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Warren Buffett Gets Krafty


Berkshire Hathaway's quarterly holdings at a glance.


Legendary investor Warren Buffett and his investment successes and failures have been well chronicled in a number of books and publications throughout the years. Wannabe investors simply eat that stuff up.

Every quarter the investment community -- retail and institutional investors alike -- pour over Berkshire Hathaway's (BRK-A) statement of holdings much like a kid would peruse the Toys "R" Us catalog during holiday season. Their hope is to glean some tidbit of information, or to learn the method behind Buffett's madness. The first quarter was no exception. After the closing bell Thursday, the firm's investment holdings hit the tape in all their glory.

According to Bloomberg, Berkshire's March 31st statement revealed that it raised its holdings in Kraft (KFT), Wells Fargo (WFC), UnitedHealth Group (UNH), WellPoint (WLP) and Ingersoll- Rand (IR). It lowered its holdings in Iron Mountain (IRM).

CNBC went on to note that Berkshire Hathaway had also eliminated its position in Ameriprise Financial (AMP) and increased its position in U.S. Bancorp (USB).

It's hard to get inside Buffett's head, but what can be gleaned by looking at this statement of holdings?

Kraft: The stock is currently in the lower end of its 52-week trading range. However, the company continues to enjoy excellent name recognition. Plus, its wares can be found in stores around the world. And over the long haul, if food-related demand picks up in parity with the world's population, it looks like a no-brainer.

Wells Fargo: Bloomberg pointed out that Berkshire's position in the bank "increased by 1.4 million shares to about 290.7 million". This looks like classic Buffett, taking advantage of the pullback in the stock over the past year. Note that while the banking and financial services space remains under pressure, Wells Fargo maintains a high-caliber name.

UnitedHealth: It looks cheap at about 8.8 times the current year estimate of $3.59 a share.

WellPoint: The health benefits company trades at just over nine times the current year estimate of $5.48 per share. That's pretty cheap given that the company also trades at just over one times book value. It seems like a bargain.

Ingersoll-Rand: The maker of industrial products trades about right in the middle of its 52-week trading range, but over the long haul it seems like a great bet on this country and its future development. After all, its wares (power units, freezers and other similar gadgets) are seemingly everywhere

Iron Mountain: Although shares of the information storage provider are off their 52-week highs, they've had a nice multi-year run. Buffett has reportedly been trimming this position for some time.

Ameriprise Financial: Berkshire Hathaway has been reducing its holdings for a while. No big surprise here.

US Bancorp: Another great name with a long operating history (its been around since 1929) that at the end of last year sported more than 2,500 branches. Wall Street analysts think the company will grow at a roughly 8.3% per annum clip over the next five years. That's not too shabby for a company its size. Again, it seems like classic Buffett trying to buy a big name on the cheap.

In sum, it's interesting to see what the Oracle of Omaha's picking up. After all, he has a reputation for being ahead of the curve. Stay tuned because we'll be following up again in June.

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No positions in stocks mentioned.

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