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Zacks Value Trader Highlights: Taiwan Semiconductor, Chevron, US Bancorp, Apple and Amazon
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For Immediate Release
Chicago, IL – February 17, 2023 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2055570/grading-berkshire-hathaways-q4-trades)
Grading Berkshire Hathaway's Q4 Trades
Welcome to Episode #317 of the Value Investor Podcast.
(0:15) - What Can We Learn From Berkshire Hathaways 13F?
(4:30) - Breaking Down Q4 Sells and Growing Positions: How Did They Perform?
(15:50) - What Was Berkshire Hathaway Buying With Their Cash Reserves?
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The fourth quarter 2022 13-F filings are out and that means value investors get to see what stocks Warren Buffett, and Berkshire Hathaway, are buying, or selling. Many investors follow his trades to a "t" even going as far as replicating them.
But should you?
This filing had some surprising sales and few stock purchases, even though the stock market was still selling off, and many stocks were cheap on a valuation basis, and Berkshire was still sitting on a pile of cash.
What is Buffett waiting for? Is his lack of purchases a sign that he thinks stocks have further to sell-off? Or did he "miss" the bottom again, like he did in 2020's pandemic sell-off when he also didn't jump in to buy?
Let's look at 5 of the key buys and sales in Q4.
Berkshire Hathaway's Big Buys, and Sales, in the Fourth Quarter of 2022
Berkshire Hathaway first bought a position in Taiwan Semiconductor in the third quarter of 2022 to much fanfare. It was a $4.2 billion position and the first semiconductor company to be in the portfolio for years.
But in the fourth quarter, just a few months later, Berkshire sold 86% of its Taiwan Semiconductor shares. It went from 60 million shares to just 8.3 million.
What happened to the infamous Buffett strategy of the best time to sell is never? Even worse, shares of Taiwan Semiconductor have rallied big in 2023, adding 24.5%.
Does this sale of Taiwan Semiconductor make any sense?
Berkshire Hathaway has gone all in on the energy companies over the last 2 years, buying billions of dollars of Chevron and Occidental Petroleum.
But in the fourth quarter of 2022, it sold 1%, or 2.4 million shares, of its Chevron position. This was also a head scratcher to many. What's the point of selling such a small position?
Berkshire continues to sell shares of its regional banks. It first bought US Bancorp in the first quarter of 2006. But in the fourth quarter, it sold 91% of its shares.
US Bancorp is now just a 0.10% position in the Berkshire portfolio. Will it be completely eliminated in Q1 of this year?
US Bancorp shares are up 12.5% year-to-date, but over the last 5 years are down 11.7%. It's been tough owning the banks.
Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. But that didn't keep Berkshire from adding to its position in the fourth quarter as the Apple shares sold off.
Berkshire bought 333,856 shares of Apple in the fourth quarter, but it has 895 million shares so this is really a small buy. Why not buy more? Berkshire has plenty of cash to do so.
Does Apple remain the jewel in the Berkshire crown?
Berkshire has a small position in Amazon that it bought in the first quarter of 2019. It has never sold, nor bought, any more shares.
But Amazon's shares fell 50% last year and are still down 35% over the last year even with 2023's rally.
Why not buy more, like Berkshire did with Apple, when they sold off? This has not been a good trade for Berkshire. From Mar 29, 2019 to Feb 15, 2023, the shares are up just 12.6% but, meanwhile, the S&P 500 was up 45.9% during the same time. And that's without the dividends included.
What's going on with the Amazon position?
What Else Do You Need to Know About Berkshire's Fourth Quarter Trades?
Listen to this week's podcast to find out.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Value Trader Highlights: Taiwan Semiconductor, Chevron, US Bancorp, Apple and Amazon
For Immediate Release
Chicago, IL – February 17, 2023 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2055570/grading-berkshire-hathaways-q4-trades)
Grading Berkshire Hathaway's Q4 Trades
Welcome to Episode #317 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The fourth quarter 2022 13-F filings are out and that means value investors get to see what stocks Warren Buffett, and Berkshire Hathaway, are buying, or selling. Many investors follow his trades to a "t" even going as far as replicating them.
But should you?
This filing had some surprising sales and few stock purchases, even though the stock market was still selling off, and many stocks were cheap on a valuation basis, and Berkshire was still sitting on a pile of cash.
What is Buffett waiting for? Is his lack of purchases a sign that he thinks stocks have further to sell-off? Or did he "miss" the bottom again, like he did in 2020's pandemic sell-off when he also didn't jump in to buy?
Let's look at 5 of the key buys and sales in Q4.
Berkshire Hathaway's Big Buys, and Sales, in the Fourth Quarter of 2022
1. Taiwan Semiconductor (TSM - Free Report)
Berkshire Hathaway first bought a position in Taiwan Semiconductor in the third quarter of 2022 to much fanfare. It was a $4.2 billion position and the first semiconductor company to be in the portfolio for years.
But in the fourth quarter, just a few months later, Berkshire sold 86% of its Taiwan Semiconductor shares. It went from 60 million shares to just 8.3 million.
What happened to the infamous Buffett strategy of the best time to sell is never? Even worse, shares of Taiwan Semiconductor have rallied big in 2023, adding 24.5%.
Does this sale of Taiwan Semiconductor make any sense?
2. Chevron (CVX - Free Report)
Berkshire Hathaway has gone all in on the energy companies over the last 2 years, buying billions of dollars of Chevron and Occidental Petroleum.
But in the fourth quarter of 2022, it sold 1%, or 2.4 million shares, of its Chevron position. This was also a head scratcher to many. What's the point of selling such a small position?
Is Buffett still a big believer in Chevron?
3. US Bancorp (USB - Free Report)
Berkshire continues to sell shares of its regional banks. It first bought US Bancorp in the first quarter of 2006. But in the fourth quarter, it sold 91% of its shares.
US Bancorp is now just a 0.10% position in the Berkshire portfolio. Will it be completely eliminated in Q1 of this year?
US Bancorp shares are up 12.5% year-to-date, but over the last 5 years are down 11.7%. It's been tough owning the banks.
4. Apple (AAPL - Free Report)
Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. But that didn't keep Berkshire from adding to its position in the fourth quarter as the Apple shares sold off.
Berkshire bought 333,856 shares of Apple in the fourth quarter, but it has 895 million shares so this is really a small buy. Why not buy more? Berkshire has plenty of cash to do so.
Does Apple remain the jewel in the Berkshire crown?
5. Amazon (AMZN - Free Report)
Berkshire has a small position in Amazon that it bought in the first quarter of 2019. It has never sold, nor bought, any more shares.
But Amazon's shares fell 50% last year and are still down 35% over the last year even with 2023's rally.
Why not buy more, like Berkshire did with Apple, when they sold off? This has not been a good trade for Berkshire. From Mar 29, 2019 to Feb 15, 2023, the shares are up just 12.6% but, meanwhile, the S&P 500 was up 45.9% during the same time. And that's without the dividends included.
What's going on with the Amazon position?
What Else Do You Need to Know About Berkshire's Fourth Quarter Trades?
Listen to this week's podcast to find out.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.