Buffett increases stake in IBM
18 May 2015
Berkshire Hathaway increased its stake in IBM, Fargo & Co and Bancorp Bank, some of the favourite companies of billionaire chairman Warren Buffett, in the first quarter according to a regulatory filing Friday which detailed its US stock portfolio as of 31 March.
Buffett's deputies cut holdings in stocks including National Oilwell Varco Inc, while no new companies were listed in the portfolio.
While Buffett's skill at picking stocks is well-known his investment portfolio at Berkshire had become less important with the company shifting toward buying whole businesses.
Equities had also become more expensive. The Standard & Poor's 500 Index was on track to increase for the 10th straight quarter.
Buffett upped his IBM holding 3.4 per cent to 79.6 million shares, sending his stake to $12.8 billion at the end of the first quarter.
Buffett said at Berkshire's annual meeting this month that he had added to the IBM stake despite its revenue slump, but did not say how many shares he acquired.
The Wells Fargo investment rose 1.5 per cent to 470 million shares and was valued at over $25 billion at the end of March. The US Bancorp stake was up by 4.6 per cent to 83.7 million shares and is valued at $3 billion.
On the basis of IBM's average price of around $160 per share during the quarter, Buffett increased his investment in IBM in the first quarter by aruond $400 million. At the end of the first quarter, Berkshire's IBM holdings stood at 79.5 million shares of the company, for a stake worth nearly $13 billion.
With IBM's shares down 14 per cent last year, many had not shared Buffett's bet on the company. IBM had aggressively used cash to buy back its stock, a move Buffett had often criticised companies about.
At Berkshire's recent annual meeting, during the near day-long question and answer session, in response to queries regarding this, Buffett's long-time investment partner Charlie Munger responded that IBM was a wonder company and that many of Berkshire's best investments had had reversals in the past.
At this year's Berkshire annual meeting, where Buffett's many companies displayed their wares often for sale, got to challenge IBM's Watson to a game of Jeopardy, and taste food prepared using recipes created by the super computer.