Tomorrow, November 14, is a crucial date for investors as it marks the deadline for institutional investors with over $100 million in assets to submit Form 13F to the Securities and Exchange Commission. This form offers detailed insights into the stocks that the top money managers on Wall Street have been buying and selling in the most recent quarter, as of September 30. Despite the potential for the data to be somewhat outdated, 13Fs remain a valuable resource for spotting trends and observing the interests of leading asset managers.
Among all the 13F filings, none garners more attention than that of Warren Buffett's Berkshire Hathaway. As the Oracle of Omaha, Buffett has spearheaded an extraordinary accumulation of wealth, with Class A shares delivering over 5,600,000% gains since he became CEO. Consequently, investors eagerly anticipate a glimpse into his investment maneuvers, with a primary focus on what changes have been made to the portfolio.
Interestingly, Buffett has been a net seller of equities for eight quarters consecutively, a situation evidenced by Berkshire's financial disclosures. Alongside his key investment partners, Todd Combs and Ted Weschler, approximately $166.2 billion more in stocks have been sold than acquired from October 2022 to September 2024. While investors might gather some hints about his trades before the 13F filing, notable insights often come from the company's quarterly results, which disclose Berkshire's top stock holdings.
As recently as September 30, Berkshire retained 300 million shares of Apple, down from 400 million at the end of the previous quarter. This indicates Buffett trimmed his stake, marking the fourth consecutive quarter of selling Apple shares. Additionally, more than 235 million shares of Bank of America were sold in the latest quarter, indicating a continued divestiture beyond Apple.
Despite extensive action already observed with Apple and Bank of America, Buffett is likely continuing to sell positions in other stocks. Firstly, Capital One Financial could see further reductions. In the second quarter, a surprising 21% reduction in Berkshire's stake occurred, suggesting that the selling might persist in light of macroeconomic concerns and Capital One's current valuation.
Secondly, considering historical patterns, T-Mobile may also be on the chopping block. Buffett decreased their holdings by 11% in the June quarter and might repeat this in the September quarter due to valuation factors and slower growth forecasts compared to peers like AT&T and Verizon.
Lastly, Louisiana-Pacific is another potential sell target. With sales occurring in both the first and second quarters of 2023, Louisiana-Pacific represents a stock with a valuation now exceeding its historical averages. Alongside changes in monetary policy by the Federal Reserve, the appeal of home production suppliers may wane for value-focused investors like Buffett.
In summary, the strategic selling activities from Buffett and his team extend beyond just Apple and Bank of America. Continued sales in entities such as Capital One Financial, T-Mobile, and Louisiana-Pacific point towards a broader repositioning within Berkshire's portfolio, driven largely by valuation considerations and broader economic signals.
