Warren Buffett Dumps Wells Fargo, Picks Up Citigroup

Summary

• The guru entered eight new positions during the quarter, including two that were previously disclosed.
• He sold out of AbbVie
  
  ABBV
  , Bristol-Myers Squibb and Wells Fargo
  
  WFC
  .

Warren Buffett (Trades, Portfolio)’s multibillion-dollar conglomerate, Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), disclosed its equity portfolio for the first quarter of 2022 on Monday.

With a hefty cash pile of over $140 billion to spend on stocks at the end of 2021, the renowned guru and his two portfolio managers, Ted Weschler and Todd Combs, disclosed a new stake in Occidental Petroleum

OXY
Corp. (OXY, Financial) in March, which he has since added to. He also established a holding in HP

HPQ
Inc. (HPQ, Financial).

During the annual meeting, Buffett revealed he doubled down on the Apple

AAPL
Inc. (AAPL, Financial), Chevron

CVX
Corp. (CVX, Financial) and Activision Blizzard

ATVI
Inc. (ATVI, Financial) positions.

Other notable buys for the quarter that were reported in the 13F filing included new investments in Citigroup

C
Inc. (C, Financial), Parmount Global (PARA, Financial), Celanese

CE
Corp. (CE, Financial), McKesson

MCK
Corp. (MCK, Financial), Markel

MKL
Corp. (MKL, Financial) and Ally Financial

ALLY
Inc. (ALLY, Financial). He also added to Liberty Formula One Group (FWONK, Financial), Floor & Décor Holdings Inc. (FND, Financial), RH (RH, Financial) and General Motors

GM
Co. (GM, Financial).

In contrast to previous quarters, the value investor was a less active seller, paring back Verizon Communications

VZ
Inc. (VZ, Financial) and STORE Capital Corp. (STOR, Financial), along with two other existing investments, and selling out of AbbVie Inc. (ABBV, Financial), Bristol-Myers Squibb Co. (BMY, Financial) and Wells Fargo & Co. (WFC, Financial).

Investors should be aware that the 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but the reports can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.

Berkshire’s five largest holdings, accounting for over half of the equity portfolio, are Apple, Bank of America

BAC
Corp. (BAC), American Express

AXP
Co. (AXP), Chevron and The Coca-Cola

KO
Co. (KO).

The guru’s $­363.55 billion equity portfolio consisted of 49 stocks as of March 31. A majority of the portfolio was invested in technology stocks at 45.03%, while the financial services sector has a weight of 27.19% and the consumer defensive space represents 11.29%.

Occidental Petroleum

As previously reported, Buffett disclosed a 29.8 million-share stake in Occidental Petroleum (OXY, Financial), which has since been increased to over 143 million shares. The stock traded for an average price of $44.01 during the quarter.

The position currently occupies 2.26% of the equity portfolio and is now his eighth-largest holding.

The Houston-based oil and gas producer has a $64.31 billion market cap; its shares were trading around $67.57 on Tuesday with a price-earnings ratio of 9.97, a price-book ratio of 4.25 and a price-sales ratio of 2.25.

The GF Value Line

VALU
suggests the stock is significantly overvalued currently based on historical ratios, past financial performance and future earnings projections.

HP

As reported last month, the Oracle of Omaha entered a 104.5 million-share stake in HP (HPQ, Financial), allocating it to 1.04% of the equity portfolio. The stock traded for an average price of $36.94 per share during the quarter. He has since increased the holding to 120.9 million shares.

The personal computing and printing company has a $40.45 billion market cap; its shares were trading around $38.26 on Tuesday with a price-earnings ratio of 6.86 and a price-sales ratio of 0.69.

The GF Value Line indicates the stock is modestly overvalued currently.

Apple

As he told Becky Quick, the guru snatched up 3.8 million shares of Apple (AAPL, Financial) after a three-day decline, impacting the equity portfolio by 0.18% and expanding the position 0.43%.

He now holds 890.9 million shares total, accounting for 42.79% of the equity portfolio. GuruFocus estimates he has gained 281.89% on the investment so far, which remains his largest holding.

