By The Sizemore Letter
It’s that time again. Warren Buffett’s Berkshire Hathaway (BRK-A) released its quarterly 13F filing today, which details stock by stock what Buffett and his managers have been buying and selling.
At the top of the list? A 17.8-million-share position in Suncor Energy (SU), Canada’s biggest oil and gas producer. Suncor is a major producer in the Alberta oil sands, and this purchase is consistent with Buffett’s overall belief in a North American industrial renaissance.
Next is Dish Network (DISH), the satellite television provider. Berkshire Hathaway added 547,312 shares of Dish, worth about $24 million. The relatively small size of the acquisition indicates it was probably made by one of Buffett’s lieutenants and not the Sage himself. Still, given that Buffett’s two managers—Todd Combs and Ted Weschler—are front runners to take control of Berkshire Hathaway’s portfolio once Buffett eventually retires, the move is worth noting.
Dish is an odd addition for Berkshire Hathaway given that archrival DirecTV (DTV) is already in the portfolio and has been for a few years now. It’s even stranger when you consider the high drama surrounding Dish and its CEO Charlie Ergen and its failed bid to purchase Sprint (S) and Clearwire for their spectrum assets.
Ergen had grand ambitions of using Sprint’s bandwidth to create something of a wireless empire that would have included paid TV, phone service, and wireless internet…which sounds great, except that he would have been entering an already crowded market in all three services. And in any event, he got outbid.
Buffett is not known for endorsing great jumps into the unknown. Dish seems an odd addition to a generally conservative, staid portfolio. It’s highly-indebted, not particularly cheap, and operates in an industry in the middle of a transformation with a very uncertain outcome. I’m left scratching my head on this one.
In addition to Dish and Suncor, Buffett massively increased his position in General Motors (GM), adding about 60% to a position now worth $1.4 billion. Like Suncor, this move is more in line with Buffett’s belief in America’s industrial future. It’s also an established player in an old-line industry trading for a reasonable price. Classic Buffett.
And what did Buffett sell?
He cut his positions in packaged foods companies Kraft Foods (KRFT) and Mondelez (MDLZ) to nearly zero.
Until his next letter to shareholders comes out, we’re left to speculate as to why Buffett unloaded these two. My guess is simply that he wanted to free up cash for another big purchase.
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