What to Expect From Warren Buffett’s 13F This Week

By: Wayne Duggan

This is a big week for followers of the Oracle of Omaha. The Berkshire Hathaway CEO will file his quarterly 13F with the SEC in accordance with Thursday’s deadline, giving the market its first glimpse of which stocks Buffett was buying and selling in the fourth quarter.

13F filings are always potential market movers, but the Berkshire Hathaway 13F, in particular, is the most likely to induce some major market reactions. The market will be watching closely to see which stocks Buffett bought and sold last quarter, as well as potential trends among the so-called “smart money” fund managers.

Why 13F Day Is A Major Trading Opportunity

With that in mind, let’s take a look at where the Berkshire Hathaway portfolio stood as of its last 13F filing.

Trends to Watch

The market will be watching for any changes to the following trends from Buffett this week:

  • Last quarter, Buffett was an aggressive buyer of banks, taking new stakes in JPMorgan Chase and PNC, and adding to stakes in Bank of America, U.S. Bancorp, Goldman Sachs, and Bank of New York Mellon
  • What does he do with the airliners? Buffett’s 2016 bet on airline stocks—specifically United, Delta, American, and Southwest—caught many by surprise. With the sector struggling it’ll be interesting to see if he adds or cuts to his stake in any of those names.
  • Buffett will likely continue dialing back his Phillips 66 stake. After selling 19.2 million shares in Q3, Berkshire’s remaining Phillips 66 stake was down to just 15.4 million shares.
  • Buffett continued his trend of adding to his stake in General Motors last quarter, the only U.S. auto stock that Berkshire holds.
  • Teva Pharmaceutical was a surprise buy in Q1 of 2018, but after adding shares in Q2 Buffett did not buy more Teva in Q3. Traders will be watching to see if Buffett resumed his buying in Q4.
  • Are any changes made to his Apple stake? It remained the largest holding in his last filing, nearly double the value of his second-largest holding, Bank of America.

The Buffett Bump

It’s worth noting that Buffett’s long-term approach to investing usually means his buying and selling tends to carry on for multiple quarters. For example, Buffett began buying Apple back in Q1 of 2016 when Berkshire purchased 9.8 million shares at a price of around $90. Apple shares immediately jumped 4 percent on the news as traders speculated that Buffett’s initial investment in Apple may be just the tip of the iceberg.

Buffett then proceeded to consistently add to his Apple stake over the next two years. As a result, he now holds 252.4 million shares of Apple, as of his last 13F filing, worth approximately $44 billion. Since Buffett took a stake, Apple shares have risen 92 percent to the S&P 500’s 33 percent gain.

Of course, Buffett’s buying is a vote of confidence from one of the most successful investors of all time, but Berkshire has such deep pockets that investment in certain companies can have the same type of effect as a buyback program. In the case of Apple, Berkshire has effectively reduced Apple’s public float by about 5 percent, helping prop up the company’s share price.

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Disclosure: The author holds no position in the stocks mentioned.

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