5 Stocks Warren Buffett Sold

In this article, we will discuss 5 stocks Warren Buffett sold. For more stocks, click 15 Stocks Warren Buffett Sold.

5. Bristol-Myers Squibb Company (NYSE:BMY)

Stock returns since Warren Buffett sold: -10.67%
SPY total return in the same period (annualized return): 6.13%
Number of Hedge Fund Holders: 69

Berkshire Hathaway dropped Bristol-Myers Squibb Company (NYSE:BMY) in the first quarter of 2022 after years of holding. Bristol-Myers Squibb Company (NYSE:BMY) is a pharmaceutical conglomerate in the Big Pharma club.

4. AbbVie Inc. (NYSE:ABBV)

Stock returns since Warren Buffett sold: 6.2%
SPY total return in the same period (annualized return): -10.2%
Number of Hedge Fund Holders: 73

AbbVie Inc. (NYSE:ABBV) is one of the big firms in the global biopharmaceutical industry. It develops and manufactures various prescription drugs for indications like cancer, hepatitis C, and rheumatoid arthritis. Berkshire Hathaway bought over $410 million worth of shares in AbbVie Inc. (NYSE:ABBV) in 2021 but offloaded the entire stake by the end of 2021. As of May 12, 2023, ABBV stock had increased by 8.7% since Dec 31, 2021.

Overall, 73 hedge funds monitored by Insider Monkey were bullish on AbbVie Inc. (NYSE:ABBV) in the fourth quarter of 2022. The stakes of these funds are valued at $ 1.53 billion.

3. Biogen Inc. (NASDAQ:BIIB)

Stock returns since Warren Buffett sold: 11.91%
SPY total return in the same period (annualized return): 3.94%
Number of Hedge Fund Holders: 75

Biogen Inc. (NASDAQ:BIIB) stock has been polarizing due to controversy surrounding Aduhelm’s accelerated approval, causing the stock to give back much of its gains.

Buffett’s fund initially acquired a position in the company during Q4 2019 and subsequently sold its stake in Biogen Inc. (NASDAQ:BIIB) during Q2 2021. As of the end of the fourth quarter, 75 hedge funds in Insider Monkey’s database held stakes in Biogen Inc. (NASDAQ:BIIB), an increase as compared to 70 funds in the preceding quarter.

2. Merck & Co Inc (NYSE:MRK)

Stock returns since Warren Buffett sold: 43.88%
SPY total return in the same period (annualized return): 10.91%
Number of Hedge Fund Holders: 77

Merck & Co Inc (NYSE:MRK) is a global pharmaceutical company that develops, manufactures, and markets prescription medicines, vaccines, biological therapies, and animal health products. Berkshire first invested in Merck & Co Inc (NYSE:MRK) in Q3 2020 and held a stake of about 0.5% as of Q4 2020. However, it offloaded the entire stake in Q3 2021, along with its stakes in two other drugmakers, AbbVie Inc and Bristol-Myers Squibb Co.

In its Q4 2022 investor letter, Aristotle Capital Management, LLC provided the following statement regarding Merck & Co., Inc. (NYSE:MRK):

“Founded in 1891 and headquartered in New Jersey, Merck & Co., Inc. (NYSE:MRK) is one the world’s largest pharmaceutical firms. The company’s drugs are used to treat conditions in a variety of areas, including oncology (~38% of revenue), vaccines (~19%), diabetes (~11%), animal health (~11%), and others (~21%). Merck produced over $48 billion in sales in 2021, just under half of which was generated in the United States. Within oncology, the firm’s immuno-oncology platform is becoming a major contributor to overall sales, driven by the blockbuster1 drug Keytruda. The company’s vaccine business is also significant. It includes Gardasil for preventing HPV (the disease that can lead to cervical cancer in women), as well as vaccines for hepatitis B, pediatric diseases, and shingles. In recent years, Merck has been shifting its focus toward unmet medical needs in specialty-care areas. As part of this shift in focus, in June 2021, Merck received $9 billion from the spinoff of its women’s health, established brands, and biosimilars businesses into the now independent, publicly traded company Organon…” (Click here to read the full text)

1. Wells Fargo & Co (NYSE:WFC)

Stock returns since Warren Buffett sold: -18.55%

SPY total return in the same period (annualized return): -0.33%

Number of Hedge Fund Holders: 87

Wells Fargo & Co (NYSE:WFC) offers various financial services, including banking, investment, mortgage, and consumer/commercial finance, to clients. In the first quarter of 2022, Berkshire Hathaway fully sold off entire stake in the company.

In its 2022 annual investor letter, Davis New York Venture Fund provided the following statement regarding Wells Fargo & Company (NYSE:WFC):

“Our investment thesis for our next largest bank investment, Wells Fargo, is totally different. As is well known, Wells Fargo & Company (NYSE:WFC) is the country’s third-largest bank, serving one in three US households. Years of regulatory missteps under prior managements resulted in reputational damage, higher-than-average expenses, numerous consent orders, caps on asset growth, all added to the negative impact of low rates on their interest income. However, where others see bad news, we see resiliency and gradual improvement. Wells Fargo’s resiliency is reflected in the fact that despite years of terrible headlines and congressional hearings, Wells Fargo’s core customers stayed put and customer attrition remains extraordinarily low.

As to gradual improvement, new management has made steady headway in closing consent orders, settling regulatory matters, and upgrading systems. Thus, rather than increasing profits from growth, Wells Fargo’s earnings growth for the next three-to-five years should come from the combined tailwinds of rising interest income, partially offset by normalizing credit costs, reduced expenses as systems improve, and the scandals of the last decade are gradually put behind them, and the return of excess capital through share repurchases and rising dividends. The hypothetical earnings bridge displayed in Figure 6 gives some sense of the earnings power we see unfolding for this durable financial franchise in the years ahead.

While our grounded optimism carries the day, we are mindful of the risk that Wells Fargo’s historically excellent credit culture may have deteriorated or that exasperated regulators may choose to extract even more major penalties for past infractions.”

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