Berkshire Discloses Charter Communications Stake, Cuts DirecTV

Thursday, 14 Aug 2014 04:49 PM


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Berkshire Hathaway Inc. reported a stake in Charter Communications Inc. and cut its holding in DirecTV as Chairman Warren Buffett’s deputies reallocate their bets on pay-TV companies.

Berkshire held about 2.3 million shares of Charter on June 30, Buffett’s Omaha, Nebraska-based company said Thursday in a filing to the U.S. Securities and Exchange Commission. The holding is valued at about $361 million based on the closing price in New York. The stake in DirecTV was reduced by 11 million shares to 23.5 million shares.

While Buffett and his deputies continue to add new investments, their stock purchases have slowed this year amid surging equity values. They’ve also sold some holdings. That helped boost Berkshire’s cash hoard to a record $55.5 billion on June 30.

“For many years, Buffett has had this huge surplus of funds,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business who has taken students to meet the billionaire in Omaha. “He’d be happier if he could find his $20 billion investment.”

Buffett, 83, has long focused on acquiring companies and making concentrated stock bets as Berkshire’s chairman and chief executive officer. Almost 60 percent of Berkshire’s $119.2 billion equity portfolio as of June 30 was in Wells Fargo & Co., Coca-Cola Co., American Express Co. and International Business Machines Corp.

His deputies, Ted Weschler and Todd Combs, have followed a similar approach as they manage smaller pots of money. Each oversaw about $7 billion at the beginning of the year on behalf of Berkshire insurance units and pension funds for employees at the company’s subsidiaries.

Succession Plan

Hiring Weschler in 2011 and Combs in 2010 was a cornerstone of Buffett’s succession plan. The former hedge-fund managers will jointly oversee all investments once Buffett’s no longer leading the business he built from a failing textile maker into the fifth-most-valuable company in the world through takeovers and stock picks.

Class A shares climbed past $200,000 today for the first time. The billionaire has shunned share splits, making the stock price a constant reminder of how his long-term, patient approach to investing has built wealth.

Berkshire’s success has earned Buffett a following among investors who study the company’s portfolio for clues about his strategy. Major stock purchases can boost shares of target companies, as happened last year when Buffett disclosed a $3.7 billion stake in Exxon Mobil Corp.

Charter climbed 1.8 percent to $159.19 in extended trading at 4:09 p.m. in New York.

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