A Few Berkshire Stocks to Look Into After Latest 13F Filing

Warren Buffett, the most quoted living value investor, has dropped Berkshire Hathaway’s 13F portfolio filing for the third quarter. Required by the Securities and Exchange Commission (SEC), the 13F form provides market transparency as investment managers with at least $100 million AuM give the public a wide range of signals.

As of the latest update on Sunday, the New York Fed’s recession probability reads 46.11%, 20 points lower than in September. Berkshire Hathaway’s portfolio aligned with this quarterly recessionary sentiment as a net stock seller. 

This includes reducing positions across consumer staples, entertainment, automotive, oil, and shipping companies. Procter & Gamble (PG), Johnson & Johnson (JNJ), General Motors (GM), Activision Blizzard (ATVI), and United Parcel Service (UPS) all underwent a 100% exposure reduction. 

In contrast to these full divestments from Berkshire’s portfolio, Chevron (CVX) and Amazon (AMZN) experienced modest ousting at 5.22% and 10.45% stock selloffs, respectively. Apple (AAPL) remains Buffett’s largest stake, weighing around half of the entire portfolio at 915.56 million shares ($156.75 billion at the time of filing).

Given the net divestment for the quarter, do new positions themselves serve as a market signal, or do they? Here are three stock points of interest.

Occidental Petroleum Corporation (OXY)

For Q3, Berkshire Hathaway loaded 3.92 million more OXY shares, increasing its portfolio weight to 4.64% with 228.05 million OXY shares owned. The average buy price was $49.86 vs. the current $62.08 per share.

Although vulnerable to geopolitical risks as a commodity supplier, Occidental’s diversified business model across regions and hydrocarbon products managed to mitigate it. Zoomed out year-to-date, OXY gains remain largely flat, at +1.69%. In November 2020, the oil giant became fully ESG compliant, committing to “net-zero emissions” by 2040.

In Q3 2023 earnings, Occidental outperformed the Zacks consensus of 89 cents earnings per share (EPS) significantly, at $1.18 EPS. Likewise, the company’s revenue of $7.4 billion beat the $7.195 billion estimate. 

Based on 20 analyst inputs pulled by Nasdaq, OXY stock remains a “buy.” The average OXY price target is $71.21. The high estimate is $82, while the low estimate of $60, which is not far from the current OXY price of $62.08 per share. 

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Liberty Media Corp (LLYVK) and SiriusXM (SIRI)

Predictably, series C Liberty Live (LLYVK) and series A Liberty Live (LLYVA) experienced a sharp bump on Wednesday. Yet, the gains flattened on the same day. Berkshire Hathaway filed these positions as new buys at 11,132,590 million (LLYVK) and 5,051,918 million (LLYVA).

Liberty Media holds exclusive commercial rights to the FIA Formula One World Championship as a holding company. Alongside this, Liberty Live Group (LLG) is in the live event production business. Under the LLG umbrella is the world’s largest live music companies, Live Nation and Ticketmaster.

Furthermore, Liberty Media is the largest SiriusXM (SIRI) shareholder. SiriusXM services over 34 million subscribers as the largest North American satellite radio broadcasting company. Another stock that entered Berkshire’s portfolio was Atlanta Braves Holdings (BATRA), also tied to Liberty Media Corporation as a wholly-owned subsidiary.

These three stocks appeared on the filing, prompting their brief boost. However, once it became clear these existing holdings by Berkshire Hathaway (indirectly through Liberty Media Corporation) were reclassified as new, the three stocks began to flatten out.

Nonetheless, speculators had a field day. SIRI is still up 7% during the day. Based on 14 analyst inputs pulled by Nasdaq, SIRI stock is a “hold.” The average SIRI price target is $5.06 vs the current $5.24. The high estimate is $7 vs the low forecast of $3.7.

Kraft Heinz (KHC)

Neither increasing nor decreasing exposure to this iconic food company, Berkshire Hathaway continues to hold $10.95 billion worth of KHC shares. As of the latest Q3 earning figures, Kraft is experiencing stagnancy. Net sales increased by only 1%, while net income decreased by 41.7%.

Likewise, the diluted earnings per share (EPS) is down 40% to $0.21. This is unsurprising as Kraft brands have been losing sales steam over the years. Nonetheless, the company’s debt-to-equity ratio has been steadily declining, from 0.56 in December 2020 to a moderate 0.40 this September. 

Ahead of a new leadership change effective January 1st, 2024, Kraft Heinz is looking to deploy new product lines to spur growth. Based on 17 analyst inputs pulled by Nasdaq, KHC stock is a “buy”. The average KHC price target is $36.65 vs the current $33.49. The high estimate is $43, while the low forecast is $29 per share.

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