With the first quarter of 2014 officially in the books, The Motley Fool takes a look at some of the biggest winners from Warren Buffett's portfolio at Berkshire Hathaway (BRK.A -0.34%) (BRK.B -0.01%).
Stable performance
The first three months of 2014 have been interesting from a stock market perspective, as the S&P 500 fell nearly 6% from the beginning of January to February, but recovered nicely to just north of 1% through the end of March. Essentially the same return is true of Buffett, as the greater than $100 billion portfolio would've had a return of $1.1 billion, provided he didn't sell a single share in any company.
Interestingly enough though, Buffett saw 17 companies with their returns in the green, but 26 of them were in the red. Yet he had a few big winners, including his well-known position Wells Fargo (WFC -0.26%) along with big gains from DirecTV (DTV.DL) and the little discussed USG (USG).
Source: Flickr / Matthew Devalle.
The banking behemoth
Wells Fargo begun 2014 with the same continued and stable improvement which has marked it since the depths of the financial crisis. It announced that its net income in 2013 hit a new record, as it grew by 16% to $21.9 billion, and once again promised remarkable results compared to peers.
As a result, its stock price is up 10% and Buffett has netted more than $2 billion from the largest single position held by Berkshire.
Yet perhaps what is even more remarkable about Wells Fargo is the recent announcement of its approved plan from the Federal Reserve to bump its dividend from $0.30 to $0.35 per share, and raise its stock buyback budget. While the bank has been mum on the timing of its buybacks, it did announce its board of directors approved 350 million shares to be repurchased, which would be a staggering $17.5 billion worth at today's prices.
When you consider Buffett has long made known his affection for firms that repurchase shares and provide dividends, he likely is even happier about those plans than the increase in the stock price.
The television titan
The next holding of Buffett which delivered strong returns is DirecTV, which brought Buffett more than $250 million on the $2.5 billion investment. Like Wells Fargo, it too had a strong 2013, as its earnings per share jumped 18%. Its revenue was up in both the U.S. and Latin America, and it noted it added 1.2 million new subscribers on the year.
In addition, DirecTV noted its board of directors approved a sizable repurchase plan -- $3.5 billion worth -- which follows $4.0 billion in share repurchases last year. Like Wells Fargo, one has to think Buffett applauds the move from DirecTV to buy back its stock.
The construction conglomerate
Last on the list is USG Corporation, a firm that manufactures construction materials. It announced remarkable results in February, and its stock rose 13% on the day it reported earnings where its sales were up 12%, and its earnings nearly doubled analysts' expectations. It's come down slightly since then, but altogether the company is up more than 15% through the first three months of the year.
Currently Buffett owns more than 30% of the firm, so Buffett is undoubtedly excited to see great returns which boost the price of the stock.
The bottom line
While things for Berkshire Hathaway weren't eye popping or staggering, even despite some big losses from his notable investments -- Coca-Cola hasn't had a great year thus far -- 2014 is once again shaping up to be another good year for Warren Buffett.
