Skip to main content

UPDATE Nov 21, 2023: Berkshire Hathaway filed its latest 13F for Q3 2023 with several key updates. While no consumer staples were acquired, positions were added or strengthened in several communication services companies. In Q3, Berkshire increased its stake in Liberty Live Group (NASDAQ: LLYVA, LLYVK), and added small (<$50MM) stakes in Sirius XM Holdings Inc (NASDAQ: SIRI) and Atlanta Braves Holdings Inc (NASDAQ: BATRK). Additionally, positions in Activision Blizzard Inc (NASDAQ: ATVI before Microsoft acquisition) and General Motors Co (NYSE: GM) were liquidated, and holdings in Chevron Corp (NYSE: CVX) and HP Inc (NYSE: HPQ) were reduced.

 

Is there an opportunity for Berkshire to acquire any value stocks at a discount?

In the realm of investment, the delineation between value and growth is often markedly clear. Berkshire Hathaway Inc. (NYSE: BRK-B), a conglomerate spearheaded by Warren Buffett, has historically been a proponent of value investment, veering towards assets with intrinsic values that are not fully appreciated by the market. As of their last filing in June, the investment titan holds approximately $50 billion in liquid cash, with a total liquidity position of $147.4 billion when considering cash equivalents and short-term treasuries.

 

 

Berkshire Cash on Hand Over Time
(May not include all cash equivalents, such as short-term treasuries) Source

 

The current portfolio (see chart at the bottom of this article) showcases a diverse range of holdings: Apple Inc. (NASDAQ: AAPL) remains sturdy, American Express (NYSE: AXP) is facing a short-term decline, Bank of America (NYSE: BAC) is lingering below its highs amid concerns surrounding smaller banks, Chevron (NYSE: CVX) is holding its ground in comparison to its counterparts, while Hewlett-Packard (NYSE: HPQ) is under the scrutiny for underperformance against its peers. It’s also worth noting the investment conglomerate recently sold more than $400 million worth of HPQ stock, dropping their stake below the 10% threshold requiring active disclosures of stock purchases/sales.

 

Value Opportunity in Consumer Staples

With a considerable cash reserve and an economic environment where utilities and energy stocks are on a downswing, the question beckons, where should Berkshire channel its formidable financial resources?

One potential avenue is General Mills (NYSE: GIS), a renowned player in the consumer staples sector. General Mills exhibits a robust financial health with appreciable margins and a low debt-to-equity ratio compared to its industry peers, a trait that becomes significantly pertinent in a scenario of rising interest rates. Its standing as a consumer staple mirrors Berkshire’s historical preference towards such entities, with Kraft Heinz (NASDAQ: KHC), Coca-Cola (NYSE: KO), and Kroger (NYSE: KR) being notable examples.

Consumer staples, often characterized by their consistent demand and resilient nature, could act as a defensive play against market volatility, thereby aligning with Berkshire’s value-centric investment ethos. Moreover, the predictable cash flows and dividends associated with consumer staples like General Mills make them a viable candidate for long-term investment.

As the market pendulum continues to swing, and with the upcoming release of Berkshire’s Q3 13F filing this October, the investment community is on alert to discern any strategic shifts in asset allocation. The conjecture around General Mills merely epitomizes the broader quest for value in the consumer staples sector, as the rest of the market experiences turbulence.

The essence of value investing lies in the rigorous analysis and discernment of underappreciated assets with solid underlying fundamentals. It is this principle that has undergirded Berkshire Hathaway’s investment philosophy. In a market landscape where the traditional sectors are facing headwinds, exploring alternative sectors such as consumer staples could potentially unveil undervalued assets that resonate with the foundational investment philosophy of Berkshire Hathaway.

The example of General Mills alongside Berkshire’s historical investment patterns suggests a plausible alignment. Whether this conjecture materializes into a tangible investment, only time (and SEC filings) will tell. Until then, the quest for value remains an enduring endeavor for investors both large and small.

