Buffett Takes BNY Mellon Stake, Adds Wells Fargo Stock
Warren Buffett, chairman of Berkshire Hathaway Inc.
Nelson Ching/Bloomberg
Warren Buffett, chairman of Berkshire Hathaway Inc.
Warren Buffett, chairman of Berkshire Hathaway Inc. Photographer: Nelson Ching/Bloomberg
Warren Buffett’s Berkshire Hathaway Inc. disclosed a stake in Bank of New York Mellon Corp. and increased its holding in Wells Fargo & Co. as the lender posted record profit.
Buffett’s firm had 1.99 million shares of BNY Mellon, the world’s largest custody bank, at the end of the third quarter, Omaha, Nebraska-based Berkshire said today in a regulatory filing that listed the company’s U.S. stockholdings as of Sept. 30. Berkshire had 336.4 million shares of Wells Fargo, compared with 320.1 million three months earlier.
Buffett, 80, is seeking investments as Berkshire’s cash hoard builds and interest-bearing deals he struck during the financial crisis come to a close. Berkshire has increased its Wells Fargo stake in four quarters since the beginning of 2009 as reductions in short-term interest rates and financial industry rescue programs helped revive profit at lenders.
“The government is trying to help these banks,” said Paul Howard, director of research at Solstice Investment Research in Glastonbury, Connecticut. “The banks borrow from the government at zero and then lend it out to you and me at higher rates.”
BNY Mellon climbed 1.6 percent to $28.l8 at 4:48 p.m. in extended trading in New York. Wells Fargo advanced 17 cents to $27.82.
Wells Fargo, the biggest U.S. home lender, reported third- quarter profit of $3.34 billion as credit conditions improved. The San Francisco-based lender, which bought Wachovia Corp. at the depths of the credit crisis, has closed its consumer-finance branch network to improve results.
Home Depot, Iron Mountain
Buffett’s firm eliminated stakes in Home Depot Inc., the largest U.S. home improvement retailer, Iron Mountain Inc., a provider of records management, and auto retailer CarMax Inc. All of the holdings were at least partly managed by Berkshire’s Geico auto-insurance unit, according to company filings.
“They might have been held directly by Geico under Lou Simpson,” the Berkshire investment manager who is retiring at the end of this year, said Thomas Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, which holds a stake in Buffett’s firm. “Those funds are going to be consolidated in the broader portfolio at Berkshire.” An e-mail to Buffett’s assistant seeking comment wasn’t immediately returned.
Simpson, Combs
Buffett said last month that he hired hedge-fund manager Todd Combs, 39, to help with Berkshire’s investments, which included $57.6 billion in stock, $36.4 billion in bonds and a derivatives portfolio of more than $60 billion as of Sept. 30. Simpson, 73, had been described by Buffett as his backup stock- picker.
Berkshire’s stake in Comcast Corp., the largest U.S. cable- television company, declined to about 187,000 shares from 12 million on June 30. Stephen Burke, a Berkshire director, is chief operating officer at Philadelphia-based Comcast.
John Demming, a spokesman for Comcast, and Atlanta-based Home Depot’s Ron DeFeo declined to comment. A representative for Iron Mountain had no immediate comment. Attempts to reach CarMax for comment weren’t immediately successful.
Buffett has been trimming Berkshire’s equity portfolio since the 2008 financial crisis. The 80-year-old chairman, renowned for his multibillion dollar stock bets, has instead focused on buying whole companies as he prepares the firm for his eventual departure. In the third quarter, Berkshire’s equity sales exceeded purchases by about $1.2 billion, according to a Nov. 5 regulatory filing.
Berkshire’s cash holdings jumped 23 percent to $34.5 billion in the three months ended Sept. 30. That’s the company’s biggest quarter-end total since the first period of 2008 as the economic recovery and Buffett’s February takeover of Burlington Northern Santa Fe help earnings.
To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net.
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.
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