Warren Buffett’s Short-Term Hit and Run Transactions

Intel Corporation (NASDAQ:INTC)

Another stake that didn’t last long in Buffett’s portfolio was the one in Intel Corporation (NASDAQ:INTC), which the fund started in the third quarter of 2011, when prices were tumbling, and closed out in the second quarter of 2012, when the valuation had recuperated substantially. The stake, which initially comprised 9.33 million shares, worth almost $200 million by September 30, 2011, was increased by 23% over the fourth quarter of 2011, to 11.49 million shares, as the price rebounded, and then trimmed by 32% in the first quarter of 2012, as prices got close to their 52 week high.

The position was finally closed out in the second quarter of 2012. When asked about the move, Buffett acknowledged he had made a $60 million gain, or approximately 25%, on the world’s largest semiconductor company. In fact, Berkshire timely liquidated its stake in Intel Corporation (NASDAQ:INTC), just before the chipmaker cut its third-quarter sales estimate by roughly $1 billion.

CVS Health Corp (NYSE:CVS)

Berkshire’s stake in CVS Health Corp (NYSE:CVS) presents another interesting case. The firm started a position in the company, comprising 5.66 million shares – or $190 million in stock, in the third quarter of 2011, and raised it to 7.1 million shares over the fourth quarter of the year. However, as the stock price recuperated over 2012, the firm started to sell the stock, disposing of 25% of its shares over the second quarter of 2012, and finally closing out its stake in the third quarter of 2012.

After a year holding CVS Health Corp (NYSE:CVS)’s stock, Berkshire cashed out, once again, at a profit. When the fund opened the stake, the stock traded between $32.06 and $38.54; when it closed the position, shares traded in the $44.12 to $48.61 range.

Exxon Mobil Corporation (NYSE:XOM), The Outlier

Unlike the four stocks listed above, which were held by Berkshire by a maximum of one year, Exxon Mobil Corporation (NYSE:XOM) appeared in the firm’s portfolio twice over the last five years, remaining for 2 and a half years in the first occasion, and for 1 and a half year in the second time around.

Exxon made it to Buffett’s holdings in the second quarter of 2009, when the firm acquired 854,490 shares at very low prices – the stake was worth less than $60 million by June 30, 2009. Over the following quarter, the fund boosted its exposure by 49% to 1.27 million shares. In the fourth quarter of the year, the stake was trimmed by 66%, and then remained unchanged for the following seven quarters, until it was closed out in the fourth quarter of 2011, after the stock recuperated from its Q2’11 plummet.

Exxon Mobil Corporation (NYSE:XOM)’s stock traded below $75 when the firm acquired exposure; when the position was closed, it was trading around similar prices, although it surpassed the $85 threshold toward the end of the year.

Berkshire bought into the energy company once again in the second quarter of 2013 – acquiring 31.24 million shares or more than $2.8 billion in stock, continued to increase its exposure over the following couple of quarters, and then held the position for almost another year, before closing its 41.12 million shares stake in the fourth quarter of 2014, amid declining oil prices. The position was worth roughly $3.7 billion at the time; this means no big profits were made – although analysts have speculated that the investment generated some return.

“Exxon Mobil is a wonderful company,” Buffett said when he disclosed the exit. However, “We thought we might have other uses for the money,” he added, suggesting his firm was more interested in acquiring whole companies at the time.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Q4 11:                         XOM – Held since Q2 09 (for 2.5 y)

Q2 12:                         INTC – Held since Q3 11 (for 3Q)

Q3 12:                         CVS – Held since Q3 11 (for 1 y)

Q1 13:                         ADM – Held since Q4 12 (for 1Q)

Q4 14:                         XOM – Held since Q2 13 (for 1.5 y)

Q4 14:                         ESRX – Held since Q3 14 (for 1Q)