Buffett’s Berkshire Bets on GM, Ups Wal-Mart Stake

by Christopher Freeburn | May 16, 2012 9:46 am

Warren Buffett is betting[1] that more people will be shopping at Wal-Mart (NYSE:WMT[2]) and buying General Motors (NYSE:GM[3]) cars.

The iconic billionaire’s Berkshire Hathaway (NYSE:BRK.A[4], BRK.B[5]) investment company took its first stake in GM and increased its existing stake in Wal-Mart, during the first quarter, according to SEC filings.

With U.S. car sales risings, Berkshire purchased 10 million GM shares for about $214 million. Buffet is known to drive a Cadillac DTS, though the investment could have been directed by any of Berkshire’s investment managers, the Associated Press notes.

Berkshire also increased its stake in Wal-Mart with the purchase of 8 million shares. That brings Berkshire’s total stake in the world’s largest retail chain to 46.7 million shares.

The move is seen as a vote of confidence in the retailer, which is facing federal scrutiny after the New York Times revealed rampant bribery and corruption[6] in its Mexican subsidiary last month.

According to the AP, Buffett has said that the scandal won’t harm Wal-Mart’s profitability.

In addition to GM, Berkshire also acquired a 1.6 million-share, first-time stake in Viacom (NASDAQ:VIA[7]) during the first quarter, while increasing its holdings of IBM (NYSE:IBM[8]), Liberty Media (NASDAQ:LMCA[9]) and Direct TV (NASDAQ:DTV[10]).

Berkshire showed less confidence in Kraft (NYSE:KFT[11]), Procter & Gamble (NYSE:PG[12]) and Intel (NASDAQ:INTC[13]), lowering its stakes in those companies.

Endnotes:
  1. is betting: http://www.usatoday.com/money/companies/management/story/2012-05-15/berkshire-takes-stake-in-gm-boosts-wal-mart-investment/54982268/1
  2. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  3. GM: http://studio-5.financialcontent.com/investplace/quote?Symbol=GM
  4. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  5. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  6. rampant bribery and corruption: http://investorplace.com/2012/04/wal-marts-mexican-bribery-scandal-5-facts/
  7. VIA: http://studio-5.financialcontent.com/investplace/quote?Symbol=VIA
  8. IBM: http://studio-5.financialcontent.com/investplace/quote?Symbol=IBM
  9. LMCA: http://studio-5.financialcontent.com/investplace/quote?Symbol=LMCA
  10. DTV: http://studio-5.financialcontent.com/investplace/quote?Symbol=DTV
  11. KFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=KFT
  12. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  13. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC

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