Buffett buys more J&J, Wells Fargo, US Bancorp; lightens up on UnitedHealth

The globe's greatest investment genius, Warren Buffett, has been reshuffling his portfolio. And the juicy details of his capital decisions are now available from the SEC. (Unfortunately, these results are as of the end of March and he moved his money sometime in the first three months of the year so the information is at best six weeks out of date).

But in the first quarter, Buffett added to his holdings of Johnson & Johnson (JNJ) -- up 13.6 percent to 32.5 million shares, Wells Fargo (WFC) -- a 4.3 percent rise to 302.6 million shares, and US Bancorp (USB). But he slashed his holdings in UnitedHealth (UNH) (down 28.6 percent to 4.5 million shares) and CarMax (KMX): down 28 percent to 12 million shares.

My conclusion is that Buffett is really nervous about the automobile and health care industries. This makes sense if you believe that the economy will remain gloomy. People won't be buying as many cars as they used to for quite a while -- even used ones that CarMax sells -- and if a few million more lose their jobs then they won't be getting corporate-sponsored healthcare which could harm UnitedHealth's financial well-being.

But his moves also suggest that in the first quarter Buffett concluded that bank stocks had become irresistibly cheap. And as I posted, their rally between early March and early May helped explain much of the rise in the stock market. The question is whether banks stocks are still cheap enough to back up the truck as Buffett did with Wells Fargo.

Of all these moves, the one that stands out to me is that Johnson & Johnson is about the best stock out there. It might be worth buying it -- even at current prices.

Peter Cohan is president ofPeter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He owns Wells Fargo shares and has no financial interest in the other securities mentioned.

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