For decades, Berkshire Hathaway‘s (NYSE: BRKA)(NYSE: BRKB) annual shareholder meeting has been one of the most anticipated events on Wall Street. It provided an opportunity for longtime CEO Warren Buffett to talk about the U.S. economy, stock market, and Berkshire’s 48-stock investment portfolio.
But this year had a different tone. The Oracle of Omaha retired as CEO on Dec. 31, thereby handing the baton to his protégé, Greg Abel. While Buffett remains chair of the board, Berkshire’s day-to-day operations, its $327 billion investment portfolio, and its annual shareholder meeting are Abel’s responsibility.
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However, you won’t find all the juiciest details about Berkshire Hathaway from its annual meeting. The company’s first-quarter operating results, which were released on the day of its annual meeting (May 2), point to Abel making a big move in his company’s portfolio.
Bank of America shares likely got the heave-ho for a seventh straight quarter
When professional and everyday investors want to track what Wall Street’s smartest money managers are buying and selling, they typically turn to Form 13F filings. A 13F is a required filing no later than 45 calendar days following the end of a quarter that details an institutional investor’s buying and selling activity.
Although Berkshire Hathaway’s 13F detailing its first-quarter trades will be filed with regulators after the closing bell on May 15, investors may not have to wait till then to decipher what Greg Abel and his investment team have been up to.
In Berkshire’s notes to its consolidated financial statements, the company lays out its cost bases for all investment holdings in three categories:
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Banks, insurance, and finance
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Consumer products
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Commercial, industrial, and other
Between Dec. 31 and March 31, Berkshire’s cost basis in “Banks, insurance, and finance” declined from $15.454 billion to $14.685 billion, with a significant reduction in this category’s net unrealized gain. Though Abel’s company oversees several financial stocks in its $327 billion investment portfolio, few (if any) can have as large an impact on net unrealized gains as Bank of America (NYSE: BAC).
There are two notable clues beyond Berkshire’s first-quarter operating results to suggest that Abel has followed in the Oracle of Omaha’s footsteps and continued to pare down his former No. 2 holding. To begin with, Buffett was a persistent seller of Bank of America stock for six straight quarters leading up to his retirement:
