 comment:
Nice post chief. Let's hope PIR holds up!
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