Buffett Bought More Activision & Formula 1 - Berkshire Hathaway Q1 2022 Portfolio Analysis

Berkshire Hathaway Q1 2022 Portfolio: Buffett’s Huge Bets On Activision & Chevron

Warren Buffett and Berkshire Hathaway found way more exciting stock opportunities in Q1 2022 because they invested $40 Billion into equities that I review and discuss in this video.

Video Contents:
-Berkshire Shopping Spree In Q1 2022
-Berkshire Bought 15 & Sold 7 Stocks
-Berkshire’s Deployable Cash
-Top 10 Starting With Apple
-Chevron & Occidental Petroleum
-Activision Blizzard Arbitrage
-Hewlett Packard (HPQ)
-Kroger, Wells Fargo, Citi, Ally
-GM, Celanese, McKesson
-Verizon & Paramount
-Real Estate & Pharma
-Liberty Media Formula 1 & Markel

Berkshire started 2022 with about $144 billion and mostly went on an equity shopping spree in March 2022 by sealing the Alleghany Corporation (Y) acquisition deal at $11.6B, buying $7.13B of Occidental Petroleum (OXY) at an estimated average price of $52.29 per share, and around $4.3B into Hewlett Packard (HPQ) at an estimated average price of $36.20 per share.

When Berkshire’s 13F equity holdings came out on Monday, May 16, it revealed that Berkshire bought 15 stocks and sold 7 stocks, which sort of reminds me of rugby rules as a fun aside.

Berkshire’s equity portfolio added a net new of 5 positions from 44 to 49 and increased from $331B in Q4 2021 to $363.5B in Q1 2022, which seems like a net increase of almost $33B but we know that Berkshire invested about $40B into equities in the first quarter so far. This is a third of their deployable cash pile since they hold onto $30B for cash cushion safety purposes.

Not yet hitting bear market territory like the S&P 500 has, but also not immune to market volatility, Berkshire’s stocks are off 16% from their all time highs, where on May 16 BRKA was at $456.5K per share and BRKB was at $304 per share.

After having sold 57 million shares of Apple in Q4 2020, Berkshire bought back 3.8 million AAPL and I estimate invested about $587M, making their Apple stake’s market value to be around $155.5B.

Berkshire’s heavy investment into Chevron made it jump into their 4th biggest position from almost $5B in Q4 to now around $26B in Q1, so I’m guessing Buffett is looking forward to collecting some of that sweet dividend money from Chevron and OXY’s warrants and stocks.

At the Berkshire Hathaway 2022 Annual Meeting, Buffett clarified that some news articles sometimes wrongly attribute who is buying stocks — it could be Buffett or one of his investment managers. But in the case of Activision Blizzard (ATVI), his managers bought it initially in Q4, but then he loaded up even more in Q1 with a market value of around $5.15B in what could be an attractive arbitrage/workout opportunity. If Microsoft gets approved to acquire ATVI at $95 per share by June 2023, then investors now could potentially earn a cool 19% on a stock currently trading at $77 per share as of May 20. Not advice tho just for information.

Berkshire reduced their position in supermarket chain Kroger, where I’m guessing inflation is eating at tight grocery store margins.

Berkshire liquidated their remaining Wells Fargo stake of $38M, which many were talking about but I actually had assumed they would’ve sold off WFC a long time ago given Buffett’s admonishment of their mistakes.

Berkshire may not be bullish on Wells Fargo, but they are on Citigroup in which they invested $2.95B and Ally Financial at $390M.

In what I’m chalking up to “buy American,” Berkshire added to their GM stake, and bought new positions of $1.1B in Celanese (a specialty materials and chemical innovation company out of Texas) and $900M into McKesson, a medical supply and pharmaceutical distributor.

I am not sure what Verizon did, whether it was delays in their 5G rollout or something else, but Berkshire reduced their stake in VZ by 99%, going from an $8.25B size to only $70M now. They didn’t change their T-Mobile stake which remains at $670M.

In lieu of Verizon, however, maybe Berkshire partially replaced them with Paramount Global in which the invested $2.6B.

Berkshire’s turning somewhat bearish on real estate by significantly reducing their position in STORE Capital, a REIT out of Arizona but they are bullish on home building and home renovation services and goods because they added to their positions in Restoration Hardware (RH) and Floor & Decor (FND).

Berkshire seems very bearish on pharma as they heavily reduced their stake in Royalty Pharma (RPRX) and totally sold out of AbbVie and Bristol-Myers Squibb.

And in maybe saving the best 2 for last, Berkshire continued to add to their Formula 1 Liberty Media Group (FWONK) from $134M in Q4 2021 to $539M in Q1 2022, which is another investment of around $405M. They also have a $12M stake in Liberty Latin America. So if you’re into Formula 1 high class racing, this may be something to look into.

Berkshire seems to have entered a new position and given a vote of approval to Markel Corporation (MKL) by buying 420,293 shares at a market value of $620M by end of March 2022. Markel was founded in 1930, the same year that Buffett was born, and is like a mini Berkshire in that they have a trifecta of insurance, investment, and venture businesses.
I attended both the Markel Brunch in Omaha during the Berkshire meeting weekend and also Markel’s annual meeting in Richmond, VA and I look forward to studying this company more!

On a final note that I didn’t get to mention in the video, Buffett said he is not good at market timing because he was buying during the earlier/middle part of 2008, only for the massive drop to come in late 2008/early 2009. So lets see if Berkshire is buying in a bit early but hopefully their bets will still pay off in the long run.

If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.

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