GE Sale Is the Standout in Berkshire's Portfolio
Most of the changes to the firm's stock holdings were as expected, but the sale out of GE was somewhat surprising.
Wide-moat-rated
We'd already known about the additional purchases of Apple (with 0.8 million more shares picked up for an estimated $120 million) and further reductions of IBM (10.5 million shares sold for around $1.7 billion). The same is true for sales of Wells Fargo, with 11.7 million shares sold for an estimated $650 million (bringing the firm's ownership stake below the 10% threshold required by the Federal Reserve), as well as Berkshire's purchase of Store Capital (18.6 million shares for $377 million).
Trimmings of United Continental (740,000 shares for around $54 million), Delta Air Lines (1.9 million shares for some $95 million), and American Airlines (2.3 million shares for an estimated $106 million) did not surprise us too much, as we've believed all along that Berkshire's purchase of shares in all four of the major airlines late last year was more of a trade than a long-term commitment to the industry.
Meanwhile, the elimination of Berkshire's stake in General Electric (with 10.6 million shares sold for an estimated $300 million) and its near elimination of Wabco Holdings (with 2.8 million shares sold for an estimated $350 million) did come as a bit of a surprise, but were more likely holdings of CEO Warren Buffett's two lieutenants--Todd Combs and Ted Weschler--who have a different incentive structure and tend to trade more often.
The insurer looks to be staying invested in at least one GE legacy business, picking up 17.5 million shares of Synchrony Financial for an estimated $560 million. Berkshire also added to stakes in Bank of New York Mellon (17.2 million shares for around $845 million) and General Motors (10.0 million shares for some $350 million), and there was also some interchange among the firm's SiriusXM and Liberty Media SiriusXM holdings during the quarter.
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