When Warren Buffett’s investment company, Berkshire Hathaway, files its Form 13F every quarter, investors scramble to take a look. These filings detail Berkshire’s stock positions at the end of the previous quarter, and can be used to determine what shares Buffett has been buying and selling.
Earlier this week, it filed for the final quarter of 2020. Here’s a look at some key trades Buffett has made recently.
Buffett sold Apple shares
One interesting takeaway is that Buffett has been selling Apple (NASDAQ: AAPL) stock. The filing shows that in the fourth quarter, Berkshire sold 57.7m Apple shares, trimming the position by about 6%.
This move doesn’t surprise me. For a start, Apple has had an incredible run over the last three years. Back in early 2018, the stock was trading near $40 (after accounting for the stock split). Today, however, it’s near $130. Buffett has made a huge amount of money here.
Secondly, Apple had become an enormous position in the Berkshire Hathaway portfolio. When I analysed it recently, the tech giant was nearly half the portfolio. Taking some profits to rebalance the portfolio seems a prudent move from a risk management perspective.
I’ll point out that after this sale, Buffett still owns around $120bn worth of Apple. It’s still his largest position by a wide margin. So, it’s fair to assume he still likes the stock.
Bank stocks sold
The Form 13F also shows Buffett has continued to sell bank stocks. The filing reveals that during the quarter Berkshire Hathaway:
Offloaded the remainder of its JPMorgan Chase holding, selling 967,267 shares.
Sold its stake in PNC Financial Services Group.
Sold its stake in M&T Bank Corp.
Trimmed its position in Wells Fargo, selling about 75m shares. This reduced the size of the company’s position in WFC by almost 60%.
This activity suggests Buffett isn’t as keen on bank stocks as he was. That said, he still holds a large position in Bank of America.
Buffett bought these stocks
Finally, the filing shows Buffett bought a number of stocks in the fourth quarter. These included:
Telecommunications giant Verizon – he bought about 147m shares here, making the stock a top six holding in the portfolio.
Energy powerhouse Chevron – he bought about 49m shares here, making the stock a top 10 holding.
Insurance company Marsh & McLennan – this was a smaller purchase (4.3m million shares).
Meanwhile, he added to a number of existing holdings including pharmaceutical companies Merck & Co and AbbVie and telecommunications company T-Mobile.
All in all, It’s an interesting mix of purchases. Clearly, Buffett seems to like the telecommunications and healthcare sectors right now. As for Chevron, that looks like a bit of a contrarian trade as oil stocks are quite out of favour right now due to sustainability concerns.
The takeaway here, to my mind, is that while most investors are loading up on tech stocks right now, Buffett seems to be sticking to more traditional sectors.
Edward Sheldon owns shares in Apple. The Motley Fool UK owns shares of and has recommended Apple and Berkshire Hathaway (B shares). The Motley Fool UK has recommended Verizon Communications and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.