2013 is yet another year getting off to a great start for stocks, and Berkshire Hathaway Inc. (NYSE: BRK-A) is actually outperforming the broad stock market so far in 2013. As of Tuesday, the S&P 500-tracking SPDR S&P 500 (NYSEMKT: SPY) is up about 6% and the DJIA-tracking SPDR Dow Jones Industrial Average (NYSEMKT: DIA) is up about 7%. With a 1% gain on Tuesday, Berkshire Hathaway Inc. (NYSE: BRK-A) A shares are up 9.3% and the Berkshire Hathaway Inc. (NYSE: BRK-B) B-shares are up by about 8.7%.
We have looked at the year-to-date performance of Warren Buffett's portfolio holdings of Berkshire Hathaway Inc. (NYSE: BRK-B) to see which stocks he has that are helping to drive gains so far in 2013. We looked through all of Warren Buffett's top stock holdings to identify the biggest winners. What is so interesting today is that the actual Berkshire Hathaway shares are outperforming about 90% of the actual stock holdings that make up the Buffett and Berkshire investment portfolio.
We have included the purchase or sale transaction history of each pick. We have also provided color and the implied upside to the Thomson Reuters consensus (mean) price target objective.
Phillips 66 (NYSE: PSX) remains a relatively new holding for team Buffett but was kept steady last quarter at 27.1 million shares worth more than $1.65 billion. It is also Buffett's top stock in 2013 so far with gains of more than 15%. We expect that the way Mr. Buffett talked so positively about this oil refinery that he may add to the position ahead. We expect upside to the 1.6% dividend yield and this trades with more implied upside as the $61.30 price is short of the consensus analyst price target of $66.38.
Procter & Gamble (NYSE: PG) has been on fire in 2013 and shares have been hitting new 52-week highs and this DJIA consumer products giant is up about 13.5% so far in 2013. What is interesting is that Mr. Buffett had been lowering his stake and it had fallen by nearly half of its share amount down to 52.8 million shares. That number may be even lower ahead as Buffett tends to keep selling stocks he starts selling out of. If the position is somehow static, that position would be worth more than $4 billion. This hit a 52-week high on Tuesday above $76.50 and the consensus analyst price target is $78.75 with a 3% dividend yield as of now.
We have two runner-ups which we are not formally counting as Buffett's best performing stocks even though they have been in the holdings before. United Parcel Service, Inc. (NYSE: UPS) is technically the third best position in the Team Buffett portfolio, but there is just one small problem. This had been almost entirely eliminated down to 59,400 shares from 261,900 shares last quarter and versus 1.429 million shares two quarters ago. That being said, this 9% gain year to date is almost immaterial for Berkshire's $242 billion market cap. Ingersoll-Rand (NYSE: IR) is yet another one which would have been great had Buffett remained on its side, but he has sold out of that position in late 2012 as well. That is too bad as this was up 8% year to date in 2013.
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Deere & Co. (NYSE: DE) is actually a new position for Berkshire Hathaway of about 4 million shares worth about $375 million or so today. As Deere & Co. has a market cap of over $36 billion, Buffett could certainly add exponentially to his stake here without rocking the wagon too much. Deere is up by about 8.5% so far in 2013 and the price of $93.75 still has upside if the $96.00 consensus analyst price target turns out to be accurate.
Verisk Analytics Inc. (NASDAQ: VRSK) was a new position, but after growing that Berkshire Hathaway's new portfolio managers already trimmed that stake down. As of the last quarterly report Verisk was down to only 1.563 million shares worth close to $80 million. This was next on the list of Buffett's top stock performers in 2013 with gains of about 7.5% year to date. With shares around $55 now, this is now right at the consensus price target of $55.55 for this risk and analysis provider to the insurance industry.
Torchmark Corp. (NYSE: TMK) is the last of the reviewed gainers for the best performing stocks out of Buffett's 2013 holdings. This insurance stock holding was the same as the prior quarter at a stake of about 4.2 million after having been raised in prior quarters. This was up about 7% year to date and is worth more than $220 million. With shares around $55 now, the consensus analyst target price is almost $58.73.
Lee Enterprises Inc. (NYSE: LEE) was yet another top percentage gainer but it also is one which Warren Buffett and team have already reduced down to only 1.13 million shares from 3,225,822 shares shown initially. This holding was one that Buffett had asked for confidentiality treatment on in his newspaper endeavors. The gain here is 8.8% year to date, but the position is so small on dollar terms at $1.24 per share that it is not even worth noting as it pertains to the Buffett portfolio dollars. That being said, this is another gainer that is less of a stake for Berkshire Hathaway.
International Business Machines Corp. (NYSE: IBM) has been raised by Mr. Buffett as a larger position and this was listed as over 67.5 million shares at the last available date. That was up slightly from 66.63 million shares from the previous quarter and versus the prior quarter before that at 64.395 million shares. It is likely that Buffett has been writing put options to grow its stake. This IT-giant is up 6.4% so far in 2013 for Mr. Buffett and his stake here is worth more than a whopping $13.7 billion to Berkshire Hathaway. Berkshire is now the largest shareholder of IBM and the $203 share price still has much implied upside to the consensus analyst target price of $225.76.
It is rare that Berkshire Hathaway Inc. (NYSE: BRK-A) outperforms the stock market. While it is a conglomerate and has many aspects of a holding company, there is also a lot of characteristics here that make investors think they have some bond market safety as well.
Buffett's newest round of stock holdings should be out in mid-February and his most recent holdings can be seen in full here. We tracked the changes each quarter on each position.
After having reviewed and compiled the Berkshire Hathaway winners and losers, there is one thing that surfaced as an obvious lesson: just because Warren Buffett sells out of a stock it does not automatically mean that you should turn your back on those companies.
Filed under: 24/7 Wall St. Wire, Activist Investor, Banking & Finance, Buffett, Compensation, Conglomerates, Consumer Goods, Consumer Product, Corporate Governance, Defensive Stocks, Dividends & Buybacks, ETFs & Mutual Funds, Mutual Funds, Personal Finance Tagged: BRK-A, BRK-B, DE, featured, IBM, IR, LEE, PG, PSX, TMK, UPS, VRSK