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Berkshire’s new CEO overhauls portfolio, dumping a slate of stocks

(This is the Warren Buffett Watch newsletter, news and analysis, covering all things Warren Buffett and Berkshire Hathaway. You can sign up Here To get it in your inbox every Friday evening.)

ABEL PORTFOLIO IS BEING RENEWED AGAIN

Key positions cut, Alphabet more than triples, Delta returns

Berkshire Hathaway’s stock portfolio underwent one of its biggest revamps ever in Greg Abel’s first three months as the company’s CEO, according to a new report. SEC filing.

Two new names Delta Airlines And Macy’sFour holdings were added to the list with their increases.

google parent Alphabet Berkshire had the biggest rise in the first quarter, increasing the number of shares it owns by 224%.

Given its size, this increase is almost certainly an Abel move approved, possibly even suggested, by Warren Buffett.

With a market value of $16.6 billion as of the end of the first quarter, Google’s parent company is Berkshire’s seventh-largest equity holding.

The decision to buy so many shares has been a spectacular success, at least in the short term.

The stock is up 38% since the end of the first quarter, just over six weeks ago.

Abel significantly reduced the number of companies in its portfolio

Like Previewed by Wall StreetJournal Last month, Abel’s portfolio manager, Todd Combs, appears to have sold most or all of his holdings. He moved to JPMorgan in early December..

Abel or Ted Weschler, who is still a portfolio manager at Berkshire, likely also sold some stocks not owned by Todd, but the company generally doesn’t publicly disclose who is responsible for individual names, so we don’t know for sure.

Assets eliminated in the first quarter include:

2.3 million Amazon shares sold in the first quarter were all that was left after Berkshire sold 7.7 million of its 10 million shares in the fourth quarter.

Constellation Brandsthe one which… Associated with combsIt was almost completely eliminated with a 95% cutoff.

Bank of America And AppleRates that decreased significantly in previous quarters were maintained.

BofA cut less than 1% and Apple’s position remained unchanged.

A table containing Berkshire’s entire equity portfolio will appear later in the newsletter.

Chevron is the largest segment

It is measured by market value, Strip It was the biggest drop in the first quarter.

The value of the shares in the 35 percent cut was over $8 billion as of the end of the first quarter. The remaining stake was worth more than $17 billion at the time.

It is not thought to be a Combs stock, especially considering its large size.

The stock was on the rise in the first quarter as Berkshire sold, but is down 7.6% since the end of the first quarter.

It is still increasing by 25.4% on an annual basis due to the effect of increasing oil prices due to the Iran war.

Back in the air with Delta

The second largest increase after Alphabet in the first quarter was as follows: return Delta Airlines.

Berkshire purchased 39.8 million shares, currently valued at $2.8 billion.

It bought the shares in 2016 as consolidation increased the pricing power of carriers.

“It’s true that airlines had a bad time in the 20th century,” he told CNBC’s Becky Quick in early 2017. They look like the Chicago Cubs. And I hope they put that bad century out of the way.”

It meant a return to an industry he had avoided for years following his troubled investment in US Airways in 1989.

In his letter to shareholders in 2007Buffett wrote: “The worst kind of business is the kind that grows rapidly, requires significant capital to achieve growth, and then makes little or no money. Consider the airlines. Here, a lasting competitive advantage has proven elusive to achieve since the days of the Wright Brothers. Indeed, if there had been a forward-thinking capitalist at Kitty Hawk, he would have done his successors a great favor by shooting the Orville.”

Given his history with airlines, it seems unlikely that Buffett is behind this latest return to the skies.

(CNBC’s Buffett Archive includes: A collection of clips featuring his thoughts on airlines over the years.)

Macy’s and Times

Berkshire triples its shares New York Times It now stands at 15.1 million shares worth more than $1.1 billion.

And a new position Macy’s Shares of the department store chain rose 5.3% after the closing bell, although it was worth just $59 million even including late profit.