Buffett’s firm buys 10 mil.-share stake in General Motors

By Josh Funk, AP

OMAHA, Nebraska — Warren Buffett’s company is apparently bullish on the U.S. auto industry.

His company, Berkshire Hathaway Inc. took a new stake of 10 million in shares in General Motors Co. in the first quarter. The investment comes as the Detroit automaker continues to rebound from bankruptcy three years ago. It posted a first-quarter net income of US$1 billion, fueled by U.S. vehicle sales.

Buffett drives a GM-made Cadillac DTS sedan, so the investment could a further sign of his preference among U.S. automakers. Berkshire is not invested in Ford Motor Co. or Chrysler, which is majority owned by Fiat SpA. But the purchase of the GM stake, worth about US$214 million as of Tuesday, could also have been made by one of Berkshire’s other investment managers.

Omaha-based Berkshire also revealed in a regulatory filing Tuesday that it boosted its stake in Wal-Mart by almost 8 million shares to 46.7 million shares.

The first-quarter move to expand Berkshire’s stake in Wal-Mart came before The New York Times published a report detailing allegations that Wal-Mart executives used bribes to speed the retailer’s expansion in Mexico.

Buffett told Berkshire shareholders earlier this month, however, that the scandal didn’t change his view on Wal-Mart’s value or its earning power.

Berkshire officials don’t typically comment on the quarterly investment reports, and they did not respond to a message on Tuesday about the latest update.

The documents Berkshire filed with the Securities and Exchange Commission (SEC) also don’t reveal everything Buffett and the company’s two new investment managers were buying and selling in the first quarter. That’s because regulators allow them to omit some of the company’s holdings from the report.

Berkshire tweaked a number of positions in its US$75.3 billion portfolio during the first three months of 2012. It also added a stake of 1.6 million Viacom shares, which was the only new holding reported besides GM.

It also boosted its investments in DirecTV, Liberty Media, DaVita Inc. and the Bank of New York Mellon.

Berkshire reduced its holdings in Intel Corp., Kraft Foods, Dollar General, Procter & Gamble and Verisk Analytics.

The IBM stake that Berkshire first reported last fall grew to 64.4 million shares by the end of March from 63.9 million in December.