Pending mysteries from the Berkshire portfolio review

(This is the Warren Buffett Watch newsletter, news and analysis of all things Warren Buffett and Berkshire Hathaway. You can subscribe here to receive it every Friday evening in your inbox.)

The steep decline in the number of stocks in Berkshire Hathaway’s equity portfolio revealed in last Friday’s first quarter 13F SEC filing was larger than expected but not entirely surprising.

The Wall Street Journal reported that new CEO Greg Abel will sell most or all of the stocks held by Todd Combs, who left to work at JPMorgan late last year.

It is difficult to explain how the two new words, Delta Air Lines again Macy’sentered the portfolio.

Berkshire he almost never reveals who made the decisions to buy and sell each stock, but the rule was that Warren Buffett managed the large positions, and one of the two portfolio managers (now alone) was responsible for the smaller positions.

Abel, who is now responsible for the company’s investments, replaces Buffett in that formation.

Oracle, however, still goes into the office five days a week as chairman, and in late March he said CNBC’s Becky Quick he still makes investment calls but doesn’t do anything that Abel thinks is “wrong.”

Presumably, Abel also wouldn’t do anything Buffett opposed.

That makes Delta’s reintroduction to the portfolio after a six-year exile a mystery.

Buffett, who suggested in early 2008 that a “far-sighted capitalist” should have shot Orville Wright in Kitty Hawk, would not be willing to give the airline stock a third chance after the troubled investment of US Airways in 1989 and the return of losses in 2016 in the sector that he abandoned in 2020 at the beginning of the Covid-19 pandemic.

And, in fact, the Wall Street Journal reported Monday that Buffett told the paper he was not involved in the Delta decision.

But it added Berkshire “seems unable to stop its love affair with airplanes” as Abel has shown “love for them from the beginning, too.”

Writing for The Motley Fool, Geoffrey Seiler was disappointed that Abel appeared to be repeating Buffett’s mistakes.

At Barron’s, however, Andrew Bary thinks Delta is “likely” to be bought by Ted Weschler, Berkshire’s remaining portfolio manager.

At $2.6 billion, as of March 31, “it’s exactly the same as the roughly $3 billion in leverage he’s gotten this year as his portfolio has gone from 5% to 6%, based on Abel’s comments in his annual report.”

Barry also notes that Weschler “has a value curve, and Delta is an industry leader with a valuation of about 10 percent.”

Either way, it’s at least a temporary success.

Delta Holding is now valued at $3.0 billion, an increase of 14.5% from the end of the first quarter.

That includes an 8.4% jump over the past week to a record close of $76.14.

Macy’s new Berkshire position is also a short-term win, but the total amount is just a fraction of the Delta purchase.

It went from $55 million as of March 31 to $63 million now, a 14.2% increase, including a 12.2% rally this week.

Generally, a position of less than 0.02% of Berkshire’s equity portfolio will be considered a portfolio manager activity.

But in that March interview with CNBC, Becky asked him if he still buys new and he replied, “I bought a little one, but we don’t get things – we didn’t get before.”

CNBC thinks he may be referring to the Macy’s stake but notes that he may have been referring to international acquisitions or other investments that would not have to be included in a 13F filing.

This is Barron’s site and believes Buffett’s comments may have been in reference to Macy’s position.

It sees the retailer’s “significant holding position” as a combination and recalls that in 2015, Buffett personally bought an 8% stake in Seritige Growth Properties, which controlled the stores and apartments created by Sears.

“It will be remarkable if the purchase of Macy’s is made by Buffett. It will show that at 95, he still loves the investment game and cannot resist a low-priced stock even if the size of the holding is very small in Berkshire.”

Two new filings in Japan show that Berkshire continues to build its positions in at least two of the country’s largest “trading houses.”

Yours Mitsubishi the figure increased to 11.1% as of April 30, from 9.7% previously, while Sumitomo the figure rose to 10.3% as of May 12, up from 9.3%.

Abel has been involved in Berkshire’s Japanese investments for the past few years and is almost certainly after buying more.

Berkshire may buy more shares in some of its Japanese stocks but only needs to file revisions when the holding ratio rises by 1% or more.

The total value of the six shares, as currently disclosed, is approximately $46 billion.

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BRK.A stock price: $728,641.00

BRK.B stock price: $486.38

BRK.BP/E (TTM): 14.48

Berkshire’s market capitalization: $1,048,584,611,864

Berkshire Cash as of Dec. 31: $373.3 billion (Down 2.2% from Sept. 30)

Excluding Railroad and Debt Relief Bills Payable: $369.0 billion (Increased 4.1% from September 30)

Berkshire repurchased $234 million of its shares in Q1 2026.

Berkshire’s top publicly traded shares in the US and Japan, by market value, based on recent closing prices.

Withholding as of March 31, as reported in Berkshire Hathaway’s May 15 13F filing, except for:

A complete list of holdings and current market values ​​is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about this book to alex.crippen@nbcuni.com. (Sorry, but we don’t send questions or comments to Buffett himself.)

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Also, Buffett’s annual letters to shareholders are highly recommended reading. There is a collection here on the Berkshire website.

– Alex Crippen, Editor, Warren Buffett Watch