Berkshire Hathaway Acquires More Liberty SiriusXM Shares Again

We've highlighted recently that Warren Buffett's Berkshire Hathaway has been buying Liberty Sirius XM (LSXMA / LSXMK). Well, they're at it again.

Per Form 4's filed with the SEC, Berkshire acquired 377,656 shares of LSXMA across May 26th, 30th, and 31st at weighted average prices around $41.xx. After these buys, they own over 14.86 million LSXMA shares.

The second Form 4 indicates they also bought 644,172 LSXMK shares on May 26th, 30th, and 31st at weighted average prices ranging from $40.9877 to $41.7432. After these buys, they own over 31 million LSXMK shares.

We've also previously noted that it seems likely that Berkshire's portfolio manager Ted Weschler is the one buying here.

For more on Berkshire Hathaway, check out a recent interview with Warren Buffett here.

Per Google Finance, Liberty SiriusXM is "Liberty Media Corporation owns interests in subsidiaries and other companies, which are engaged in the media and entertainment industries. The Company's principal businesses and assets include its consolidated subsidiaries Sirius XM Holdings Inc. (SIRIUS XM) and Braves Holdings, LLC (Braves Holdings), and its equity affiliate Live Nation Entertainment, Inc. (Live Nation). The Company's segments are SIRIUS XM, and Corporate and other. SIRIUS XM provides a subscription-based satellite radio service. Through its subsidiaries and affiliates, the Company principally operates in North America. The Company also owns a portfolio of minority equity investments in publicly traded media companies, including Time Warner, Inc. and Viacom, Inc. SIRIUS XM transmits music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through two satellite radio systems."

Warren Buffett's Berkshire Hathaway Boosts Phillips 66 Stake

Warren Buffett's conglomerate Berkshire Hathaway has filed a Form 3 and Form 4 with the SEC.  Per the filing, Berkshire now owns over 57.9 million shares of Phillips 66 (PSX).

Berkshire was out buying on August 26th - 28th at prices between $71.56 and $77.26.  In total, they bought over 3.17 million shares over those three days.  They now own over 10% of the company with a stake worth over $4.4 billion.

However, they had to have also acquired a ton of shares prior to that.  As the brand new issue of our Hedge Fund Wisdom newsletter flagged 10 days ago, Buffett requested confidential treatment with the SEC regarding one of his holdings for his Q2 13F filing.  PSX did not appear in his holdings list at that time so it looks like this could be the position he was requesting privacy on.

Back in the first quarter of this year, Buffett owned just 7.49 million PSX shares.  So basically between April 1st and August 28th, Berkshire ramped up its exposure to PSX in a big way.  Shares largely traded sideways over that timeframe, between $75 and $84.  During the recent market turmoil, however, they traded as low as $69.79.

Buffett has been busy lately, as he's also agreed to takeover Precision Castparts (PCP).

For more on Buffett's firm, be sure to also check out our analysis of Axalta Coating Systems (AXTA), another stock Berkshire bought in recent months.

Warren Buffett's Berkshire Hathaway To Buy Precision Castparts (PCP)

Warren Buffett's Berkshire Hathaway is set to acquire Precision Castparts (PCP) for $37.2 billion, or around $235 per share. 

Speaking with CNBC, Buffett said that the deal started to come together "about five or so weeks ago."  

Buffett's conglomerate has owned PCP for a while now and was out buying more shares in the first quarter of 2015 as shares continued to slide.  PCP has been hit due to declines in its oil and gas business exposure but the vast majority of its focus is in aerospace and that's undoubtedly what drew Berkshire to the name.

Buffett said that one of his portfolio managers, Todd Combs, spearheaded this as he bought shares for Berkshire.

Talking with CNBC, Buffett said that they'll likely do the majority of the deal with cash, and a little bit of debt.  Berkshire likes to keep around $20 billion in cash on hand, so this big buy means they probably won't do any other large deals for another year.


Other 'Winners' In The Deal?

