Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) increased its stake in Exxon Mobil Corporation (NYSE:XOM) by 8, 845, 261 shares based on its latest 13F filing with the Securities and Exchange Commission (SEC) for the third quarter the ended September 30, 2013.
Buffett’s conglomerate now owns 40, 089, 371 shares worth approximately $3.449 billion. Exxon Mobil emerged as the top gainer among the energy equities listed in the S&P 500 Index today, driven by reports that Buffett bought a huge number of shares in the company. Exxon Mobil’s stock price rose 2.2% to $95.27 per share after hours on Friday at the New York Stock Exchange.
Reasons why Buffett is bullish on Exxon Mobile
The Motley Fool’s Alex Dumortier explained that the stock of Exxon Mobile is “cheap” given the fact that it is trading at 11.8x estimated EPS over the next 12 months. The stock is trading at 23% discount to the forward earnings multiple of the S&P 500 Index.
In addition, Exxon Mobil’s dividend yield of 2.7% compared with the 2% dividend yield of the index. Dumortier noted that at the time when Buffett was building its position in the stock, its valuation was lower.
Exxon Mobil is the world’s largest company in terms of market value. The company has a capitalization of $416.23 billion. As a long-term investor, Buffett invests in equities that have strong staying power. In other words, Exxon Mobil has a genuine longevity. In his letter to shareholders in 2011, Buffett described Exxon Mobil as the “most profitable company” citing that its earnings more than $40 billion annually.
Other equities added
Berkshire Hathaway also increased its stake in DaVita HealthCare Partners, Inc (NYSE:DVA) by 1, 0499, 018 shares to 31, 446, 830 shares. Its equity investment in the company is worth more than $1.789 billion. DaVita offers kidney dialysis for patients suffering from chronic kidney failure.
DaVita recently partnered with Shanghai Yangpu Antu Hospital to improve the quality of life of patients undergoing kidney dialysis while reducing medical costs. DaVita agreed to provide consultation services to the public hospital on advances management procedures for renal outpatient visits and dialysis treatments. According to Atul Mathur, president of Asia-Pacific operations of DaVita said the company’s aims to pilot a sustainable, cost-effective, and high quality renal care and dialysis network with Antu Hospital and within the Yangpu District of Shanghai.
The conglomerate also boosted its position in U.S. Bancorp (NYSE:USB) by 840, 200 shares, Suncor Energy Inc (NYSE:SU) to 79, 117, 501 shares. Its total investment in the bank is worth more than $2.894 billion.
Berkshire Hathaway also purchased additional 240,000 shares of Suncor Energy Inc (NYSE:SU), 64,100 shares of VeriSign Inc (NASDAQ:VRSN), and 8,807 shares of The Bank of New York Mellon Corporation (NYSE:BK).
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