#4 Moody’s Corporation (NYSE:MCO)
– Shares Owned by Berkshire Hathaway (as of December 31): 24.67 million
– Value of Holding (as of December 31): $2.56 billion
Moody’s Corporation (NYSE:MCO) has been a part of Berkshire’s portfolio since 2000. Though the fund has almost halved its stake in the company from the 48 million shares it held in June 2009, it booked considerably profit in doing so because Moody’s Corporation (NYSE:MCO)’s stock has appreciated over 300% since that time. John Armitage‘s Egerton Capital Limited was among the funds which initiated a stake in the company during the fourth quarter, it purchased 2.49 million shares of Moody’s Corporation during that period. Though the stock of rating agency started 2016 on a dismal note, depreciating by 20% in the first weeks, it has made a swift recovery and now trades down by 5% year-to-date. On March 10, the company announced that it would withdraw from the Russian domestic market, citing new Russian regulations which require foreign rating agencies to issue ratings in the country only through a local subsidiary that agrees to certain conditions. On February 22, analysts at Argus reiterated their ‘Buy’ rating on Moody’s stock, but lowered their price target to $110 from $120.
#3 American Express Company (NYSE:AXP)
– Shares Owned by Berkshire Hathaway (as of December 31): 151.61 million
– Value of Holding (as of December 31): $10.54 billion
Mr. Buffett has had a long relationship with American Express Company (NYSE:AXP), moving in and out the stock several times in his investing career. However, he has continued to own a stake in the company permanently since 1993. In January this year, when American Express Company (NYSE:AXP) reported its fourth quarter earnings and issued a disappointing guidance, Berkshire Hathaway saw the value of its 15% stake in the company drop by over $1.2 billion overnight due to the slump in American Express Company’s stock. Though the stock has regained some lost grounds since then, it still trades down almost 14% year-to-date. Due to the slump in its stock price and its subpar financial performance in the past few quarters, the company recently cut the total compensation of its CEO, Kenneth Chenault, by 26% to the lowest level since 2008. While analysts generally appreciated this move, some also noted that Mr. Chenault’s pay is still relatively high considering the performance of the company under his leadership. At the 2015 Berkshire annual meeting, vice-chairman Charlie Munger highlighted that American Express’ moat has been eroded over time and the company’s path to ‘prosperity’ isn’t easy anymore.