Buffett drops Honeywell, Office Depot
marketwatch.com
By Justin Wiser, CBS.MarketWatch.com
Last Update: 12:43 PM ET Nov. 14, 2001
OMAHA, Neb. (CBS.MW) -- Honeywell and Office Depot didn't last long in billionaire investor Warren Buffett's Berkshire Hathaway portfolio.
After initiating positions in the companies earlier this year, Berkshire Hathaway already has liquidated its stakes in both, according to documents filed with the SEC Wednesday.
The move marks a rare departure for the legendary Buffett, who often describes the perfect holding period for a stock as forever.
His Berkshire Hathaway investment vehicle sold 5 million shares of Office Depot (ODP: news, chart, profile) amassed earlier this year, and 2.25 million shares of Honeywell (HON: news, chart, profile) purchased in the second quarter.
The goings-on at Berkshire Hathaway's large insurance business have likewise been unusual this year given the severe impact of the September terrorist attacks.
"Results of the third quarter ... are anything but normal," Buffett said in a note to shareholders last week. Berkshire reported a net loss of $679 million for the period, compared with net earnings of $797 million in the year-earlier quarter.
Overvalued?
Although Office Depot's earnings met analyst estimates for the third quarter, many see the stock as very expensive given its hefty rise this year. Shares are up almost 100 percent since January and now trade around 20 times this year's earnings.
The company is the nation's largest office supply chain, with $11.4 billion in annual sales.
Honeywell's stock has not fared as well this year. Shares fell from a peak of $53.50 in May to $31.70 at Tuesday's close. A planned merger of Honeywell and General Electric (GE: news, chart, profile) was nixed by the European Commission in early July.
Berkshire Hathaway closed its position in Minneapolis-based US Bancorp (USB: news, chart, profile) during the third quarter, according to the SEC filing. Berkshire sold 6 million shares, after selling 12 million shares of the company in the second quarter.
Buffett also liquidated Dun & Bradstreet Corp. (DNB: news, chart, profile), an information services provider, by selling about 7 million shares. He eliminated his stake in auto parts maker Superior Industries International (SUP: news, chart, profile), selling 105,000 shares.
In the only significant purchase disclosed in the filing, Berkshire added about 600,000 shares of Jones Apparel Group (JNY: news, chart, profile), bringing its stake in the fashion retailer to 8.6 million shares. Berkshire had reduced this position earlier in the year.
Class A shares of Berkshire Hathaway (BRKA: news, chart, profile) were unchanged at $68,000 as of Wednesday's close. Class B shares (BRKB: news, chart, profile) closed up $8 at $2270.
Justin Wiser is a reporter for CBS.MarketWatch.com in Washington. |
