Berkshire Hathaway - Making Money on Moody's

Warren Buffett told CNBC, "We're selling Moody's at six times what we paid."

According to the GuruFocus Real Time Picks , Warren Buffett 's Berkshire Hathaway Inc. ( BRK.A )( BRK.B ) reduced its position with Moody's Corporation ( MCO ) again by 1.47% as of May 9, 2013. Trading at the average price of $64.06, Berkshire unloaded 371,361 shares. The current share price is $64.17 with a change from average up 1%. Berkshire holds 24,922,178 shares after the trade.

This trade follows Berkshire's previous reductions of MCO in the last 10 days, on May 1, for 6.15%, and again on May 6 for 5.16%. Longtime shareholder of Moody's, Berkshire Hathaway remains the largest shareholder of MCO, with a stake of about 24.9 million shares, around 11.15% of the company. Berkshire has consistently made money selling off MCO shares since third quarter of 2009; its highest gain was 184.3% in the third quarter of 2013, and the trading history shows five quarters of triple-digit gains.

Trading history:

Read the first MCO story here.

Up 5% since Berkshire's last reduction and up 70% for 12 months, Moody's Corporation has a market cap of $14.46 billion, and a P/E of 21.10 and a P/S of 5.16. Moody's Corporation is the parent company of Moody's Investors Service, a research and credit rating agency, and Moody's Analytics, a credit, economic analysis and financial risk management firm. The corporation reported revenue of $2.7 billion in 2012, employs approximately 6,800 people worldwide and maintains a presence in 28 countries.

Last week Moody's Corporation reported revenue of $731.8 million for the first quarter of 2013, up 13% from $646.8 million for the first quarter of 2012. Operating expenses for the first quarter of 2013, which include a litigation settlement charge, totaled $451.4 million, 19% higher than in the prior-year period. The company's operating income for the quarter was $280.4 million, a 4% increase from $269 million for the same period last year. Moody's diluted earnings per share of $0.83, which includes a litigation settlement charge of $0.14, increased 9% from $0.76 in the first quarter of 2012

Moody's President and CEO Raymond McDaniel commented: "Moody's results in the first quarter of 2013 reflected strong operating performance for both Moody's Investors Service and Moody's Analytics... Earnings per share growth of 9% for the quarter reflects higher than anticipated expenses associated with our resolution of two protracted litigation matters. Our full-year 2013 non-GAAP EPS guidance range, which excludes the impact of those litigation settlements, is now $3.49 to $3.59."

Moody's full-year 2013 non-GAAP EPS guidance range, which excludes the impact of the first quarter litigation settlement charge, is now $3.49 to $3.59. For Moody's overall, the company still expects full-year 2013 revenue to grow in the high single-digit percent range, according to a company press release.

Moody's Corporation share price over 10 years:

MCO data by

Warren Buffett is arguably the most respected investor in history with a $53.5 billion net worth as of March 2013. Buffett has been called "The Oracle of Omaha" for his investing prescience. In a recent update from GuruFocus, the Berkshire Hathaway portfolio lists 41 stocks, three of them new, and a total value of $75.3 billion with a quarter-over-quarter turnover of 4%.

Here is the complete portfolio of Warren Buffett.

More valuable information on Warren Buffett:

1. Warren Buffett's Undervalued Stocks

2. Warren Buffett's Top Growth Companies

3. Warren Buffett's High Yield stocks

4. Stocks that Warren Buffett keeps buying

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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