A Look at Billionaire Warren Buffett’s Notable Bets and Top Moves for 2016

Of course, most individual investors and larger investors dream of becoming billionaires one day, but the harsh truth is that only a few will manage to reach and exceed the $1 billion mark. However, investors could at least invest like a billionaire in an attempt to generate attractive trading profits. One way to invest alongside billionaire Warren Buffett for instance is to piggyback his long term public trades, which are revealed by his quarterly 13Fs. Buffett’s Berkshire Hathaway recently submitted its 13F filing for the fourth quarter, which discloses several noteworthy and interesting moves. It is widely-known that the Oracle of Omaha is a long term-focused investor, so his public equity portfolio could be easily replicated by individual investors sharing the same investment philosophy and style. But is it profitable to track and piggyback Buffett’s moves? Berkshire Hathaway’s long positions in companies with a market capitalization of at least $1 billion generated a weighted average negative return of 4.4% in 2015, but value investing usually involves focusing on the long run. With that being said, the following article will discuss the largest equity positions of Buffett as of the end of the fourth quarter of 2015, as well as several noteworthy moves made during the last three months of 2015.

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Let’s begin our journey by looking at Warren Buffett’s largest equity holding as of the end of 2015, represented by Wells Fargo & Co (NYSE:WFC). Berkshire Hathaway upped its stake in the community-based financial services company by 9.41 million shares during the December quarter, ending the year with a whopping 479.70 million shares. The enlarged stake was valued at approximately $26.08 billion at the end of December and accounted for 19.78% of Berkshire’s equity portfolio. The shares of Wells Fargo & Co (NYSE:WFC) are down by at least 11% since the beginning of 2016, which has pushed the company’s valuation to more attractive levels. The stock trades at a forward P/E multiple of 10.45, which is below the average of 12.0 for the financial sector. Wells Fargo reported diluted earnings per share of $4.15 for 2015, up from $4.10 reported for 2014. Its full-year 2015 revenues grew 2% year-on-year to $86.1 billion. It is also important to note that Wells Fargo pays a dividend of $1.50 per share, which gives its stock a yield of 3.17%. Ken Fisher’s Fisher Asset Management reported owning 18.99 million shares of Wells Fargo & Co (NYSE:WFC) in the latest round of 13Fs.

Berkshire reported owning 325.63 million shares of Kraft Heinz Co (NASDAQ:KHC) as of the end of the fourth quarter, valued at $23.69 billion. The sizable position was not changed during the final quarter of 2015 and amassed 17.97% of Berkshire’s 13F portfolio. Let us remind you that Warren Buffett and investment firm 3G Capital teamed up last year to create one of the largest food and beverage conglomerates in the world by merging H.J. Heinz Co. and The Kraft Foods Group. The shares of the newly-created behemoth have lost slightly less than 1% since they began trading following the merger in early July 2015. Kraft Heinz Co (NASDAQ:KHC) is currently undergoing a multi-year program aimed at cutting costs, integrating, and optimizing the combined company. The program is anticipated to reach $1.5 billion in pre-tax savings by 2017. Andreas Halvorsen’s Viking Global added a 2.08 million-share position in Kraft Heinz Co (NASDAQ:KHC) to its portfolio during the December quarter.

Berkshire’s stake in The Coca-Cola Co (NYSE:KO), contained 400 million shares at the end of December, which were aggregately valued at $17.18 billion. The stake constituted 13.03% of the company’s entire equity portfolio. The world’s biggest soft-drink company has seen its shares advance nearly 4% over the past 12-month period. Although the company’s stock performance does not seem to be exceptional, one should not forget that Coca-Cola pays a dividend of $1.32 per share and its stock sports a dividend yield of 3.06%. The Coca-Cola Co (NYSE:KO)’s net operating revenues totaled $44.29 billion in 2015, down from $46.00 billion reported a year earlier. However, the company’s management anticipates 2016 organic revenue growth in the range of 4% to 5%. It is also worth mentioning that Coca-Cola’s 2015 diluted net income per share increased to $1.67 from $1.60 in 2014. Donald Yacktman’s Yacktman Asset Management cut its stake in The Coca-Cola Co (NYSE:KO) by 4.97 million shares during the October-to-December period to 19.92 million shares.

Warren Buffett boosted his position in Deere & Company (NYSE:DE) by 5.83 million shares or 34% during the last three months of 2015, ending the year with 22.88 million shares. The stake was worth nearly $1.75 billion at the end of the year. The shares of the manufacturer of agricultural, construction, and forestry machinery are almost 14% in the red for the past 12 months, mainly owing to lower demand for machinery due to lower crop prices and slumping economic growth. The company operates through three principal business segments, which include the agriculture and turf segment, the construction and forestry segment, and the financial services segment. Deere & Company (NYSE:DE)’s net sales for the fiscal year 2015 that ended October 31 totaled $28.86 billion, down from $36.07 billion reported for the prior year. Net sales generated from the agriculture and turf segment, which accounted for nearly 69% of total sales in fiscal 2015, decreased to $19.81 billion from $26.38 billion year-on-year. Earlier this month, Deere & Company completed the acquisition of European precision planter specialist Monosem; a deal that will enhance the acquirer’s market reach in precision planting equipment. Generation Investment Management, co-founded by David Blood and Al Gore, owns 6.10 million shares of Deere & Company (NYSE:DE) as of December 31.

Last but not least, Berkshire Hathaway trimmed its position in AT&T Inc. (NYSE:T) by 12.74 million shares or 21% during the final quarter of 2015, remaining with 46.58 million shares valued at $1.60 billion. The shares of the telecommunications giant are up by 6% over the past 52 weeks, amid gaining almost 7% since the beginning of 2016. AT&T generated revenues of $146.8 billion during 2015, which marked an annual increase of 10.8%. Moreover, the company’s earnings per share increased to $2.71 from $2.56. AT&T Inc. (NYSE:T)’s management anticipates a great 2016 in term of financial performance, expecting double-digit consolidated revenue growth for the year. Meanwhile, it appears that the stock is fairly valued relative to its peers in the Telecommunication Services industry if solely relying on P/E metrics; the stock trades at a forward P/E of 12.29, versus the Telecommunication Services industry ratio of 13.0. It is also hard to ignore the annual dividend of $1.92 per share paid by AT&T, which gives its stock a dividend yield of 5.26%. D.E. Shaw & Co. L.P., founded by David E. Shaw, boosted its holding in AT&T Inc. (NYSE:T) by 5.97 million shares during the December quarter to 9.16 million shares.

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