Warren Buffett is widely followed in the financial media, and even in mainstream news, as a value investor who has achieved enormous investing success by marrying traditional value analysis to an appreciation for the inherent value of well-known brands. His holding company, Berkshire Hathaway, files quarterly 13Fs with the SEC to disclose many of its long equity positions in U.S. stocks; we regularly track 13Fs as part of our work researching investment strategies (for example, we have found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year) and so can also see what Buffett has been up to by comparing his most recent filing to what he last reported owning. In this case, we can compare this 13F to his 13F for the fourth quarter of 2012 (see Buffett’s holdings over time). Here are a few stocks that Berkshire was buying in the first quarter of 2013:
Davita. Berkshire has a large percentage stake in DaVita HealthCare Partners Inc (NYSE:DVA), a provider of kidney dialysis services at both hospitals and at specialized dialysis centers, and slightly increased its holdings during Q1 to a total of about 15 million shares. DaVita also had a special item pull its net income growth negative last quarter, and correcting for that, pretax income grew 39% compared to the first quarter of 2012. The market capitalization of $14 billion represents a multiple of 16 on forward earnings estimates; those targets do include an expectation of significant increases in earnings per share over the next couple years. Still, given the company’s impressive earnings growth (and revenue rising over 50% over the same time frame) we’d be interested in considering it as a growth stock. Billionaire David Shaw’s D.E. Shaw has been another major shareholder of DaVita in the past (check out D.E. Shaw’s stock picks).
Berkshire didn’t sell a significant number of shares of any of its ten largest positions, even as the holding company announced a buyout of H.J. Heinz Company (NYSE:HNZ) and made the purchases we’ve mentioned here. As such Buffett and his team appear to like stocks at this point in time, and considering the high beta at Chicago Bridge & Iron Company N.V.(NYSE:CBI) they seem confident in the broader economy. We think that these three names are worthy of consideration by investors, though it’s important to note that both DaVita and Chicago Bridge & Iron Company N.V.(NYSE:CBI) are dependent on continuing their strong recent performance rather than being traditional value stocks. In addition, we would advise considering other large banks as well before buying Wells Fargo & Co (NYSE:WFC).
Disclosure: I own no shares of any stocks mentioned in this article.