Berkshire Hathaway (BRK.A -0.52%) (BRK.B -0.26%), the giant conglomerate run by legendary investor Warren Buffett, released its always-anticipated 13F filing on Monday afternoon, detailing the company’s portfolio movements for the third quarter of the year. We already knew from Berkshire’s last earnings report that it bought nearly $9 billion in stock and sold $5.3 billion in the third quarter. But the 13F required for large institutional investment managers removes the mystery. Let’s take a look.
It’s a core part of Apple’s business
Buffett and Berkshire’s most notable move of the quarter was arguably their investment in the world’s largest chip maker. Taiwan Semiconductor Manufacturing Company (TSM -1.40%)also known as TSMC. Berkshire bought about 60.06 million shares in the company, which was worth $4.1 billion at the time of the purchase. This equates to a roughly 1.2% stake in the company.
TSMC is a powerhouse in its own right, but it’s also a major supplier apple. The consumer technology giant It was TSMC’s largest customer in 2021 and accounted for a quarter of the company’s revenue last year. This year, the number is expected to be even higher as TSMC expects more room for growth in other sectors such as the automotive market.
Apple is also Berkshire’s largest stock holding, accounting for about 40% Stock portfolio worth more than $300 billion. It is quite common for Berkshire to find shares through existing companies it operates or owns. For example, a company lends its investment to a cloud storage company. Snowflake its insurance brand Geico was one of Snowflake’s clients for a while. We know that Buffett and Berkshire really love Apple, so this investment makes perfect sense.
He buys seven others and sells six
In addition to TSMC, Berkshire also bought shares in seven other companies, two of which were new additions to the portfolio.
First Louisiana-Pacific Corp. (LPX -1.80%), a supplier of materials to the home building industry. Shares rose more than 10% in after-hours trading. Many home builders are struggling to source materials due to supply chain issues and are also dealing with higher construction costs. Buying about 5.8 million shares for more than $300 million in shares could be one way to invest in the industry’s growth.
Berkshire also interestingly took a very small stake in the investment bank – $12.8 million Jefferies Financial Group (JEF -1.76%), which rose 5% in after-hours trading. Investment banks have struggled this year due to a slowdown in equity and debt underwriting. But Jefferies believes it has recently gained market share and is now trading at a fairly cheap price around its tangible book value.
Other purchases in the quarter consisted of existing positions. Not surprisingly, Berkshire continued to bet on US oil with its purchases Occidental Petroleum (OXY -1.41%) and Chevron (CVX 0.05%) in the quarter. Berkshire increased its stake in Occidental by about 22.6%.
Berkshire also significantly increased its stake in the media giant Paramount Global (PARA -1.70%) increased by more than 16% in the quarter. Finally, Berkshire increased its stake in the home furnishings company RH (RH -2.10%) and a chemical company Celanese (CE -5.03%) about 8.8% and 6% respectively.
In addition to the purchase, Berkshire sold six stocks in the quarter, including its entire position in the real estate investment trust. STORE Capital (STOR), which should come as no surprise given that the company was purchased. Berkshire also significantly reduced its position in long-term holdings US Bancorp (USB -2.38%) and continued to cut that position after the third quarter, according to recent filings.
Other larger cuts made in the Berkshire quarter Bank of New York Mellon (BK -2.11%)decreased by about 14% and the video game company Activision Blizzard (ATVI -0.24%), about 12% of its current position. Berkshire made minor adjustments to holdings Kroger (KR -0.60%) and General Motors (GM -2.89%).
The result of all activity
Berkshire definitely made some moves in the third quarter, though less than it seems. The biggest move was buying a stake in TSMC and selling a large position in US Bancorp. Selling STORE Capital made sense and buying more oil stocks has been an ongoing theme this year.
While Berkshire has made some notable cuts, Buffett and the rest of the company could simply right-size the portfolio to prepare for a tougher economy in 2023. However, if Berkshire eventually moves to completely exit any of the holdings, it will be worth watching. Sold as US Bancorp, it would certainly be possible.
Bram Berkowitz has no position in any of the stocks listed. The Motley Fool, Activision Blizzard, Apple, Berkshire Hathaway (B shares), Jefferies Financial Group Inc., STORE Capital, Snowflake Inc. and holds and recommends positions in Taiwan Semiconductor Manufacturing. The Motley Fool recommends RH and recommends the following options: January 2023 Berkshire Hathaway $200 calls (B shares) Apple March 2023 $120 calls Berkshire January 2023 short $200 on Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares) and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.