Warren Buffett’s Berkshire Hathaway (BRKB) bought Royalty Pharma (RPRX) and Floor & Decor (FND) for the first time in the third quarter, while adding to Chevron (CVX) and cutting stakes in drug stocks further, a 13F regulatory filing revealed. Royalty Pharma stock and Floor & Decor stock jumped late.
In Q3, Buffett’s Berkshire bought more than 13 million shares of Royalty Pharma, which gives investors exposure to biotech without taking big drug development risks. He also picked up more than 800,000 shares of Floor & Decor, according to 13F filings tracked by whalewisdom.com.
Meanwhile, Warren Buffett sold more shares in drug stocks, exiting Merck (MRK) entirely. He also slashed stakes in AbbVie (ABBV) and Bristol-Myers Squibb (BMY), after opening those positions in Q3 2020 and reducing them in Q2 2021. Buffett also pared stakes in Mastercard (MA) and Visa (V). He grew a stake in Chevron.
Merck, Visa and Chevron are all Dow Jones stocks.
Top holdings, including Apple (AAPL) and Amazon (AMZN), stayed steady.
Berkshire remained a seller of stocks in Q3, the company said in an Nov. 6 earnings report. The regulatory 13F filing late Monday detailed changes to investing legend Buffett’s Dow stocks-heavy portfolio last quarter.
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FND stock popped 7.6% in late trade on the stock market today, after closing down 1.4%. Royalty Pharma also gained 5.5% in Monday’s aftermarket, after easing 0.5% in the regular session.
News of the Berkshire chief’s buys can send stocks soaring, as RH stock did in 2019 and 2020. Berkshire tends to keep those 13F holdings for years or even decades. Marked by low turnover and high conviction, Warren Buffett’s stock portfolio is a popular model in the investment community.
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In Q3, Berkshire’s net stock sales of $1.95 billion was up from $1.1 billion in Q2 but down from Q1’s $3.9 billion, marking the fourth straight quarter of selling.
Buffet’s stock portfolio remains highly concentrated in a handful of companies. In Q3, 68% of its value was in Apple (AAPL) ($120.4 billion) and Bank of America
(BAC) ($31.3 billion). Also, American Express (AXP) ($18.3 billion), and Coca-Cola (KO) ($21.9 billion).
Meanwhile, Berkshire bought back $7.6 billion in BRKB stock, up from $6 billion in Q2 and $6.6 billion in Q1. It repurchased a record $27.4 billion Berkshire Hathaway shares in 2020.
IBD generally uses a different stock-picking strategy than Buffett does, but some Warren Buffett stocks are found on the IBD 50 list of top growth stocks. IBD has a screen of stocks that meet the Buffett investment strategy.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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