 

Berkshire Holdings

Symbol Holdings as of Jun 30, 2023 Stake Price as of Sep 29, 2023 Value % of Stock Portfolio P/E as of Oct 5, 2023 Beta as of Oct 5, 2023
Activision Blizzard Inc ATVI 14,658,121 1.9% $93.63 $1,372,439,869 0.4% 34.35 0.44
Ally Financial Inc ALLY 29,000,000 9.6% $26.68 $773,720,000 0.2% 6.68 1.33
Amazon.com, Inc. AMZN 10,551,000 0.1% $127.12 $1,341,243,120 0.4% 105.00 1.24
American Express Company AXP 151,610,700 20.6% $149.19 $22,618,800,333 6.6% 14.92 1.19
Aon PLC AON 4,335,000 2.1% $324.22 $1,405,493,700 0.4% 25.27 0.89
Apple Inc AAPL 915,560,382 5.9% $171.21 $156,753,093,002 46.0% 29.09 1.27
Bank of America Corp BAC 1,032,852,006 13.0% $27.38 $28,279,487,924 8.3% 7.45 1.38
BYD Co. Ltd BYDDF 98,603,142 9.0% $30.89 $3,045,851,056 0.9% 26.35 0.69
Capital One Financial Corp. COF 12,471,030 3.3% $97.05 $1,210,313,462 0.4% 7.09 1.47
Celanese Corporation CE 5,358,535 4.9% $125.52 $672,603,313 0.2% 10.40 1.26
Charter Communications Inc CHTR 3,828,941 2.6% $439.82 $1,684,044,831 0.5% 14.77 1.12
Chevron Corporation CVX 123,120,120 6.5% $168.62 $20,760,514,634 6.1% 10.34 1.17
Citigroup Inc C 55,244,797 2.9% $41.13 $2,272,218,501 0.7% 6.32 1.55
Coca-Cola Co KO 400,000,000 9.2% $55.98 $22,392,000,000 6.6% 22.74 0.60
DR Horton Inc DHI 5,969,714 1.8% $107.47 $641,565,164 0.2% 7.32 1.55
Davita Inc DVA 36,095,570 39.5% $94.53 $3,412,114,232 1.0% 19.09 0.94
Diageo plc DEO 227,750 0.0% $149.18 $33,975,745 0.0% 18.35 0.41
Floor & Decor Holdings Inc FND 4,780,000 4.5% $90.50 $432,590,000 0.1% 34.04 1.96
General Motors Co GM 22,000,000 1.6% $32.97 $725,340,000 0.2% 4.49 1.41
Globe Life Inc GL 2,515,574 2.7% $108.73 $273,518,361 0.1% 14.70 0.78
HP Inc HPQ 100,922,113 10.2% $25.70 $2,593,698,304 0.8% 11.22 1.06
Itochu Corporation 8001:TYO 118,331,800 7.5% $36.43 $4,310,827,474 1.3% 9.7
Jefferies Financial Group Inc JEF 433,558 0.2% $36.63 $15,881,230 0.0% 25.01 1.41
Johnson & Johnson JNJ 327,100 0.0% $155.75 $50,945,825 0.0% 31.55 0.57
Kraft Heinz Co KHC 325,634,818 26.5% $33.64 $10,954,355,278 3.2% 12.95 0.68
Kroger Co KR 50,000,000 7.0% $44.75 $2,237,500,000 0.7% 19.80 0.50
Lennar Corp LEN 152,572 0.1% $112.23 $17,123,156 0.0% 8.03 1.48
Liberty Latin America Series A LILA 2,630,792 6.0% $8.16 $21,467,263 0.0% 9.04 1.34
Liberty Latin America Series C LILAK 1,284,020 0.8% $8.16 $10,477,603 0.0% 9.01 1.34
Liberty Formula One Series C FWONK 7,722,451 3.7% $62.30 $481,108,697 0.1% 37.53 1.09
Liberty SiriusXM Series A LSXMA 20,207,680 20.6% $25.45 $514,285,456 0.2% 9.79 1.16
Liberty SiriusXM Series C LSXMK 43,208,291 19.8% $25.46 $1,100,083,089 0.3% 9.81 1.16
Liberty Live Series A LLYVA 5,051,920 19.7% $31.92 $161,257,286 0.0%
