What Buffett's Buying and Selling
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Warren Buffett's Berkshire Hathaway (NYSE: BRK-A) released it's second quarter report this August and Berkshire Hathaway has sold on many of it's massive holdings, while buying new positions in other sectors like energy and banking.
Buffett and his team of stock pickers sold nearly two thirds of their shares in Johnson and Johnson (NYSE: JNJ), one of Buffett's long time holdings, leaving just over 700 million dollars in the company. Johnson and Johnson has sustained, and grew, it's free cash flow but it's net income dropped sharply in the second quarter and it lowered it's FY 2012 earnings per share estimates on a string of lawsuits and recalls that have cost Johnson and Johnson over three billion dollars.
Berkshire also sold just over 19% of it's stake in Procter and Gamble (NYSE: PG), another of it's long term investments, leaving around 59 million shares in the international consumer products company and 25% of it's shares in Kraft (NASDAQ: KRFT), again leaving around 59 million shares worth nearly 2.5 billion dollars.
Buffett does not need the money to purchase more shares, and many investors, including Thomas Russo, a famous money manager and Berkshire Hathaway shareholder believe that the selloff is to provide Buffett's team with more money to invest. Todd Colmes and Ted Weschler, Berkshire's new stock pickers now have over 4 billion dollars each to invest in new companies like Phillips 66, a spinoff company of another Berkshire held company, ConocoPhillips, and National Oilwell Varco. Both of these new positions are in the energy sector, suggesting confidence in the future of oil and natural gas.
Berkshire also added slightly to it's positions in Wells Fargo, Bank of New York Mellon and IBM. Berkshire has increased it's holding in Bank of New York Mellon (NYSE: BNY) nearly ten times in the past year and is being followed by many other famous value investors including Don Yacktman.
In the second quarter of 2012, Berkshire Hathaway sold approximately 3 billion dollars worth of stocks and bought just over 1.8 billion dollars. The recent selloff of it's holdings could mean Buffett is raising capital for it's new investors and possibly to find a new investor to direct the company, when Buffett and his longtime friend Charlie Munger leave the company.
athorburn has no positions in the stocks mentioned above. The Motley Fool owns shares of Berkshire Hathaway and Johnson & Johnson. Motley Fool newsletter services recommend Berkshire Hathaway, Johnson & Johnson, and The Procter & Gamble Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.