Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) liquidated positions in a number of high-profile companies during the fourth quarter, but the Oracle of Omaha's huge stake in Coca-Cola (KO) appears to have caused his portfolio to lose its fizz so far in 2011.
Berkshire Hathaway is up just 2.58% through Feb. 15, according to an analysis by Bespoke Investment Group, lagging the broader S&P 500 ($INX) by fully 3 percentage points. Berkshire dumped its stakes in Bank of America (BAC), Comcast (CMCSA), Nike (NKE) and Lowe's (LOW), according to a regulatory filing made Monday, but held firm in some of its biggest plays -- which helped cause the portfolio's underperformance so far this year, according to Bespoke.
Based on data filed by Berkshire Hathaway, Coca-Cola "has no doubt hurt Buffett's returns this year," Bespoke reports. Coke, a component of the Dow Jones Industrial Average ($INDU), is not only Berkshire Hathaway's biggest holding, accounting for 23.4% of the portfolio, but has been the firm's worst-performing investment, declining nearly 4% year-to-date, according to Bespoke (see table).
Interestingly, Coke's fellow Dow component General Electric (GE) has been Buffett's best investment in 2011, adding more than 17%. Buffett's commitment to financial stocks has also paid off, Bespoke notes. Wells Fargo (WFC), Berkshire's second-biggest position, is up nearly 9% through Feb. 15, while Dow component American Express (AXP) gained 7.6%.
Buffett's biggest winners after GE were continuing bets on credit-rating firm Moody's (MCO), newspaper publisher Gannet (GCI) and Exxon Mobil (XOM) (yet another Dow stock), all of which rose more than 10%.
Bespoke Investment Group also put together a sector breakdown of Berkshire Hathaway's portfolio based on the most recent data and, lo and behold, financial stocks account for more than 45% of all holdings. Consumer staples come in second, making up more than 43% of the total pie. Note the large positions in consumer stocks (and Dow components) Procter & Gamble (PG), Kraft Foods (KFT) and Wal-Mart (WMT) in the table above.
Lastly, Berkshire Hathaway is most underweight in technology stocks. Bespoke notes that it has no exposure to the sector even though it's the biggest part of the S&P 500. "Buffett has said numerous times in the past that he doesn't invest in what he doesn't understand, and that is one reason he gives for not investing in the technology sector," says Bespoke. "In this case, he's putting his money where his mouth is."
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