Berkshire Hathaway Inc.
) most recent 13F filing, Warren Buffett's company has made a
$3.7 billion investment in the world's largest publicly traded
Exxon Mobil Corporation
Buffett is well known for cherry picking investments and
considers Exxon Mobil as a phenomenal investment opportunity. It
is one of the most efficient integrated oil explorers, given its
track record of superior return on invested capital. It has also
maintained the trend of continual dividend increase for the past
Exxon Mobil's third quarter performance reflects continued
progress across a diverse set of profitable growth opportunities,
positioning it well to deliver shareholder value. The company
expects production to grow 2-3% per year during the 2013-17
period. Planned capex of around $185 billion over the next five
years, excellent financial health with an AAA credit profile and
diversified operations across the globe with several new projects
expected to come online through 2013 posit Exxon Mobil as a value
This wager by Buffett also comes across as a vote of confidence
for the oil and gas sector. Demand for energy is expected to
grow. Macro trends such as a better-than-anticipated October jobs
report, positive data about China's trade, better- than-expected
third quarter GDP growth rate, sector all pointed towards higher
The Energy Information Administration (EIA) in its most recent
Short-Term Energy Outlook stated that it expects global oil
demand to increase 1.1 million barrels per day in 2013 and a
further 1.2 million barrels per day in 2014.
Buffett, however, reduced his holding in another oil major,
) to 13.5 million shares at the end of September from 24.2
million shares in June. This investment came at a time when oil
and gas prices were nearly peaking and thus the move failed to
produce adequate returns.
Other portfolio changes include the addition of 0.2 million
Suncor Energy Inc.
) and 0.8 million shares of
). Buffett shed 1.15 million shares of
) which has been accused of bribery in China and is also facing
patent expiration of its niche drug Advair. The portfolio also
cut bets on Sanofi by 0.2 million shares.
Berkshire Hathaway and Exxon Mobil both currently retain a Zacks
Rank #3 (Hold).
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