Buffett's Berkshire Hathaway released their 2012 Annual Report (AR) last Friday March 1, 2013. A vital piece of information that Buffett chooses to discloses in the AR is the cost-basis of his major (over $1B market value) common stock holdings. Below is a comparative spreadsheet of such positions from last year's and this year's ARs:
The spreadsheet indicates that Buffett's cost-basis on ConocoPhiliips (COP), DIRECTV (DTV), and Tesco plc (TSCDY) are very close to or below the market values as of EOY2012. DTV share price has since come down by another 3% while the other two stocks have remained steady since the beginning of the year. Currently, TSCDY is still trading below his cost basis while DTV and COP are trading marginally above. These are potentially good opportunities for further research with an eye toward establishing long positions. TSCDY is a medium sized 2.7% of the total common stock portfolio position while the other two positions are somewhat smaller. His top-four holdings are trading well above his cost-basis with IBM the only one trading anywhere near his price-range. AXP and WFC traded near his cost-basis during the financial crisis and in hindsight they were good opportunities.
Clarification on Buffett's cost-basis on Tesco plc: Buffett's owns the London listed shares as opposed to the ADRs (TSCDY). TSCDY trades at around $17 per share and Buffett's cost-basis on the London listed shares is $5.66. As one Tesco ADR is equivalent to 3 ordinary shares, Buffett's cost-basis in terms of the ADR shares is right at around $17 ($5.66*3).
Note that owning Tesco also acts as a slight hedge against the US dollar. This can be easily visualized by considering the following scenario: The London listed shares currently trade at around 370p and pays a yearly dividend of 14.76p (x-dividend for the final dividend of 10.13p for 2012-13 was 04/24/2013 and the preliminary dividend for 2013-14 fiscal year should be in October 2013). That translates to $5.62 (370*1.52/100) for the share price and 22.37c for the dividend, based on the current conversion of $1.52 to a pound. Say the dollar crashes and trades at $2 to a pound at a future point. When denominated in dollars, Tesco share price will then increase to $7.40 (370*2/100) and the dividend will be 29.52c. The ADR price will increase to around $22.20 (370*2*3/100) to reflect this, thus forming a natural hedge.
Last Updated: 06/2013.
The spreadsheet indicates that Buffett's cost-basis on ConocoPhiliips (COP), DIRECTV (DTV), and Tesco plc (TSCDY) are very close to or below the market values as of EOY2012. DTV share price has since come down by another 3% while the other two stocks have remained steady since the beginning of the year. Currently, TSCDY is still trading below his cost basis while DTV and COP are trading marginally above. These are potentially good opportunities for further research with an eye toward establishing long positions. TSCDY is a medium sized 2.7% of the total common stock portfolio position while the other two positions are somewhat smaller. His top-four holdings are trading well above his cost-basis with IBM the only one trading anywhere near his price-range. AXP and WFC traded near his cost-basis during the financial crisis and in hindsight they were good opportunities.
Clarification on Buffett's cost-basis on Tesco plc: Buffett's owns the London listed shares as opposed to the ADRs (TSCDY). TSCDY trades at around $17 per share and Buffett's cost-basis on the London listed shares is $5.66. As one Tesco ADR is equivalent to 3 ordinary shares, Buffett's cost-basis in terms of the ADR shares is right at around $17 ($5.66*3).
Note that owning Tesco also acts as a slight hedge against the US dollar. This can be easily visualized by considering the following scenario: The London listed shares currently trade at around 370p and pays a yearly dividend of 14.76p (x-dividend for the final dividend of 10.13p for 2012-13 was 04/24/2013 and the preliminary dividend for 2013-14 fiscal year should be in October 2013). That translates to $5.62 (370*1.52/100) for the share price and 22.37c for the dividend, based on the current conversion of $1.52 to a pound. Say the dollar crashes and trades at $2 to a pound at a future point. When denominated in dollars, Tesco share price will then increase to $7.40 (370*2/100) and the dividend will be 29.52c. The ADR price will increase to around $22.20 (370*2*3/100) to reflect this, thus forming a natural hedge.
Last Updated: 06/2013.
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