In every sport in the world there is always a great exemplary sportsman, someone that everyone admires and wants to follow in his footsteps, in our world of financial markets, that great exemplar and teacher for everyone is the great Warren Buffett, better known as the Oracle of Omaha. Following in his footsteps, studying his investment portfolio and continuously analyzing his movements, can help us make good investment choices, but it can also help us prevent substantial losses. Here are three Warren Buffett Stocks that he has slowly sold, let’s take a look.
General Motors (GM)
General Motors (NYSE:GM) is a well-known automaker that manufactures vehicles with popular brands such as Chevrolet and Cadillac. It designs, builds and sells automobiles and automotive components and used to be a great option in Warren Buffett stocks. However, General Motors has been facing some financial challenges lately that could give investors pause.
In the second quarter of 2023, GM Financial, the GM subsidiary, posted net income of $571 million. While this is good news, it is less than what the company earned in the same period last year, and down from Q1 2023. This financial decline raises questions for investors.
GM Financial has been actively financing vehicle purchases, with $13.7 billion in retail loans and leases. Its significant liquidity of $33 billion seems reassuring, but investors should examine whether these assets are actually contributing to earnings.
There are further worrying signs. The outstanding balance of retail finance loans increased, and some of them are not performing. About 1.8% are between 31 and 60 days past due, and 0.6% are more than 60 days past due. In addition, the annualized net annualized default rate, an indicator of loan defaults, has increased to 0.8%.
Warren Buffett has recently sold approximately 18,000,000 shares of GM stock, which equates to approximately 45% of his portfolio.
Chevron (CVX)
Chevron (NYSE:CVX) is a world-renowned oil and energy company. Its primary focus is the exploration, production and distribution of crude oil and natural gas, as well as the manufacture and sale of energy-related chemicals.
In the second quarter of 2023, Chevron reported earnings of $6.0 billion, or $3.20 per diluted share. However, these figures mark a significant decrease compared to the same period last year, when it earned earnings of $11.6 billion or $5.95 per diluted share in the second quarter of 2022. This decrease is due in part to a one-time tax benefit of $225 million related to asset write-downs recognized in prior periods.
In addition, foreign exchange effects increased earnings by $10 million. Adjusting for these figures, adjusted earnings were $5.8 billion, or $3.08 per diluted share, in the second quarter of 2023, compared with $11.4 billion, or $5.82 per diluted share, in the same period last year.
Chevron’s financial position appears to have weakened over the past year, with a notable decline in earnings. In addition, the acquisition of PDC Energy may be creating uncertainty in the market. Mergers and acquisitions can be risky and costly as their success often depends on proper execution. Investors may be concerned about how this acquisition will affect Chevron in the long term.
Buffett has also sold approximately 9,287,475 shares, indicating that he has sold 7% of the Chevron shares he owned.
Activision Blizzard (ATVI)
Activision Blizzard (NASDAQ:ATVI) is a video game and entertainment company headquartered in Santa Monica, California. Its core business is the development and publishing of popular video games, including franchises such as Call of Duty, World of Warcraft, Overwatch and Diablo. The company has been a major player in the video game industry for decades, making it an obvious choice in Warren Buffett stocks.
As for the company’s financial situation and recent news, Activision recorded significant revenue growth in the second quarter of 2023. Net bookings were up 50% year-over-year, and GAAP operating income and segment operating income were up more than 70% year-over-year. Blizzard, one of the company’s divisions, reached an important milestone by achieving a first-ever quarter with more than $1 billion in net bookings, driven by the successful launch of Diablo IV.
In addition, Activision Blizzard extended its merger agreement with Microsoft (NASDAQ:MSFT) until October 18, 2023, in exchange for a higher termination rate and new commercial agreements. It also announced a dividend of $0.99 per share.
However, despite these positive financial results, there are concerns surrounding the company. Activision has been at the center of controversies related to allegations of sexual harassment and discrimination in the workplace. This has led to lawsuits and a public relations crisis. In addition, the video game industry is highly competitive and constantly evolving, which could pose future challenges for the company.
The Oracle of Omaha has sold 70% of its position in ATVI, selling approximately 34,781,660 shares.
As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
