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Media General Inc (MEG), NOW Inc (DNOW), and Lee Enterprises, Incorporated (LEE): Should You Immitate Warren Buffett’s Small-Cap Picks?

On the other hand, NOW Inc (NYSE:DNOW) represents a relatively new position in Berkshire’s portfolio. The investor initiated a stake during the second quarter of 2014 and owns 1.83 million shares, unchanged since then. However, so far it seems like the investor is losing money from this position, since the value dropped to $46.97 million at the end of 2014, from $66.10 million disclosed as of the end of June. NOW is a small-cap company engaged in services and solutions for the midstream and downstream energy and industrial sectors. It went public at the end of May, 2014 after it was spun-off from National-Oilwell Varco, Inc. (NYSE:NOV). Even though the value of Berkshire’s stake declined, the investor did not purchase the shares but received them after the spin-off. Berkshire holds 5.26 million shares of National-Oilwell Varco as of the end of 2014, the stake was significantly reduced from 8.80 million shares the fund held at the end of March, 2014. Another shareholder of NOW Inc (NYSE:DNOW) is William B. Gray’s Orbis Investment Management, which owns 10.69 million shares, according to its latest 13F filing.

Lee Enterprises, Incorporated (NYSE:LEE) is the smallest company in Berkshire Hathaway’s equity portfolio, sporting a market cap of $162 million. Mr. Buffett owns 88,900 shares of the company, valued at $397,000. The position in the publishing company was initiated during the first quarter of 2012 and as the stock more than doubled since then, the stake was cut from the initial 1.66 million shares, although during the second quarter of 2012, Mr. Buffett boosted his exposoure to Lee Enterprises, Incorporated (NYSE:LEE) to 3.23 million shares. In its last financial report, for the first quarter of fiscal 2015, the company posted revenue of $175 million, slightly down from $176 million a year earlier, while its profit declined by 17% on the year to $10 million on the back of increased operating expenses and other costs. Billionaire David E. Shaw’s D.E. Shaw is another investor that holds around 226,000 shares of Lee Enterprises, Incorporated (NYSE:LEE) as of the end of last year. 

Disclosure: none

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