Warren Buffett's Berkshire Hathaway boosted its ownership interest in Wells Fargo in 2014, thanks to stock repurchases by the San Francisco-based lender, Berkshire disclosed Saturday in its annual letter to shareholders.
At the end of last year, Berkshire Hathaway owned 9.4 percent of Wells Fargo, up from 9.2 percent at the end of 2013. While the company holds the same number of Wells Fargo shares it did a year ago – 483.5 million – Wells Fargo buybacks increased Berkshire Hathway’s ownership percentage.
Omaha, Neb.-based Berkshire Hathaway remains Wells Fargo's largest institutional shareholder. The company considers Wells Fargo to be one of its "Big Four" investments. The others are American Express, IBM and Coca-Cola Co.
The four companies “possess excellent businesses and are run by managers who are both talented and shareholder-oriented,” the letter to shareholders says.
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The annual letter is widely read by investors seeking investing wisdom from Buffett. It’s the 50th annual letter from Buffett to shareholders since he took control of Berkshire Hathaway in 1965.
Wells Fargo will play a role in the theatrics of Berkshire Hathaway’s next annual meeting, to be held Saturday, May 2, in Nebraska. Here’s an excerpt from the letter on that:
“Get up early on Saturday morning. At 6:20 a.m., Norman and Jake, two Texas longhorns each weighing about a ton, will proceed down 10th Street to the CenturyLink. Aboard them will be a couple of our Justin Boot executives, who do double duty as cowboys. Following the steers will be four horses pulling a Wells Fargo stagecoach. Berkshire already markets planes, trains and automobiles. Adding steers and stagecoaches to our portfolio should seal our reputation as America’s all-purpose transportation company.”
Charlotte-based Bank of America is also mentioned in Berkshire Hathaway’s letter, as it was a year ago.
Berkshire Hathaway again said it is waiting to exercise its option to buy 700 million shares of the bank’s stock. Berkshire has the right to buy that amount for $5 billion at any time before September 2021. At the end of last year, those shares were worth $12.5 billion, the letter says.
Berkshire continues to say it is likely to buy the shares just before the option expires.
Buffett stepped in with the $5 billion investment in Bank of America after insurer American International Group filed a lawsuit in August 2011 seeking $10 billion in damages from the bank. That led to the bank’s shares plunging more than 20 percent to $6.51. Weeks later, Buffett swooped in with the investment, in a much-needed show of confidence in the bank.
Bank of America is Berkshire Hathaway’s fourth-largest stock investment, up from fifth-largest a year ago – “and one we value highly,” the letter says.