Yahoo Finance 13F Season: Buffett, Burry, & Druckenmiller
A Glimpse into Where the “Whales” Are Investing
Investment managers with more than $100 million in assets under management (AUM) must file a 13F disclosure with the U.S. Securities and Exchange Commission (SEC) each quarter. This report includes an overview of the manager’s holdings, including stocks, options, and more.
What you need to Know
A 13F report can be helpful in providing a glimpse into the thinking behind institutional investment managers. Often, institutional investors have sophisticated research teams and the resources to move the stocks they are in and the market.
However, it is essential also to remember the limitations of a 13F. The data may be delayed or stale because 13Fs only need to be filed once a quarter. Second, the 13F provides information about the positions and nothing more. In other words, the 13F does not provide the rationale behind a trade. As such, investors should do their due diligence and not blindly follow institutional investors into positions.
With that in mind, let’s take a look at some of the biggest moves by household names:
Warren Buffett:
The biggest news to come out of the “Oracle of Omaha’s” 13F disclosure was the addition of Capital One Financial (COF). Buffett’s Berkshire Hathaway purchased nearly 10 million shares of the stock for roughly a $1 billion position. Being that one of Buffett’s most famous quotes is, “Be fearful when others are greedy and be greedy when others are fearful”, it is not a big surprise that Buffett is making a foray into the struggling banking sector.
Capital One has all the attributes of a typical Buffett holding. The company has a robust balance sheet with over $30 billion in cash, a strong dividend, and an aggressive share repurchase program. From a valuation perspective, shares of COF are cheap. COF’s P/E of 6.24x compares favorably to the S&P 500’s P/E of 19.36x.
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You can’t mention Buffett without mentioning Apple (AAPL). AAPL now comprises Berkshire’s largest position, worth roughly $150 billion. Despite falling oil prices, Buffett continued to double down on shares of Occidental Petroleum (OXY).
Michael Burry:
If you have seen the movie “The Big Short” you are familiar with Michael Burry. Burry was portrayed by actor Christian Bale and is known for his high conviction short bets during the 2008 Global Financial Crisis. However, currently, it is Burry’s long positions that are making news. Like Buffett, Burry is betting that the banking crisis will blow over. In Q1, Burry bought a plethora of financials, including Wells Fargo (WFC), Western Alliance Bank (WAB), Capital One, and more. Burry is also making big bets on Chinese e-commerce names Alibaba (BABA) and JD.com (JD). JD is currently retesting its spike lows from last October.
Image Source: Zacks Investment Research
Stanley Druckenmiller:
In a recent interview, Stanley Druckenmiller made headlines by saying, “I’m in the hard-landing camp later this year.” Despite his bearish rhetoric, investors must understand how Druckenmiller operates. While he pays close attention to the macro environment, ultimately, price and volume sway his actions. Druckenmiller’s Duquesne Family Office 13F shows he is making bold bets on AI innovation through Microsoft (MSFT) and Nvidia (NVDA). Year-to-date, these stocks are two of the strongest – gaining 29% and 98%, respectively.
Image Source: Zacks Investment Research
Takeaway
This quarter’s 13F disclosures are an excellent example of why investors should not listen to what institutional investors say but rather what they do. For now, savvy investors are betting on stabilization in the banking sector and innovative technology companies with strong balance sheets.
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Wells Fargo & Company (WFC) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
JD.com, Inc. (JD) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
