Bill & Melinda Gates Foundation Trust’s Top Stock Positions Remain Intact, Save for Berkshire Hathaway Inc. (BRK.B) Stake

The Bill & Melinda Gates Foundation, which is believed to be the largest philanthropic organization in the world, was formally launched in 2000 by merging two other foundations: the William H. Gates Foundation and Bill and Melinda’s Gates Library Foundation. The Bill & Melinda Gates Foundation Trust and Cascade Investment LLC, which manages the personal wealth of Bill Gates, are managed by former bond-fund manager Michael Larson, who has been managing the so-called Gates funds since 1994. In the past several years, the Bill & Melinda Gates Foundation has supported numerous initiatives in education, world health and population, and community giving. In the not-so-distant past, Bill Gates thanked Mr. Larson for his outstanding investing skills, saying that “Melinda and I are free to pursue our vision of a healthier and better-educated world because of what Michael has done”. Although the Bill & Melinda Gates Foundation Trust operates as a charitable organization, Insider Monkey keeps tracks of this philanthropic institution because of its sizable equity portfolio and the remarkable stock picking skills of Michael Larson. So let’s have a look at the top five equity positions of this organization as of the end of the March quarter, of which only the largest holding was reshuffled during the first quarter.

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#5. Wal-Mart Stores Inc. (NYSE:WMT)

– Number of shares owned by Bill & Melinda Gates Foundation as of March 31: 11.60 Million

– Value of Bill & Melinda Gates Foundation’s holding as of March 31: $794.69 Million

The Bill & Melinda Gates Foundation Trust has 11.60 million shares of Wal-Mart Stores Inc. (NYSE:WMT) in its portfolio as of the end of the first quarter of 2016, which were aggregately worth $794.69 million at quarter-end. The untouched position accounted for 4.6% of the organization’s equity portfolio on March 31. The shares of the world’s largest retailer have advanced 10% since the beginning of 2016, partially owing to better-than-anticipates financial results for the first quarter released this week. Wal-Mart reported net income of $3.08 billion, or $0.98 per share, for the first quarter, ahead of analysts’ estimates of $0.88 per share. The bottom-line figure dropped from $3.34 billion, or $1.03 per share, recorded for the first quarter of 2015. The retailer’s same-store sales at U.S. stores increased 1% year-on-year, marking the seventh consecutive quarter of growth for the domestic business. Warren Buffett’s Berkshire Hathaway reported an ownership of 55.24 million shares of Wal-Mart Stores Inc. (NYSE:WMT) in its latest 13F.

#4. Caterpillar Inc. (NYSE:CAT)

– Number of shares owned by Bill & Melinda Gates Foundation as of March 31: 11.26 Million

– Value of Bill & Melinda Gates Foundation’s holding as of March 31: $861.81 Million

The philanthropic organization reported owning 11.26 million shares of Caterpillar Inc. (NYSE:CAT) through the latest round of 13Fs, which were valued at $861.91 million at the end of March, higher than $765.29 million a quarter earlier. The heavy-machinery maker has seen its market value gain 2% since the start of 2016. Hedge fund manager David Einhorn of Greenlight Capital recently voiced his bearish views on Caterpillar at the Sohn Investment Conference in New York. The hedge fund manager believes the industrial-machinery maker may face tumultuous times ahead due to slowing demand for coal and the end of a boom in the iron ore industry. “We think Caterpillar will trade at somewhere around half of its current prices”, said Mr. Einhorn at the annual Sohn Conference. Just recently, Caterpillar reduced its 2016 top-line guidance to the range of $40 billion-to-$42 billion from $40 billion to $44 billion despite witnessing higher commodity prices and signs of revamped demand for construction equipment in China. Christopher A. Winham’s Tide Point Capital acquired a new stake of 500,000 shares of Caterpillar Inc. (NYSE:CAT) during the March quarter.

#3. Canadian National Railway (USA) (NYSE:CNI)

– Number of shares owned by Bill & Melinda Gates Foundation as of March 31: 17.13 Million

– Value of Bill & Melinda Gates Foundation’s holding as of March 31: $1.07 Billion

There were 17.13 million shares of Canadian National Railway (USA) (NYSE:CNI) in the philanthropic organization’s portfolio at the end of the first quarter. The stake was valued at $1.07 billion on March 31 and made up 6.2% of the fund’s portfolio. Just recently, Canada’s largest railway reduced the 2016 bottom-line forecast due to weaker-than-anticipated freight demand in certain markets, as well as the strengthening of the Canadian dollar against the green buck. As a result, the Montreal-based company currently anticipates 2016 earnings per share in line with last year’s figure, as compared to the previous guidance of mid-single digit EPS growth. Canadian National Railway’s revenues were impacted by lower shipments of energy-related commodities such as crude oil, frac sand, drilling pipe and semi-finished steel products, as well as reduced shipments of coal. The shares of the railway are up 3% year-to-date. Ken Fisher’s Fisher Asset Management upped its stake in Canadian National Railway (USA) (NYSE:CNI) by roughly 2% during the first three months of 2016 to 806,107 shares.

#2. Waste Management Inc. (NYSE:WM)

– Number of shares owned by Bill & Melinda Gates Foundation as of March 31: 18.63 Million

– Value of Bill & Melinda Gates Foundation’s holding as of March 31: $1.10 Billion

The Bill & Melinda Gates Foundation Trust has 18.63 million shares of Waste Management Inc. (NYSE:WM) among its pool of holdings as of March 31. The position in WM was worth nearly $1.10 billion at quarter-end and represented 6.4% of the organization’s public portfolio. The shares of the provider of waste management environmental services are up 13% since the beginning of 2016, but analysts at Oppenheimer believe the stock has more room to run. Even though Waste Management’s shares change hands at around 20.1-times expected earnings versus the forward PE multiple of 17.6 for the S&P 500 Index, Oppenheimer analysts rate Waste Management’s stock as ‘Outperform’ with a price target of $67. Earlier this year, Waste Management of Florida, a subsidiary of WM, acquired certain operations and business assets from Southern Waste Systems/Sun Recycling in Southern Florida for $525 million. Cliff Asness’ AQR Capital Management had 2.87 million shares of Waste Management Inc. (NYSE:WM) at the end of March.

#1. Berkshire Hathaway Inc. (NYSE:BRK.B)

– Number of shares owned by Bill & Melinda Gates Foundation as of March 31: 69.38 Million

– Value of Bill & Melinda Gates Foundation’s holding as of March 31: $9.84 Billion

The philanthropic organization reduced its holding in Berkshire Hathaway Inc. (NYSE:BRK.B) by exactly 5.00 million Class B shares during the first three months of 2016, ending the first quarter with 69.38 million shares. The trimmed stake was worth a huge $9.84 billion at the end of March, constituting 57.3% of the fund’s equity portfolio. Investors should be aware that billionaire Warren Buffet joined the foundation as a trustee back in 2006, pledging billions of dollars to the foundation. Mr. Buffett has donated hundreds of millions of Berkshire Hathaway Class B shares to the foundation and plans to provide gifts each year throughout his lifetime. Berkshire’s Class B shares have gained 6% since the beginning of the year. D.E. Shaw & Co. L.P., founded by David E. Shaw, owns 4.92 million Class B shares of Berkshire Hathaway Inc. (NYSE:BRK.B) as of the end of March.

Disclosure: None