Billionaire Warren Buffett’s Berkshire Strengthens Bullish Stance on Apple, Airlines; Other Top Q4 Moves

As the deadline for submitting 13F filings for the end of the fourth quarter expired yesterday, billionaire Warren Buffett‘s Berkshire Hathaway revealed its 13F portfolio as of the end of 2016, allowing us to take a glance at the moves the legendary holding company made between October and December. Overall, a comparison between the latest filing and the previous one showed that Berkshire is bullish on the market. Out of 47 positions, Berkshire acquired three holdings during the fourth quarter and increased its stake in five other companies, with four positions having been raised substantially. On the other hand, the investor also cut two of its holdings and sold out of six positions. Last week, during an interview on CNBC, Buffett said that Berkshire bought around $12 billion worth of stocks, net, since the November election and the filing revealed a substantial part of the recent investments.

In this way, at the end of December, Berkshire had a 13F portfolio valued at $147.99 billion, up from $128.79 billion a quarter earlier. Since Warren Buffett and his team generally have a conservative approach towards investing and analyze stocks based on their performance over the long run, let’s take a closer look at some of the stocks in which Berkshire boosted its position in during the fourth quarter, as well as some companies added to the holding company’s 13F portfolio and holdings that were sold out.

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Apple Inc. (NASDAQ:AAPL) is one of Berkshire’s most recent and most profitable bets. During the fourth quarter, the fund boosted its stake by 42.13 million shares to 57.36 million shares worth $6.64 billion at the end of December. The move paid off as Apple’s stock has gained over 16% since the beginning of 2017, pricing Berkshire’s shares at $7.74 billion. Earlier this week, Apple’s stock hit a new all-time high as investors grow excited about the prospects of the next iPhone and the company’s strong financial results, which showed that the tech giant has returned to revenue growth.

Apple posted EPS of $3.36, topping estimates of $3.22, while revenue of $78.4 billion was higher than the expected $77.4 billion. The company also reported 78.3 million iPhones sold during the holiday quarter, up by 5% year-over-year and above estimates of 76 million units. Buffett’s fund added Apple Inc. (NASDAQ:AAPL) to its equity portfolio during the first quarter of 2016 and reports suggested that the decision was made by one of Buffett’s lieutenants, which are Todd Combs and Ted Weschler. Since the end of March 2016, the stock has advanced by 23%. Another investor bullish on Apple Inc. (NASDAQ:AAPL) is billionaire Ken Fisher’s Fisher Asset Management. On the other hand, billionaire Chase Coleman’s Tiger Global Management sold off all of its previously-held 3.61 million shares during the fourth quarter.

On the next page we are going to take a closer look at Berkshire’s investments in the airline industry and some of its other interesting moves during the fourth quarter.

One industry that Buffett and his team like is airlines. Out of four airline companies in Berkshire’s equity portfolio, the fund initiated a stake in one company and boosted its holdings in the other three, by as much as 850% in Delta Air Lines, Inc. (NYSE:DAL)‘s case. At the end of December, Berkshire held 60.03 million shares of Delta Air Lines, Inc. (NYSE:DAL) worth $2.95 billion and it added 42.20 million shares of Southwest Airlines Co (NYSE:LUV), reporting a new position worth $2.15 billion in its latest 13F filing. It’s worth mentioning that in all four airline stocks (the other two being American Airlines Group Inc (NASDAQ:AAL) and United Continental Holdings Inc (NYSE:UAL)) Berkshire initiated stakes in the third and fourth quarters of last year. Berkshire’s ‘bullishness’ towards the airline industry is particularly interesting since back at the company’s 2013 annual meeting, Buffett said that the airline industry is a “death trap for investors.” However, as the drop in oil prices dragged down jet fuel prices and US airlines are investing in improvements to their fleet’s capacity, efficiency, and service, it’s not surprising that the billionaire investor changed his mind about the industry.

Sirius XM Holdings Inc. (NASDAQ:SIRI) is another addition to Berkshire’s portfolio, with the fund having acquired 166.64 million shares worth $741.55 million between October and December. The provider of satellite radio saw its shares advance by over 6% during the fourth quarter and have added another 9.90% since the beginning of 2017, including an over-3% gain registered today, most likely on the back of Berkshire’s 13F. With car sales in the U.S. on the rise over the last years, Sirius XM Holdings Inc. (NASDAQ:SIRI) has been increasing its subscriber numbers. It has also managed to post better-than-expected revenue for most of the last ten quarters, although its bottom-line has been mostly in-line with estimates. David Cohen and Harold Levy’s Iridian Asset Management is another shareholder of Sirius XM Holdings Inc. (NASDAQ:SIRI), with a stake containing 55.33 million shares as of the end of 2016.

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Let’s move on to the stocks that Berkshire disposed of during the fourth quarter. One of those companies is Deere & Company (NYSE:DE), in which Berkshire had previously held 21.09 million shares. The stock of the agricultural equipment manufacturer gained nearly 25% between the end of the third quarter of 2012 (when Berkshire acquired the stake) and the end of 2016. Over the last couple of years, Deere & Company (NYSE:DE) has been suffering from sales declines as weaker crop prices put more pressure on farmers. John Lykouretzos’ Hoplite Capital Management also closed its stake in Deere & Company (NYSE:DE), while Andreas Halvorsen’s Viking Global initiated a position containing 9.31 million shares during the fourth quarter.

Another company in which Berkshire closed its position is Kinder Morgan Inc (NYSE:KMI). In addition, the fund cut its stake in Wal-Mart Stores Inc (NYSE:WMT) by nearly 90% to 1.39 million shares, after having held shares of the company for more than a decade.

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