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Here's What Warren Buffett Has Been Buying and Selling

By Matthew Frankel, CFP® – Updated Aug 15, 2017 at 3:14PM

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Warren Buffett and his team made a few big moves in the second quarter.

Berkshire Hathaway (BRK.A -0.92%) (BRK.B -0.85%), the conglomerate led by Warren Buffett, recently released its quarterly SEC filing that reveals the latest activity in the company's closely watched stock portfolio. Here's what you need to know about the recent additions and subtractions from the Oracle of Omaha's stock investments.

One major addition

The only unexpected addition to Berkshire's portfolio during the second quarter was Synchrony Financial (SYF -1.06%). Berkshire reported a stake of roughly 17.5 million shares as of June 30, worth a little more than half a billion dollars.

Buffett hasn't yet said why he bought shares of the store credit card issuer, but he's had a generally bullish view of the financial industry lately, so it isn't necessarily a surprising addition. Plus, Synchrony had fallen by about 18% so far in 2017 (excluding any reaction to Buffett's purchase), so it's possible that Berkshire saw the shares as "cheap."

Warren Buffett at Berkshire Hathaway's annual meeting.

Image source: The Motley Fool.

An increased investment in one of Buffett's favorite banks

In addition to Synchrony, Berkshire made another big investment in the financial industry during the second quarter by increasing its stake in Bank of New York Mellon (BK -0.31%) by more than 50%. The bank has been a part of Berkshire's portfolio for some time now, and the stake was increased in 2016 as well. Simply put, Bank of New York Mellon has a lot of characteristics Buffett probably likes, such as a rock-solid balance sheet and diverse revenue stream.

Berkshire is betting more on the auto industry

General Motors (GM 0.57%) is one of Berkshire's highest-paying dividend stocks, and looks extremely cheap at just 6.3 times earnings. Since Buffett is a value investor, it doesn't come as a big surprise that Berkshire's GM stake increased by 10 million shares during the second quarter.

Reducing the airline exposure, except in one case

This development may surprise some investors, simply because Berkshire's airline investments are relatively new. In fact, Berkshire Hathaway's airline positions originated in the second half of 2016, less than a year before the period covered by this most recent filing. And Berkshire just increased some of its airline holdings during the first quarter of the year.

Berkshire owns four airline stocks -- American Airlines, Delta Airlines, United Continental, and Southwest Airlines. During the second quarter of 2017, Berkshire reduced its stake in the first three, leaving its Southwest position constant. The American Airlines investment was trimmed by 4.6%, the Delta stake is now 3.5% less, and the United Continental stake is 2.6% smaller than it was a quarter ago.

One stock has disappeared from Berkshire's portfolio

One stock that is notably absent from Berkshire's portfolio is General Electric (GE -0.05%). During the second quarter, Berkshire unloaded its entire $300 million stake.

Like most of the other moves discussed here, we don't know why the decision was made. General Electric did issue a disappointing earnings report recently, but this occurred after Buffett sold. It's also worth noting that Synchrony Financial was formerly the financing arm of General Electric, and was spun off in 2014, although it could be entirely coincidental that Berkshire sold GE in the same quarter it added a former part of the company to its portfolio.

Moves we already knew about

Buffett isn't always quiet about the investments he's making. For example, we already knew that Berkshire's IBM stake had been trimmed during the first and second quarters, and the recent filing was simply confirmation of the exact size of the reduction (about 10.5 million shares during Q2).

We also knew that Berkshire initiated a stake in real estate investment trust Store Capital Corp, as the stake was revealed by the REIT shortly after it was purchased.

Finally, it's worth mentioning that although Buffett said that Berkshire planned to exercise its Bank of America warrants and become the bank's largest shareholder, that move isn't reflected in the most recent filing, indicating that if the move has been completed, it happened after June 30.

Other buying and selling

In addition to the portfolio moves I've already mentioned, there were a couple of other increases and reductions in Berkshire's positions.

Berkshire's massive Apple stake, which has already been added to several times, increased by about 1.8 million shares during the quarter.

Berkshire's stake in Liberty SiriusXM grew by about 41%, while its Sirius XM stake was reduced by 20% during the quarter. While Liberty's stock structure is a bit complex, the important thing to note is that Liberty SiriusXM also represents an ownership stake in the satellite radio giant.

How to use this information

To be clear, I never suggest buying or selling a stock simply because a billionaire does, even if that billionaire is named Warren Buffett. Besides, we don't know why Buffett made these moves (other than the few he's already discussed). In addition, we don't even know if it was Buffett himself, or one of his two stock-pickers, who made each individual investment.

The point is that while it can be interesting to track Buffett's investment decisions, you should take these moves with a grain of salt. Always do your own investment research before buying or selling.

Matthew Frankel owns shares of Apple, Bank of America, Berkshire Hathaway (B shares), and General Motors. The Motley Fool owns shares of and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool owns shares of General Electric. The Motley Fool recommends Synchrony Financial. The Motley Fool has a disclosure policy.

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