Berkshire wasn't alone in purchasing PCP shares in Q1 either.  As we flagged in the May issue of our Hedge Fund Wisdom newsletter, PCP was a consensus new buy with the likes of Third Point, ValueAct Capital, Soroban Capital, and Farallon Capital initiating new positions.

One other very notable fund was out buying a lot of PCP as well: Lou Simpson's SQ Advisors.  Prior to founding SQ, Simpson worked at Berkshire Hathaway.  Of the above managers, he bet the biggest on PCP on a position size weighted basis, given that he allocated almost 10% of his portfolio to PCP shares.

Other big name institutions were out adding to their existing PCP stakes in Q1 as well, such as Ruane Cunniff (Sequoia Fund).

So while these funds may have 'won' in that they see their PCP shares appreciate a decent amount in a short period of time, some might lament the deal a little bit. 

Some managers were also buying in Q3 and Q4 of 2014 when prices were right around where Buffett is buying PCP out now, so their return isn't great.  Other managers might be sad to see PCP disappear from their portfolios as they saw a long-term opportunity for appreciation within the aerospace industry.  And lastly, all of the managers who just bought in Q1 will now see these gains hit by short-term capital gains tax.

Berkshire Hathaway Increases Verisign Position

Warren Buffett's Berkshire Hathaway has filed an amended 13G with the SEC.  Per the filing, Berkshire Hathaway no owns 10.4% of the company with 12,985,000 shares.

This marks an increase of over 1.29 million shares since the end of the first quarter.  The filing was made due to activity on July 31st.

This investment was likely originally made by Buffett's newest portfolio managers: Todd Combs and Ted Weschler.  Since they've joined, Berkshire has accumulated shares.  Thus far this year, VRSN has slipped from $62.95 down to a low of $46.45 before rebounding slightly to current levels of $54.84.

Verisign has been hit with a bit of uncertainty as news came out earlier in the year that the US Department of Commerce will relinquish control of ICANN.

Per Google Finance, Verisign "is a provider of Internet infrastructure services. The Company provides network confidence and availability for mission-critical Internet services, such as domain name registry services and infrastructure assurance services. Its service capabilities enable real-time name resolution for a number of global top level domains (TLDs), enable domain name registration through registrars, and provide security intelligence and cloud-based network availability services to enterprise customers. It has one reportable segment is Naming Services, which consists of Registry Services and Network Intelligence and Availability (NIA) Services. It has operations inside as well as outside the United States (U.S.). Registry Services operates the authoritative directory of all .com, .net, .cc, .tv, and .name domain names and the back-end systems for all .gov, .jobs and .edu domain names."

For more, check out notes from Berkshire Hathaway's annual meeting as well as Warren Buffett's annual letter.

Warren Buffett's Berkshire Hathaway Acquires More DaVita Shares

In a Form 4 filed with the SEC, Warren Buffett's Berkshire Hathaway has revealed new purchases in shares of DaVita (DVA). 

On November 6th, 7th, and 8th, Berkshire acquired 3,700,294 shares in total at prices ranging from $52.78 to $56.41.

After all was said and done, Berkshire now owns 35,147,124 shares of DaVita.  Keep in mind that the company had a 2-for-1 stock split on September 6th of this year.

This has been a position Berkshire has been heavily adding to ever since new portfolio managers Todd Combs and Ted Weschler came onboard.  We've highlighted Berkshire's purchases of DVA shares earlier this year in the summer, as well as in 2012.

Per Google Finance, DaVita is "a provider of dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD)."

For more on Berkshire, head to a recent interview with Warren Buffett where he said stocks are fairly priced.

Berkshire Hathaway Buys More DaVita (DVA)

Warren Buffett's Berkshire Hathaway filed a form 4 with the SEC regarding their position in DaVita (DVA).  Per the filing, Berkshire has disclosed that they purchased 639,200 shares on July 2nd and 3rd at weighted average prices ranging from $112.35 to $116.41.  After all purchases, Berkshire now owns over 15.6 million shares of DVA.

DaVita shares have recently been hit on news that a proposal by the Centers for Medicare and Medicaid Services would decrease payments to dialysis facilities by $970 million in calendar year 2014 (more details here).

