Aug. 15 (Bloomberg) -- Warren Buffett's Berkshire Hathaway Inc. took a position in Dow Jones & Co., the latest target of Rupert Murdoch's News Corp., and more than quadrupled its holdings in the two biggest U.S. health insurers in the second quarter.

Berkshire held 2.78 million Dow Jones shares on June 30, the Omaha, Nebraska-based investment firm said in a Securities and Exchange Commission filing yesterday. The company didn't report a stake in the Wall Street Journal publisher in the previous quarter, though SEC rules allow some disclosures to be delayed.

Dow Jones, which accepted Murdoch's $5.2 billion offer Aug. 1, presented an opportunity for Berkshire even though Buffett didn't consider the company attractive as an acquisition target. Murdoch's $60-a-share bid was 65 percent higher than Dow Jones's share price before his overture became public May 1. In the intervening months, the stock averaged $56.

``There's no way he would have bought this company outright, especially in a bidding war, but he loves arbitrage,'' said Mohnish Pabrai, who oversees about $600 million, including shares of Berkshire, as managing partner at Pabrai Investment Funds in Irvine, California. He probably bought the stake after Murdoch's May offer, figuring $60 was a ``pretty certain thing,'' Pabrai said.

Buffett, who took control of Berkshire four decades ago, seeks bargains on out-of-favor stocks and companies. The 76-year-old billionaire chairman transformed a failing textile manufacturer into a holding company with a $170 billion market value and interests in dozens of industries as diverse as insurance and candy making.

Copycat Investing

Berkshire, which owns the Buffalo News and is the largest shareholder in Washington Post Co., wasn't a suitor for Dow Jones, Buffett told reporters after Murdoch made his move in May. The price News Corp. floated involved an ``ego'' premium beyond Dow Jones's economic value, and the Internet is destroying the business model for newspapers, he said.

Dow Jones shares were unchanged in New York Stock Exchange composite trading. Berkshire advanced $1,050, or 1 percent, to $111,200.

The timing of Berkshire's purchases is sometimes unclear because Buffett requests the SEC's permission to keep certain positions temporarily confidential to avoid copycat investing. A review of the company's quarterly SEC filings showed it hadn't disclosed any stake in Dow Jones for at least five years, though Berkshire may still amend filings for past periods.

As for other industries, UnitedHealth Group and WellPoint Inc., the country's two biggest health insurers, were increasingly appealing in the second quarter, as was Johnson & Johnson, the world's largest health-products company, and Sanofi-Aventis SA, France's largest drugmaker.

Health Insurers

Berkshire's stake in Minnetonka, Minnesota-based UnitedHealth rose to 4.8 million shares on June 30 from 1.02 million on March 31, yesterday's filing shows. The holding of Indianapolis-based WellPoint increased to 4.2 million shares from 979,700. The Johnson & Johnson position rose 9.2 percent to 53.1 million shares, while Sanofi quadrupled to 3.53 million American depositary receipts.

UnitedHealth shares rose 64 cents, or 1.3 percent, to $49.12; WellPoint increased $1.42, or 1.8 percent, to $78.39; Johnson & Johnson gained 17 cents to $61.30, and ADRs of Sanofi fell 89 cents, or 2.2 percent, to $38.82.

Bank stocks proved attractive to Berkshire too. The company showed its first stake in Bank of America Corp., the second-largest U.S. bank, in at least five years. It held 8.7 million shares on June 30.

Bank of America, U.S. Bancorp

Already the largest shareholder of San Francisco-based Wells Fargo & Co., Berkshire added more of the second-biggest U.S. home lender, boosting the stake 11 percent to 257.7 million shares during the quarter. A position in Minneapolis-based U.S. Bancorp, the No. 6 bank, rose 59 percent to 37.1 million shares.

Bank of America increased 37 cents, or 0.8 percent, to $48.23; Wells Fargo fell 9 cents, or 0.3 percent, to $33.57; U.S. Bancorp advanced 13 cents, or 0.4 percent, to $29.68.

Other financial stocks were reduced. Berkshire pared its stake in Englewood, Colorado-based Western Union Co., the biggest U.S. money-transfer business, 68 percent to 3.2 million shares; Minneapolis-based Ameriprise Financial Inc., the investment adviser spun off from American Express Co. in 2005, dropped 41 percent to 2.52 million shares.

Western Union fell 8 cents to $18.92; Ameriprise declined 32 cents to $54.88.

Union Pacific, Norfolk

Berkshire, the biggest shareholder in Burlington Northern Santa Fe Corp., omitted information on Union Pacific Corp. and Norfolk Southern Corp. in yesterday's filing, invoking confidential treatment. At the end of March, the company held 10.5 million shares of Omaha, Nebraska-based Union Pacific, the largest U.S. railroad, and 6.36 million shares of Norfolk, Virginia-based Norfolk, No. 4 in the industry.

Burlington Northern dropped 94 cents, or 1.2 percent, to $79.05; Union Pacific declined $5.49, or 4.9 percent, to $107.65; Norfolk Southern fell 71 cents, or 1.4 percent, to $49.37.

The company didn't report any holdings of retail furniture company Pier 1 Imports Inc. or tax preparer H&R Block Inc. as of June. At the end of March, it held 1.48 million shares of Forth Worth, Texas-based Pier 1 and 1.25 million shares of Kansas City, Missouri-based H&R Block. Pier 1 fell 34 cents, or 5.3 percent, to $6.03; H&R Block fell 97 cents, or 5 percent, to $18.28.

Berkshire trimmed its position in Bermuda-based Tyco International Ltd. 37 percent to 6.3 million shares on June 30. The conglomerate, whose former chief executive officer is now in jail, spun off two units June 29.

To contact the reporters on this story: Josh P. Hamilton in New York at jphamilton@bloomberg.net; Erik Holm in New York at eholm2@bloomberg.net

Last Updated: August 15, 2007 17:26 EDT