Markets finish week down after bouncing on Bannon's exit >>> READ MORE

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

    View All  

Wildcard Sell: McLane Company

McLane185I’ll probably catch heck from Warren Buffett worshipers for this final pick, which isn’t a public company, but I believe McLane Company remains a weight around Berkshire Hathaway’s neck.

For the first nine months of 2013, the food and beverage wholesale distributor generated 26% of BRK.B’s overall revenue, but just 2.1% of the company’s earnings before taxes. While I understand the wholesale distribution business is high-volume, low-margin, it generates a worse yield (1.1% earnings before taxes margin) than Walmart’s (WMT) dividend yield of 2.4%.

Just because Walmart uses McLane (and once owned) for distribution doesn’t mean Berkshire Hathaway needs to own it. Let somebody else deal with the slim margins.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC