Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) made headlines when the company disclosed that Warren Buffett had purchased $3.5 billion in ExxonMobil stock in the second quarter. But the real news is the continued success of the smaller investments that returned 17% from the second quarter to the third.
Berkshire Hathaway has less money in its investment portfolio after you exclude the addition of ExxonMobil, in large part because of relatively sizable paper losses in a few of the biggest investments. But there were seven smaller positions that saw outsized returns:
As a result of solid second-quarter earnings, with earnings per share up 50% excluding special items and the $250 million purchase of the newspaper business by fellow billionaire and Amazon.com founder Jeff Bezos, the stock of Washington Post has been on quite a run of late. In fact, it's up more than 33% since the end of June. Buffett recently said of Bezos: "It's a tremendous accomplishment what Jeff Bezos has done -- I tip my hat to him. He's a great businessman and a good guy, too." Considering he helped contribute to a 26% gain in one of Buffett's investments, it's easy to suspect Buffett may like him even more now.
USG (NYSE: USG )
This construction material manufacturer is one of the smaller investments in the Berkshire Hathaway portfolio, but it reported strong results in the second quarter, with a 15% increase in revenue. In addition, its net income swung from a loss of $18 million in the second quarter of 2012 to a gain of $26 million in 2013. USG stock has been a bit of a roller coaster this year, but the past few months have been good for this building products company.
Suncor Energy (NYSE: SU )
A Canadian oil sands company, Suncor is one of the leaders in that country, with the world's third largest holding of oil reserves. Suncor is under the guidance new CEO Steve Williams, who has pledged to buy back 10% of the company's outstanding shares and has already doubled the dividend. He's also said he plans on increasing production capacity by 100,000 barrels per day through low-risk projects. Buffett and team just bought Suncor in the second quarter of this year, and while the company didn't report the greatest results, its stock still had a solid run in the third, and Buffett is undoubtedly pleased with how the company has performed so far with Williams at the helm.
Viacom's stock surged following its rock-solid second-quarter earnings announcement, where its revenues rose by 14% and its earnings per share were up by 33% compared with the third quarter of last year. In addition, the company announced that it is doubling its share buyback plans from $10 billion to $20 billion. These moves and others have helped boost the price of this entertainment giant and yield dollars to Buffett and Berkshire Hathaway.
Liberty Media now holds a controlling stake in Sirius XM Radio, and the satellite-radio giant helped Liberty deliver another solid quarter when it reported earnings the third quarter. There wasn't a ton of big news coming out of Liberty Media that caused its stock to shoot up, but this media conglomerate continued its solid run in the third quarter, and the stock is now up almost 40% year to date.
Buffett unloaded a big portion of Berkshire's stake in Moody's last quarter, as he and his team sold off about 12% of the shares Berkshire held. He didn't repeat that move this quarter and instead chose to hold onto the company and rake in the gains. Like the others on this list, Moody's saw a great second quarter, and its earnings per share rose by 32% while its revenue jumped 18%. The company also increased its dividend by 25%, and it announced that it will repurchase a total of $1 billion worth of its common stock in 2013. An increased dividend and share repurchases were probably music to Buffett's ears, and that could've led to his decision to retain his position in the company.
General Motors (NYSE: GM )
Lastly, there's General Motors, and although it had the lowest raw percentage gain -- up 8% -- it was another solid quarter for this American automotive titan. GM continued to report strong sales growth and cash flow year to date in the second quarter, and its sales have continued to be well above where they stood in 2012. Although he didn't add more to his GM stake in the third quarter, as he did in the second, Buffett is undoubtedly pleased that the stock has performed so well.
More from Warren Buffett and Berkshire Hathaway
In all of this we can see the diversified nature of Buffett's portfolio, and how he continues to pick winners. If you'd like to see more of what he owns, check out the following infographic. And if you'd like to truly learn how Buffett has made his billions through the years, check out the indispensable investment advice he's given in the best of Warren Buffett's wisdom a new special report from The Motley Fool. Click here now for a free copy of this invaluable resource.