UPDATE: Berkshire Reports New Stakes In DaVita, Liberty Media
February 14 2012 - 7:04PM
Dow Jones News
Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) revealed
new investments in DaVita Inc. (DVA) and Liberty Media, though both
holdings were small enough to suggest they may not have been made
by the company's famed leader.
Berkshire held 2.68 million shares of DaVita, one of the largest
U.S. providers of dialysis services, as of Dec. 31, according to a
regulatory filing released Tuesday. The stake was worth $203
million.
The 1.7 million Liberty Media shares were valued at $132 million
at the end of the year. The company is a media conglomerate
controlled by John Malone.
In addition, Omaha, Neb.-based Berkshire more than quadrupled
its stake in DirecTV Group Inc. (DTV), holding shares valued at
$870 million at yearend.
All three companies have been favorites of new Berkshire
investment manager Ted Weschler. His hedge fund, Peninsula Capital
Advisors LLC, owned the stocks last year before he began winding
down the fund to join Buffett's conglomerate. Buffett had said
Weschler would join Berkshire in early 2012, but some of his stock
picks appear to have arrived in Berkshire's portfolio before he
did.
Buffett's company also reported additional shares of Intel Corp.
(INTC), Visa Inc. (V), General Dynamics Corp. (GD) and CVS Caremark
Corp. (CVS). Each of the stocks were companies that Berkshire first
reported owning earlier this year. All were worth less than $300
million at yearend, and because of their size, many Buffett
watchers have concluded they were likely the work of Todd Combs,
another Berkshire investment manager who began working at the
conglomerate about a year ago.
The company also reported increased holdings in a long-held
position in Wells Fargo & Co. (WFC), a Buffett favorite.
Berkshire reported smaller stakes in Kraft Foods Inc. (KFT) and
Johnson & Johnson (JNJ), according to the filing. It also
appeared to have exited a position in Exxon Mobil Corp. (XOM).
The changes in Berkshire's equity portfolio were made in the
last three months of 2011, when the benchmark Standard & Poor's
500 Stock Index rose 11%. Buffett, one of the world's richest
people, wrote on Fortune magazine's website last week that
investing in stocks or buying "first-class businesses" outright are
far better options over the long term than bonds or gold, two
assets that "enjoy maximum popularity at peaks of fear."
Berkshire's total U.S. stock investments were worth $66.2
billion as of Dec. 31, up from the $59.1 billion Berkshire reported
a quarter earlier. Buffett's company, like other firms that control
an investment portfolio of more than $100 million, is required to
report its U.S. stock holdings 45 days after the end of a given
quarter.
News about Berkshire's stock picks has the power to move the
market. Some money managers use the disclosure to mimic the
investment success of the "Oracle of Omaha."
Buffett, 81, has long warned that not all the moves in the
investment portfolio are his. A portion of the portfolio was long
managed by Lou Simpson, the investment manager at Berkshire-owned
car insurer Geico Corp. He stepped down a year ago and Buffett, and
Combs and Weschler have stepped in.
Each of the two men has about $3 billion to invest initially,
Buffett has said. But they will gradually get more of Berkshire's
money to invest over time and may be joined by a third investment
manager. Upon Buffett's eventual departure from the company, the
managers would take over Berkshire's entire stock and debt
portfolio.
Berkshire also showed a stake of 63.9 million shares of
International Business Machines Corp. (IBM), up from 57.3 million
at the end of the third quarter. Buffett had disclosed that
position on CNBC in November.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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