As previously described
on this page
, you don’t have to find new unique investments to generate a good return. On the contrary, there is a true goldmine of knowledge and investment ideas hidden in studying the best investors in the world. Below you will find a selection of the most interesting purchases and sales in Q1 2022, which were published between April 21 and May 16, 2022.
You can find all the updated portfolios
here
.
Warren Buffett's buying up like never before
After a long period of rather limited activity, Buffett is once again in a shopping mood. The market has taken a nice dive from the top, which has created opportunities. In Buffett’s case, this has resulted in a net purchase of $41.4 billion. USD when offsetting the sale of other shares during the period. It’s the largest single-quarter purchase ever.
And what did Buffet buy? Several different things actually. Firstly, there aren relatively large bet on oil and gas company Chevron Corp.which he has increased by over 300% and now represents 7% of the equity portfolio. Similarly, he has bought Occidental Petroleum, which now accounts for 2%. With an oil price above USD 100, it is lucrative to be an investor in energy companies and with such a large investment, Buffett believes that the price will remain relatively high. With Russia’s invasion of Ukraine and the EU’s need to free themselves from Russian oil and gas, it seems like a reasonable bet. At the same time, the investments can be seen as a potential future addition to Berkshire Energy in some constellation.
Another interesting investment is Buffett’s position in Activision Blizzard Inc. which in Q1 was increased to 1.4% of the portfolio (approx. USD 5 billion). What makes this transaction special is that Microsoft has made an offer to buy all of Activision for $95 per share. Buffett spoke openly about the transaction at Berkshire’s annual general meeting (can be streamed on CNBC here). In plain English, this is a classic arbitrage bet. In other words, Buffet is betting that the deal goes through (as he says, Microsoft is probably good for the money) and will yield a profit in the range of 20-25% within an expected timeframe of 6-12 months. With today’s price of ~78 USD here on 31/5-22, this would give a gain of 22% if the deal goes through. For an investor who sees Activision as a good investment (Berkshire had already bought into the company before the Microsoft deal was announced), there is still an opportunity to get in on Buffett’s bet.
Klarman continues acquisition of Dropbox and Alphabet
Back in November 2021, I wrote about Seth Klarman’s new and relatively large position at Dropbox. In Q4 2021, Klarman surprisingly sold almost 13% of this position, but has now in Q1 2022 chosen to increase its position significantly to 2.7% of the portfolio. Here it should be taken into account that Klarman in Q3 2021 bought at an average price around 31 USD/share. Looking at the stock today (May 30, 2022), it is now trading down around 21, or about 30% below the price Klarman was willing to pay.
Klarman has chosen to use the fall in Alphabet (Google) to increase its position by almost 7%, making it the fifth largest position in the portfolio. In addition, Klarman has increased its position in Qorvo Inc, which is now the second largest position in the portfolio and continued to reduce its position in Intel (by 8%),
Tweedy, Brown reduce in the portfolio
Looking at Tweedy, Brown’s portfolio for the quarter, there is a fairly clear trend: they are reducing a large number of their positions. These include AutoZone Inc, Roche, Johnson & Johnson, United Overseas Bank Ltd. and others.
The only – and quite significant – exception among their top 20 positions is an increased position in Intel. Here they increase by 71% in the quarter, so Intel now makes up 1.7% of the total portfolio. Tweedy also increased their position in Q4 2021 by 133%. Intel is a somewhat interesting case because we see Seth Klarman selling out of his position at the same time. Unfortunately, Klarman is not interested in the public eye, so we can only speculate on his rationale for the sale and conclude that two very experienced and respected investors have different views on Intel as an investment.
What we can note, however, is that Intel has continuously fallen in price over the past year and now trades at fundamentals that are definitely at the ‘cheap’ end of the scale with an EBIT/EV of 8.2 (price-to-earnings of 7.4), EV/S of 2.2 and P/B of 1.8.
Full transparency: At the time of writing, the author or their close associates have invested in Berkshire Hathaway, Alphabet and Intel. The author has no positions in the other companies mentioned in the article.
