VOO Stock – A Look at Berkshire Hathaway’s Smallest Investments
The top investments in Berkshire Hathway’s (NYSE:BRK.A) (NYSE:BRK.B) portfolio, including the likes of Apple Inc. (NASDAQ:AAPL) and Bank of America Corp. ((NYSE:(BA))C), are frequently analyzed by investors and financial commentators.
However, the smaller investments in Berkshire’s portfolio are often overlooked.
It’s unlikely Warren Buffett (Trades, Portfolio) had any input in these investments as he has previously said that any investments worth less than $1 billion were likely picked out by his portfolio managers, Todd Combs and Ted Weschler.
Still, these money managers are highly accomplished investors in their own right. So I don’t think we should be ignoring these positions. There’s also a chance some of the smaller holdings could have been initiated by Buffett at an earlier date.
With that in mind, let us take a look at some of Berkshire’s smallest holdings.
Berkshire’s small stock holdings
With an equity portfolio worth nearly $270 billion at the end of 2020, it seems unlikely that Berkshire would have any interest in acquiring holdings worth less than $100 million for its portfolio. That’s not the case. At the end of 2020, the portfolio contained eight different positions worth less than $100 million.
The smallest was United Parcel Service Inc. (NYSE:UPS). At the end of 2020, the sprawling conglomerate owned 59,400 shares of the logistics company with a total market value of $10 million.
According to my research, Berkshire first started buying shares of this business back in the fourth quarter of 2006. It bought as many as 1.43 million shares, making it a 0.2% portfolio weight.
The conglomerate held on to this position until the second quarter of 2012. It then reduced the holdings to 59,400 shares, where it remains today.
Despite the small size of this investment, it has produced relatively good returns. Over the past decade, it has produced a total annual return of 10.6%. Over the past 15 years, it has produced a total return of 6.6% per annum.
Interestingly, the next most minor position in Berkshire’s portfolio after UPS was an S&P 500 exchange-traded fund. For some reason, the conglomerate owned two S&P 500 ETFs at the end of 2020, Vanguard’s (VOO) and SPDR’s (SPY). Both of these holdings were worth around $15 million each at the end of the year.
Liberty Latin America Ltd. ((NASDAQ:LI)LA) (LILAK) was the third-smallest holding in the portfolio at the end of 2020. Berkshire owned two different share classes, A and C, at the end of the year.
Berkshire actually owns a significant amount of stock in Liberty-related businesses.
The largest holding was Liberty SiriusXM Series C (NASDAQ:LSXMK) at the end of 2020. The group owned a $1.9 billion holding in the business at the end of the year. Liberty Sirius XM Series A (NASDAQ:LSXMA) stock was worth another $641 million. Meanwhile, Berkshire also owned shares in Liberty Global Inc (LBTYA) and Sirius XM Holdings Inc. (SIRI). Combined, these holdings were worth around $3 billion at the end of 2020. If this were just one position, it would Bershire’s 12th-largest holding.
Moving back to small holdings, Berkshire owned just 578,000 shares of Mondelez International (MDLZ) at the end of 2020. This position was worth just $34 million at the end of the year. The conglomerate has had some interest in this business since the fourth quarter of 2007. It was one of the most significant holdings in the portfolio at the beginning of 2009. Since then, Buffett and his team have pared back the position from an initial investment of nearly 140 million shares.
Like UPS, the investment has been a steady performer. It has produced a total return of 10% per annum over the past decade and 7.4% over the past 15 years. Although these returns have lagged the market, the stock has yielded a steady return on Berkshire’s cash.
Disclosure: The author owns no stocks mentioned.
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About the author:
Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors.
Rupert holds qualifications from the Chartered Institute for Securities & Investment and the CFA Society of the UK. He covers everything value investing for ValueWalk and other sites on a freelance basis.
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