Warren Buffett hasn’t shown a lot of love for health-care companies (or ampersands) lately. He slashed his stakes in Johnson & Johnson by 54% and Procter & Gamble by 9% in the fourth quarter.
Buffett’s Berkshire Hathaway disclosed yesterday that it sold 33 million J&J shares in the quarter. Berkshire’s J&J stake was worth $1.71 billion as of Dec. 31, about 1% of J&J’s $167 billion market capitalization then. Back in mid-2007, we had taken note when Berkshire bought four million J&J shares.
Berkshire sold 9.5 million Procter & Gamble shares in the quarter, with its stake as of Dec. 31 at $5.95 billion. That’s about 3% of the company’s $183 billion market cap then. P&G is eying an exit from the prescription-drug business, we noted earlier this month.
J&J’s share price fell 14% and P&G’s dropped 11% in the quarter. Bloomberg notes that they held up much better than those of financial firms like Bank of America and American Express, companies in which Buffett held his stakes steady.
Michael Yoshikami, president of YCMNet Advisors in Walnut Creek, Calif., told Bloomberg that Buffett may have cut his holdings of J&J and P&G because “their stock prices are closer to what he thinks they’re actually worth.”
Another health-care nugget in the Berkshire filing: The company sold nearly 80,000 shares of UnitedHealth Group, reducing its stake to 6.3 million shares, or $168 million. It held steady with insurer WellPoint and drugmakers Sanofi-Aventis and GlaxoSmithKline.
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