Berkshire has been slowly building a large stake in DVA and we've detailed their previous purchases.  This coincided with new portfolio manager Ted Weschler joining the Berkshire team (DVA was a top holding at his previous hedge fund).

Berkshire originally built their position in DaVita between $70-85 it looks like and they've slowly added to the stake each quarter, recently buying at around $110 and now again at the prices outlined above.

Per Google Finance, DaVita is "is a provider of dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD)."

For more from this manager, we've also highlighted some other recent Berkshire Hathaway portfolio activity.

Berkshire Hathaway Buys Phillips 66 (PSX) Shares

Warren Buffett this morning on Bloomberg TV said that his Berkshire Hathaway has invested in Phillips 66 (PSX).  We've also posted up a summary of Buffett's lengthy interview.

PSX was spun-off from ConocoPhillips (COP) on May 1st and Buffett said one of his portfolio managers (either Todd Combs or Ted Weschler) have reduced holdings in COP and bought into the refining operations ~ PSX.

Owners of COP shares received 1 share of PSX for every 2 shares of COP owned as of April 16th.  Berkshire owned just over 29 million COP shares as of March 31st (before the spin-off).  Assuming that number, that would mean they received just over 14.5 million shares of PSX in the spin.

But it sounds like they've gone a step further by selling some of their post-spin COP shares and adding to their PSX stake.

For more from Berkshire Hathaway's leading man, head to notes from Buffett's meeting with MBA students.

Todd Combs of Castle Point Capital Joins Berkshire Hathaway as Investment Manager

Warren Buffett just announced that Todd Combs of hedge fund Castle Point Capital will be joining Berkshire Hathaway (BRK.A) as an investment manager at the end of the year. Buffett and Charlie Munger have been tracking Combs for three years and Combs has been running his hedge fund for the past five years.

We'd hypothesize that in the intermediate term, Combs has been brought on as a replacement for Lou Simpson since Combs is said to take control of part of Berkshire's investment portfolio. Simpson, who manages the investments for Berkshire's subsidiary, GEICO, is set to retire at the end of 2010 (the same time when Combs is set to start). On the notion that Combs could manage all of Berkshire's investments, Buffett said, "He’s got the best chance of being the successor, but if we find the right guy or gal, we’d take that person, too."

In the past, many have questioned Berkshire Hathaway's succession plans and this year there has been much talk of Li Lu joining as an investment manager. However, Buffett has just revealed that Lu will be staying with his own fund. Buffett also emphasized that Berkshire's succession will include one person handling the CEO role, and then multiple individuals could still act as investment managers in a multi-pronged approach.

Why Todd Combs?

This is the question many people are asking as he doesn't seem to be particularly well-known. Here are some potential reasons for the hire:

First, his focus on financials. Given the recent financial crisis, Combs' familiarity with these companies and niche focus on the sector gives him an advantage. In an increasingly complex financial world (derivatives, etc), Combs' expertise will come in handy considering Berkshire owns very large stakes in financials including: Wells Fargo (WFC), American Express (AXP), US Bancorp (USB), Moody's (MCO), and M&T Bank (MTB).

Second, his risk management skills. Buffett apparently described Combs' performance during the crisis as, "pretty good." According to Bloomberg, Castle Point returned +6.2% in 2009, -5.7% in 2008, +19% in 2007, and +13.6% in 2006. In Berkshire's 2007 shareholder letter, Buffett discussed the topic of hiring investment managers. In it, he said that this person needs to be, "genetically programmed to recognize and avoid risk, including those never before encountered." Given this stringent requirement, it's obvious that Buffett and company feel Combs possesses a risk management skill-set that is beyond satisfactory. (And speaking of risk, Buffett recently talked about his worst trade).

Third, his personality blends with Berkshire's culture. According to the New York Times, Buffett said that, "He’s always been enamored with Berkshire. I know he’ll be good, but he’s the right type of guy. We don’t want someone who’s trying to figure out if they can make $100 million with us, or $200 million with the next guy." And, this ties somewhat into the next reason.

