In this article, we discuss the 10 stocks that Warren Buffett is selling. If you want to skip our detailed analysis of these stocks, go directly to Warren Buffett Is Selling These 5 Stocks.
Value investors have once again come into the spotlight as inflation batters growth stocks. Warren Buffett, the chief of Berkshire Hathaway, is widely recognized as perhaps one of the most successful value investors of all-time. As hedge funds submit their latest (for Q4’2021) 13F filings, a lot of attention is being paid to the moves Buffett has made at the market. According to the data available, Buffett added three new stocks to his portfolio, worth over $330 billion, at the end of December 2021. He reduced holdings in eight equities and sold off two stocks completely.
Some of the prominent stocks that Berkshire Hathaway sold in the fourth quarter of 2021 include Bristol-Myers Squibb Company (NYSE:BMY), Marsh & McLennan Companies, Inc. (NYSE:MMC), and Sirius XM Holdings Inc. (NASDAQ:SIRI), among others discussed in detail below. Berkshire Hathaway also made additional purchases in four stocks during the fourth quarter of 2021. The portfolio value of the fund increased by about $37 billion during the period. The top ten holdings comprise close to 90% of the portfolio.
A good indicator of the change in fortunes for growth and value investors is the performance of Berkshire Hathaway measures against the returns of the ARK Innovation Fund, a growth-focused fund that was one of the best-performers of 2020. By late January, ARK had tumbled close to 43% while Berkshire Hathaway was up 34%. The market shift from growth to value has been triggered by rising inflation and the prospect of an interest rate hike that is likely to come in March.
Buffett has seen his net worth rise in the past few months. He is now valued at more than $114 billion, per Forbes. He is ranked number six on the Forbes Billionaires 2021, a list of the wealthiest individuals in the world. Buffett often invests in companies with long-term goals in mind, looking for bargains in sectors that are likely to offer solid returns for many years. For example, Berkshire has been offloading pharma firms in the past few months as the vaccine-linked boom around the sector fades. During the 2009 financial crisis, Buffett loaded up on bank stocks that were trading at cheaper prices due to the economic meltdown. The investments later helped Berkshire post record returns through the coming decade.
Our Methodology
The stocks were picked from the fourth quarter regulatory filings of Berkshire Hathaway. The companies in which Berkshire Hathaway trimmed a previously-held stake, or sold it off completely, compared to filings for the third quarter of 2021, feature on the list.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Warren Buffett Is Selling These Stocks
10. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 39
Percentage Decrease in Stake in Q4: 1%
The Kroger Co. (NYSE:KR) is an Ohio-based firm that owns and runs retail stores. Latest 13F filings show that Berkshire Hathaway trimmed a previously held stake in the company by just 1% between October and December 2021. It now owns 61.4 million shares in The Kroger Co. (NYSE:KR) worth $2.7 billion, representing 0.83% of the portfolio.
Elite hedge funds continue to hold large stakes in The Kroger Co. (NYSE:KR). At the end of the third quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $3.9 billion in The Kroger Co. (NYSE:KR), the same as in the preceding quarter worth $3.5 billion.
Just like Bristol-Myers Squibb Company (NYSE:BMY), Marsh & McLennan Companies, Inc. (NYSE:MMC), and Sirius XM Holdings Inc. (NASDAQ:SIRI), The Kroger Co. (NYSE:KR) is one of the stocks that Warren Buffett is selling. However, 1% decline in the stake is negligible and does not show any bearish sentiment.
9. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 146
Percentage Decrease in Stake in Q4: 8%
Mastercard Incorporated (NYSE:MA) is a technology firm with core interests in transaction processing services. Among the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA) with 5.8 million shares worth more than $2.1 billion.
Securities filings reveal that Berkshire Hathaway trimmed its stake in Mastercard Incorporated (NYSE:MA) by 8% during the fourth quarter of 2021. The fund presently owns more than 3.9 million shares of Mastercard Incorporated (NYSE:MA) worth over $1.4 billion, representing 0.43% of the portfolio.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard Incorporated (NYSE:MA) make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard Incorporated (NYSE:MA)’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
8. Charter Communications, Inc. (NASDAQ:CHTR)
Number of Hedge Fund Holders: 74
Percentage Decrease in Stake in Q4: 9%
Charter Communications, Inc. (NASDAQ:CHTR) provides broadband and cable services. The company has featured in the Berkshire portfolio since the second quarter of 2016. Between October and December last year, however, Buffett reduced his fund’s stake in the firm by 9%. The fund now owns over 3.8 million shares of Charter Communications, Inc. (NASDAQ:CHTR) worth $2.4 billion.
Charter Communications, Inc. (NASDAQ:CHTR) has attracted the interest of other top hedge fund managers as well. At the end of the third quarter of 2021, 74 hedge funds in the database of Insider Monkey held stakes worth $18.7 billion in Charter Communications, Inc. (NASDAQ:CHTR), down from 75 the preceding quarter worth $19.4 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Charter Communications, Inc. (NASDAQ:CHTR) was one of them. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter Communications, Inc. (NASDAQ:CHTR) trailed after generating robust returns earlier in the recovery.”
7. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 143
Percentage Decrease in Stake in Q4: 14%
Visa Inc. (NYSE:V) is a California-based payments technology firm. Amid a broader lull around growth firms, hedge funds have been offloading the stock in recent months. At the end of the third quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Visa Inc. (NYSE:V), down from 162 in the preceding quarter worth $27 billion.
Berkshire Hathaway also reduced its stake in Visa Inc. (NYSE:V) during the fourth quarter of 2021 by around 14%. The fund now owns over 8.2 million shares of Visa Inc. (NYSE:V) worth close to $1.8 billion, representing 0.54% of the portfolio.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa Inc. (NYSE:V).”
6. Royalty Pharma plc (NASDAQ:RPRX)
Number of Hedge Fund Holders: 20
Percentage Decrease in Stake in Q4: 35%
Royalty Pharma plc (NASDAQ:RPRX) is a New York-based firm that operates in the pharma sector. Berkshire first purchased a stake in the firm during the third quarter of 2021. This stake was decreased by 35% during the fourth quarter, per latest data. The fund now owns 8.6 million shares of Royalty Pharma plc (NASDAQ:RPRX) worth $344 million, representing 0.1% of the portfolio.
Even though Buffett has decreased exposure to Royalty Pharma plc (NASDAQ:RPRX) in recent months, other fund managers continue to be bullish on the firm. Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Adage Capital Management is a leading shareholder in Royalty Pharma plc (NASDAQ:RPRX) with 24 million shares worth more than $989 million.
In addition to Bristol-Myers Squibb Company (NYSE:BMY), Marsh & McLennan Companies, Inc. (NYSE:MMC), and Sirius XM Holdings Inc. (NASDAQ:SIRI), Royalty Pharma plc (NASDAQ:RPRX) is one of the stocks that Warren Buffett is selling.
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Disclosure. None. Warren Buffett Is Selling These 10 Stocks is originally published on Insider Monkey.
