Buffett targets cars, oil and satellite TV
August 16, 2013 Leave a comment
August 16, 2013 12:00 am
Buffett targets cars, oil and satellite TV
By Dan McCrum in New York
Warren Buffett put money to work in cars, oil and satellite television in the second quarter as the chief executive of Berkshire Hathaway and his deputies invested the most money in stocks since 2011, according to regulatory filings. Berkshire increased its holdings in General Motors, the carmaker recovering from bankruptcy and a government bailout, and made two new investments: in Dish Network, the broadcaster controlled by Charles Ergen, and Suncor Energy, a Canadian oil company. The billionaire investor, for decades a proponent of the long-term attractions of stocks, made the investments in a period when the US stock market surpassed its previous high set in 2007. The rising market helped push the value of Berkshire’s stock portfolio to $97bn on Thursday, accounting for more than a third of the conglomerate’s $287bn market capitalisation.Mr Buffett has built the company over five decades, amassing a confectionery-to-rail collection of businesses, attached to the core insurance business.
He prides himself on investing the insurance premiums collected over time, known as the “float”, and aims to grow the underlying book value of his business empire faster than the S&P 500. However, in his widely read letter to shareholders this year he chastised himself for subpar performance, and if Berkshire expands slowly this year he risks being beaten by the US market over a five-year period for the first time.
Mr Buffett now controls 40m GM shares worth $1.4bn, up from 25m at the end of the first quarter. Berkshire also disclosed that at the end of June it owned more than 17.8m Suncor shares worth more than $500m.
The new stake in Dish adds to Berkshire’s media holdings, as it already owns 6.8 per cent of DirecTV, worth $2.3bn, in addition to holdings in the Washington Post Company, and Liberty Media. However, the small size of the Dish investment, at $23m, suggests it is the responsibility of one of Mr Buffett’s two investment deputies, Todd Combs and Ted Weschler.
Mr Buffett also added slightly to his largest holding, in Wells Fargo, taking Berkshire’s stake to 8.7 per cent of the consumer bank, worth $20bn.
Berkshire reduced some holdings, exiting a stake in newspaper publisher Gannett, while reducing investments in Kraft and Mondelez, the snack group it spun out last year.
Berkshire’s biggest holdings are mostly consumer-facing groups with strong brands, including Coca-Cola, American Express and Procter & Gamble. The exception is Berkshire’s one technology holding, a $13bn stake in IBM.
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