Two Big Surprises from Warren Buffett’s Q3 Portfolio Moves

When Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) makes changes to its portfolio, it is typically of interest to investors due to the stock-picking prowess of chairman and CEO Warren Buffett. Of course, he’s one of the most successful investors in the world, so the decisions he and his team make each quarter can move the markets and help inform investors’ decisions.

Even though Buffett rarely, if ever, goes into detail about why he made one move or another, investors can use his decisions as a jumping-off point to do their own research on specific stocks.

Berkshire’s third-quarter filing with the Securities and Exchange Commission, known as the 13F, revealed a couple of changes that may come as a bit of a surprise to those who follow Buffett’s moves regularly.

Selling off long-time holdings

The 13F moves as of Sept. 30 show no surprises at the top as Apple (NASDAQ:AAPL) remains Berkshire’s far-and-away largest position, accounting for 50% of the firm’s total assets even though it lost 12% of its value in the quarter.

In fact, Berkshire Hathaway’s overall portfolio lost about 10%, falling to $313 billion.

Bank of America (NYSE:BAC) is a distant second place at 9%, followed by American Express (NYSE:AXP) at 7.2% and Coca-Cola (NYSE:KO) at 7.1%. Although Berkshire’s fifth-largest holding, Chevron (NYSE:CVX), remains the same, Buffett sold off about 12 million shares or 10% of the stock.

Some of the big surprises this past quarter were some of the long-time holdings that he completely sold off, including General Motors (NYSE:GM). Berkshire Hathaway had owned 22 million shares of GM stock, but Buffett zeroed it out, selling all 22 million shares. It had been in the portfolio since 2012 and was the 24th-largest position.

He also exited three other long-time holdings: Proctor and Gamble (NYSE:PG), Johnson and Johnson (NYSE:JNJ), and food company Mondelez International (NASDAQ:MDLZ). Buffett had held P&G since 2005, Johnson and Johnson since 2006, and Mondelez since 2007.

He also cleared out of UPS (NYSE:UPS) entirely, along with Celanese Corp (NYSE:CE). Of course, Activision Blizzard is no longer trading after it was acquired by Microsoft in October, so Berkshire’s latest 13F also showed that as an exited position.

While Buffett still holds 10 million shares of Amazon (NASDAQ:AMZN), he sold 5% of that stake in the third quarter. He also sold 15% of his holdings in HP Inc. (NYSE:HPQ) and 5% of his position in Aon (NYSE:AON). While he had much smaller positions in Markel (NYSE:MKL) and Globe Life (NYSE:GL), Buffett sold off big chunks of them, 66% and 67%, respectively.

Home of the Braves

Perhaps the most surprising move this past quarter was Buffett taking an ownership stake in the Atlanta Braves (NASDAQ:BATRK) baseball team. He purchased about 223,000 shares, amounting to an $8 million stake. Buffett had indirectly owned the team in the past, as it had been a subsidiary of Liberty Media, a stock he owns.

In fact, Buffett added to his holdings in Liberty Media by taking new positions in two of its tracking stocks, Liberty SiriusXM Group (NASDAQ:LXSMA) (NASDAQ:LXSMK) and Liberty Live Group (NASDAQ:LLYVA) (NASDAQ:LLYVK). Such stocks track the economic performance of a particular business or group within the company rather than the whole company.

The other new position Buffett established in Q3 was in satellite radio company Sirius XM (NASDAQ:SIRI), in which he bought about 9.7 million shares, amounting to a $44 million stake. Sirius XM stock jumped some 17% after Berkshire’s 13F was posted, climbing to $5.62 per share, although it has since dropped back to $4.92 per share.

One final but important note is that Buffett and his team requested “confidential treatment” for at least one of their new holdings, so it was omitted from the 13F. This type of request is only allowed in certain cases in which revealing the name could result in a competitive disadvantage. However, there is a time limit attached to it, so this position will likely come out in future filings.

Overall, Berkshire Hathaway’s latest 13F shows more sell-offs than adds, which boosts the massive pile of cash that Buffett has on the sidelines to a new record of about $157 billion. It will be interesting to see how he and his team put it to use.