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3 Warren Buffett Stocks to Sell

Berkshire Hathaway has done well in 2013, but it doesn't mean a little second-guessing isn't in order

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Sell No. 1: GlaxoSmithKline

glaxosmithkline-stock-gsk-warren-buffettThe first and most obvious choice to go is GlaxoSmithKline (GSK), which represents just 0.02% of Berkshire Hathaway’s equity holdings, and whose position was reduced by 77% in the third quarter.

Berkshire’s top 10 holdings account for 83% of its $92 billion in equities. They’re what money managers commonly refer to as their “best ideas.” GSK is nowhere near the top 10 and represents one-seventh the weighting of French drug maker Sanofi (SNY), which Warren Buffett reduced in the third quarter.

After GSK hit an 11-year-plus high in late May, its stock has retreated after news that the company was involved in a bribery trial in China, not to mention it is facing significant competitive pressures regarding its respiratory drug Advair.

Bottom line: European drug stocks have gotten expensive, and GSK doesn’t warrant paying any sort of premium.

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