The tech giant headquartered in Cupertino, California, which is known for its electronics like the iPhone, iPad and Apple Watch, has a market cap of $2.39 trillion; its shares were trading around $147.91 on Tuesday with a price-earnings ratio of 24.01, a price-book ratio of 35.57 and a price-sales ratio of 6.36.

According to the GF Value Line, the stock is modestly undervalued currently.

Chevron

With an impact of 5.42% on the equity portfolio, the investor boosted the Chevron (CVX, Financial) stake by 316.21%, buying 120.9 million shares. During the quarter, the stock traded for an average per-share price of $143.03.

He now holds ­159.17 million shares total, accounting for 7.12% of the equity portfolio. GuruFocus estimates he has gained 30.52% on the investment so far, which is now his fourth-largest holding.

The San Ramon, California-based energy giant has a $343.74 billion market cap; its shares were trading around $174.95 on Tuesday with a price-earnings ratio of 16.45, a price-book ratio of 2.34 and a price-sales ratio of 1.91.

Based on the GF Value Line, the stock appears to be modestly overvalued currently.

Activision Blizzard

Impacting the equity portfolio by 1.10%, Buffett boosted the Activision Blizzard (ATVI, Financial) stake by 338.77%, buying 49.6 million shares. The stock traded for an average price of $77.76 per share during the quarter.

Berkshire now holds 64.3 million shares total, which represent 1.42% of the equity portfolio and is now the 10^th-largest holding. GuruFocus data shows he has gained an estimated 3.68% on the investment so far.

The video game publisher headquartered in Santa Monica, California, which is being acquired by Microsoft

MSFT
Corp. (MSFT), has a market cap of $61.14 billion; its shares were trading around $78.12 on Tuesday with a price-earnings ratio of 24.74, a price-book ratio of 3.43 and a price-sales ratio of 7.39.

The GF Value Line suggests the stock is currently fairly valued.

Citigroup

Berkshire entered a 55.15 million-share stake in Citigroup (C, Financial), dedicating 0.81% of the equity portfolio to the holding. Shares traded for an average price of $61.89 each during the quarter.

The New York-based bank has a $98.56 billion market cap; its shares were trading around $50.74 on Tuesday with a price-earnings ratio of 5.99, a price-book ratio of 0.56 and a price-sales ratio of 1.44.

According to the GF Value Line, the stock is modestly undervalued currently.

Verizon

The Verizon (VZ, Financial) position was slashed by 99.13%, with Berkshire selling 157.4 million shares. The transaction had an impact of -2.47% on the equity portfolio. During the quarter, the stock traded for an average per-share price of $52.99.

The firm now holds 1.4 million shares, which represent 0.02% of the equity portfolio. GuruFocus data shows he has lost an estimated 8.73% on the investment so far.

The telecommunications company headquartered in New York has a market cap of $206.01 billion; its shares were trading around $49.06 on Tuesday with a price-earnings ratio of 9.53, a price-book ratio of 2.45 and a price-sales ratio of 1.52.

Based on the GF Value Line, the stock appears to be modestly undervalued currently.

AbbVie

The firm sold its 3.03 million remaining shares of AbbVie (ABBV, Financial), impacting the equity portfolio by -0.12%. The stock traded for an average price of $145.09 per share during the quarter.

According to GuruFocus, Berkshire gained 25.76% on the investment over its lifetime.

The Chicago-based biotech company has a $274.13 billion market cap; its shares were trading around $154.96 on Tuesday with a price-earnings ratio of 22.3, a price-book ratio of 16.86 and a price-sales ratio of 4.87.

The GF Value Line suggests the stock is currently modestly overvalued.

Wells Fargo

Having gradually reduced the holding over the past several years, Buffett dumped his remaining 675,054 shares of Wells Fargo (WFC, Financial), which had an impact of -0.01% on the equity portfolio. During the quarter, shares traded for an average price of $53.63 each.

The long-held investment, which at one point was the guru’s largest position, generated a 62.40% return based on GuruFocus data.

The bank, which is headquartered in San Francisco, has a market cap of $163.83 billion; its shares were trading around $43.23 on Tuesday with a price-earnings ratio of 8.99, a price-book ratio of 1.03 and a price-sales ratio of 2.24.

According to the GF Value Line, the stock is modestly undervalued currently.

See the rest of Buffett’s portfolio here.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.