The Bill & Melinda Gates Foundation Trust’s Top Stocks

Bill & Melinda Gates Foundation Trust is a Seattle-based transparently operated private foundation which was founded by Bill Gates in 2000. The trust reported $18.45 billion in managed 13F securities, as of the end of the third quarter. In this article we will talk about the foundation’s top picks of the third quarter.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Berkshire Hathaway Inc. (NYSE:BRK.B)

Bill & Melinda Gates Foundation Trust upped its stake in Berkshire Hathaway Inc. (NYSE:BRK.B) in the third quarter by almost 10 million shares, ending the period with over 74.35 million shares of the company, which have a total worth of about $10.74 billion. Berkshire Hathaway Inc. (NYSE:BRK.B)’s stock has gained over 20% year-to-date. Berkshire Hathaway is bagging huge gains from its massive stakes in the banking sector after the election of Donald Trump. Trump’s plan to ease banking regulations, cut taxes and boost spending will likely help profits grow in the sector. A total of 74 elite funds own stakes in Berkshire Hathaway Inc. (NYSE:BRK.B), as of the end of the third quarter.

Waste Management, Inc. (NYSE:WM)

At the end of the third quarter, Bill & Melinda Gates Foundation reported ownership of 18.63 million Waste Management, Inc. (NYSE:WM) shares, which have a total value of $1.19 billion. Waste Management’s stock is up over 34% year-to-date. The Texas-based company earned $0.84 a share on $3.54 billion in revenue for its third quarter, versus the consensus estimates of $0.80 EPS and $3.5 billion revenue.  The company now expects at least $2.91 EPS for the full year, up from prior estimates of between $2.83 and $2.86. Cliff Asness’ AQR Capital Management owns 4.55 million shares of Waste Management, as of the end of the third quarter.

On the next page, we will discuss the rest of the Q3 moves by Bill & Melinda Gates Foundation.

Canadian National Railway (USA) (NYSE:CNI)

Bill & Melinda Gates Foundation Trust made no change to its stake in Canadian National Railway (USA) (NYSE:CNI), and moved into the fourth quarter with 17.13 million shares of the company which have a market value of $1.12 billion. The stock is up over 22% year-to-date. In the third quarter, Canadian National reported Q3 EPS of CDN$1.25 ($0.93), versus CDN$1.26 reported last year, while revenue came in at CDN$3.01 billion, compared to last year’s CDN$3.22 billion. Daniel Bubis’ Tetrem Capital Management is a notable shareholder of Canadian National Railway with 1.28 million shares of the company, as of the end of the third quarter.

Caterpillar Inc. (NYSE:CAT)

Bill & Melinda Gates Foundation Trust owns 11.26 million shares of Caterpillar Inc. (NYSE:CAT), as of the end of the third quarter. The total worth of this position is $999.63 million. The stock is up over 45% year to date. Investors are flocking into the Illinois-based construction equipment company after the election of Donald Trump, as he has promised to increase spending on infrastructure. In the third quarter, Caterpillar (NYSE: CAT) reported EPS of $0.85 on $9.16 billion revenue, while the Street had projected EPS of $0.77 and $9.84 billion revenue. A total of 32 hedge funds tracked by Insider Monkey were long Caterpillar (NYSE: CAT), as of the quarter ended on September 30.

Wal-Mart Stores, Inc. (NYSE:WMT)

At the end of September, Bill & Melinda Gates Foundation reported ownership of $836.81 million stake in Wal-Mart Stores, Inc. (NYSE:WMT) with 11.60 million shares of the company. The Arkansas-based retail giant earned $0.98 a share in the third quarter, better than the estimates of $0.96. Comparable sales grew by 1.2%, driven by a traffic increase of 0.7%. For full fiscal 2017, Walmart expects EPS of $4.20-$4.35, versus the consensus of $4.34. Legendary investor Warren Buffett’s Berkshire Hathaway has a stake of 12.97 million shares in Walmart, as of the end of the third quarter.

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