Warren Buffett's Berkshire Hathaway bought shares of Taiwan Semiconductor for the first time during the third-quarter bear market, while dumping Store Capital entirely.
What Warren Buffett Bought, Sold In Q3
Buffett-led Berkshire picked up roughly 60 million shares of Taiwan Semiconductor worth more than $4.1 billion, according to Berkshire's latest 13F filed late Monday, as tracked by whalewisdom.com.
In October, Taiwan Semi, also known as TSMC, the world's largest contract chipmaker, delivered a Q3 beat-and-raise, defying weakness in the chip sector. TSM stock surged 10.6% to 80.50 on the stock market today, extending last week's rally above the 50-day moving average.
Besides Taiwan Semi, Berkshire Hathaway opened positions in Louisiana Pacific and Jefferies Financial Group during the Q3 bear market. Berkshire bought 5.8 million shares of Louisiana Pacific, a manufacturer of building products and engineered wood components, worth nearly $297 million. It bought roughly 433,000 shares of Jefferies Financial Group, a global investment banking and capital markets firm, worth $12.8 million.
LPX stock soared 7.8% to 63.52 Tuesday, vaulting above the 200-day moving average. JEF stock rose 2.1% to 37.67 Tuesday.
During Q3, Berkshire grew existing stakes in several stocks: in Occidental Petroleum by 22%; Paramount Global by 16%; RH, formerly Restoration Hardware, by 8%; Celanese by 6%; and Chevron by 2%. The conglomerate bought 35.8 million more shares of OXY stock; 12.8 million more shares of Paramount Global, whose Paramount+ video streaming service is a Netflix and Disney+ rival; and 3.9 million more shares of CVX stock. PARA stock climbed 5.1% to 19.44 Tuesday.
While exiting Store Capital last quarter, Berkshire cut existing holdings in other stocks: in U.S. Bancorp by 55%; Bank of New York Mellon by 14%; Activision Blizzard by 12%; General Motors by 5%; and Kroger by 4%.
Store Capital, a real estate investment trust or REIT, is being acquired by GIC, a global institutional investor, and funds managed by Oak Street, in an all-cash deal valued at $14 billion.
The Q3 Berkshire earnings report on Nov. 5 had already revealed that Buffett was a net buyer of stocks, including OXY stock, during a volatile Q3. But investors had awaited the 13F filing, which arrived Monday after the market close, to learn more about which stocks Buffett bought and sold last quarter.
The S&P 500 index has rebounded since Mid-October, after ending Q3 in bear market territory for a second consecutive quarter.
Top Berkshire Hathaway Stock Holdings
In Q3, Berkshire kept several top holdings in Warren Buffett's Dow stocks-heavy portfolio steady, according to the 13F filing late Monday.
The conglomerate's top stock holding by market value is Apple, with the stake worth a whopping $123.66 billion at the end of September. But Bank of America is the No. 1 stock by number of shares held, with AAPL stock at No. 2 by that metric. In addition, American Express, Coca Cola and Kraft Heinz count among Buffett's biggest stock holdings by number of shares.
A smaller but notable holding is Amazon. Berkshire maintained positions in each of these holdings last quarter.
Warren Buffett has a long-term track record of beating the market with his picks. The Berkshire chief has earned a reputation as a buy-and-hold investor, holding stocks for years or even decades. The company has held AAPL stock since Q1 2016 and KO stock since Q1 2001, for example.
Investors track Berkshire's 13F filings to see where the investing legend is putting his money to work in the stock market. A new Warren Buffett stock buy can send shares of that company soaring.
Time The Market With IBD's ETF Market Strategy
In Q3, Warren Buffett's stock purchases exceeded stock sales by $3.7 billion, including $2 billion invested in OXY stock. Berkshire Hathaway also repurchased $1.05 billion of its own shares.
Amid Q3 volatility, Berkshire recorded a $10.5 billion loss on equity investments. Meanwhile, its cash hoard grew from $105.4 billion at the end of June to $109 billion at the end of September.
Thus far in 2022, Berkshire has picked up the pace of investment activity. It notably raised its energy bet following the Feb. 24 Russian invasion of Ukraine, which disrupted global oil and gas supplies. In 2021, Berkshire Hathaway mostly played defense as the stock market marched higher.
B-class shares of Berkshire stock gained 0.4% to 309.98 Tuesday. Shares were unchanged in premarket trade on the stock market today. Apple stock advanced 1.2% to 150.04 on Tuesday.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