Fourth, his age. Given the fact that Berkshire's leading men Warren Buffett, Charlie Munger, and Lou Simpson are getting older, Berkshire wants to bring in younger talent that can add longevity to the company. At the young age of 39, Combs can slide into Berkshire's organization and stay there for many decades, just as Buffett has. And, based on his personality, it appears that Combs is in it for the long haul. Combs received his degree in finance and multinational business operations from Florida State University. He has experience working for Florida's comptroller as well as Progressive Insurance.

Castle Point Capital's Portfolio

Given Berkshire's stamp of approval, it's only appropriate to look under the hood at Todd Combs' hedge fund to see what he's invested in. The following were Castle Point's long equity holdings as of June 30th, 2010 according to their most recent 13F filing with the SEC. The new disclosures reflecting their Q3 portfolio will be released in the middle of November.

Keep in mind that you can see what Berkshire Hathaway and prominent hedge funds are investing in via our newsletter, Hedge Fund Wisdom. But for the time being, here's Castle Point's $279 million in reported assets:

New Positions
CIT Group (CIT)
Broadridge Financial (BR)
Leucadia (LUK)
Hartford Financial (HIG)
PNC Financial (PNC)
Wells Fargo (WFC)
Chatham Lodging (CLDT)

Increased Positions
Blackrock (BLK): Increased by 78.5%
Aercap (AER): Increased by 78%
Mastercard (MA): Increased by 70%
State Street (STT): Increased by 60%
Genworth Financial (GNW): Increased by 53%
Charles Schwab (SCHW): Increased by 43%
Annaly Capital (NLY): Increased by 43%
Western Union (WU): Increased by 36%
US Bancorp (USB): Increased by 27.5%
Chubb (CB): Increased by 27.5%

Reduced Positions
JPMorgan Chase (JPM): Reduced by 39%
MB Financial (MBFI): Reduced by 21.5%
Goldman Sachs (GS): Reduced by 18.4%

Sold Out of Completely
Assurant (AIZ)
Signature Bank (SBNY)
Reinsurance Group America (RGA)
TD Ameritrade (AMTD)
First Citizens Bancshares (FCNCA)
Two Harbors Investment (TWO)

Top 25 Positions

1. US Bancorp (USB): 8.2% of reported assets
2. Mastercard (MA): 7.3%
3. State Street (STT): 6.8%
4. Western Union (WU): 6.5%
5. CME Group (CME): 5.1%
6. Renaissance Re (RNR): 5.1%
7. Pennymac Mortgage (PMAC): 4.6%
8. Chubb (CB): 4.6%
9. Starwood Property Trust (STWD): 4.5%
10. Annaly Capital Management (NLY): 4.4%
11. CIT Group (CIT): 4.3%
12. Progressive (PGR): 4.1%
13. JPMorgan Chase (JPM): 4.0%
14. Goldman Sachs (GS): 3.8%
15. Charles Schwab (SCHW): 3.6%
16. Broadridge Financial (BR): 3.5%
17. Aercap Holdings (AER): 3.4%
18. MB Financial (MBFI): 3.4%
19. Genworth Financial (GNW): 2.9%
20. United America Indemnity: 1.9%
21. Blackrock (BLK): 1.8%
22. Leucadia National (LUK): 1.8%
23. Hartford Financial (HIG): 1.6%
24. PNC Financial (PNC): 0.8%
25. First Financial (FFBC): 0.8%

As you can see, Castle Point's portfolio is very financial-laden. And, they share the same large position in US Bancorp (USB) as Berkshire Hathaway. We'd also point out Combs' preference for payment processors & money transfer services such as Mastercard (MA) and Western Union (WU). These types of companies have been long favored by hedge funds we track. The last takeaway here is that he runs a somewhat concentrated portfolio as well.

So, at least one of Berkshire's future investment managers seems to be in place. Li Lu appears to be out of the running. The question that remains is, will there be more managers added? Only time will tell. You can view Buffett's past comments on succession plans here as well as a video that examines potential Berkshire successors here.

For more on Berkshire's new hire, Carol Loomis at Fortune penned an article here.