Liberty Live Series C LLYVK 11,132,594 17.5% $32.10 $357,356,267 0.1%
Louisiana-Pacific Corp LPX 7,044,909 9.8% $55.27 $389,372,120 0.1% 24.87 1.70
Markel Group Inc MKL 471,661 3.6% $1472.49 $694,516,106 0.2% 10.50 0.75
Marubeni Corp 8002:TYO 141,000,200 8.3% $15.72 $2,216,523,144 0.7% 7.7
Mastercard Inc MA 3,986,648 0.4% $395.91 $1,578,353,810 0.5% 36.87 1.09
Mitsubishi Corp 8058:TYO 119,497,600 8.3% $48.04 $5,740,664,704 1.7% 10.1
Mitsui & Co 8031:TYO 125,022,300 8.1% $36.55 $4,569,565,065 1.3% 7.0
MONDELEZ INTERNATIONAL INC Common Stock MDLZ 578,000 0.0% $69.40 $40,113,200 0.0% 22.82 0.65
Moody’s Corp MCO 24,669,778 13.4% $316.17 $7,799,843,710 2.3% 39.66 1.30
Nu Holdings Ltd NU 107,118,784 2.3% $7.25 $776,611,184 0.2% 703.00 1.13
NVR Inc NVR 11,112 0.3% $5963.30 $66,264,187 0.0% 12.72 1.03
Occidental Petroleum Corp OXY 224,129,192 25.3% $64.88 $14,541,501,977 4.3% 10.55 1.72
Paramount Global Class B PARA 93,730,975 15.4% $12.90 $1,209,129,578 0.4% 1.68
Procter & Gamble Co PG 315,400 0.0% $145.86 $46,004,244 0.0% 24.70 0.41
Snowflake Inc SNOW 6,125,376 1.9% $152.77 $935,773,692 0.3% 0.78
SPDR S&P 500 ETF Trust SPY 39,400 0.0% $427.48 $16,842,712 0.0% 21.39 1.00
StoneCo Ltd STNE 10,695,448 3.4% $10.67 $114,120,430 0.0% 22.40 2.23
Sumitomo Corp 8053:TYO 101,210,400 8.2% $20.11 $2,035,341,144 0.6% 6.5
T-Mobile Us Inc TMUS 5,242,000 0.4% $140.05 $734,142,100 0.2% 27.78 0.54
United Parcel Service, Inc. UPS 59,400 0.0% $155.87 $9,258,678 0.0% 13.33 1.09
Vanguard 500 Index Fund ETF VOO 43,000 0.0% $392.70 $16,886,100 0.0% 21.26 1.00
Verisign, Inc. VRSN 12,815,613 12.4% $202.53 $2,595,546,101 0.8% 30.00 0.94
Visa Inc V 8,297,460 0.4% $230.01 $1,908,498,775 0.6% 29.38 0.95
TOTAL Public Stocks $340,962,166,935 100.0%
Berkshire Market Capitalization: $754,437,134,132
Berkshire Cash as of 30 Jun 23: $147.4 billion

Chart Sources: https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.sec.gov/Archives/edgar/data/1067983/000095012323008074/xslForm13F_X02/25376.xml https://finance.yahoo.com/



The Content contained on this Website and/or in any audio webcast presentation and/or any communication related to any audio webcast presentation made on this Website does not constitute advice and you should not rely on any Content in any audio webcast presentation and/or any communication related to any audio webcast presentation made on this Website, to make (or refrain from making) any decision taken (or refrain from taking) any action, as it may not be suitable for you. Before making any investment decision, you should contact an independent financial advisor. Any recommendations for buying or selling any security and/or options are for informational purposes only. Please read our full disclaimer here.