The Motley Foolies are running an ad this week that teases us about a stock Warren Buffett has been buying — his “new toy” is something in the oil services business, and they’re calling it a “no brainer”.
Like many of their recent ads, this one’s signed by someone other than the Gardner brothers who run the Stock Advisor newsletter being pitched — it happens to be Bryan White this time around, he’s one of their analysts, and he’s saying that he expects this stock to skyrocket as soon as June 5 as a Congressional committee reviews the Safeguards Act of 2013.
So, naturally, a bit of urgency — after all, without urgency you could take a few minutes to check with your friendly neighborhood Stock Gumshoe and do your own research … but heck, if they’re saying it could skyrocket by tomorrow do you have time to wait?
Don’t worry, we’ll get you an answer before then. And I’ll throw in a little hint up front for you: it’s a $30 billion company, and usually with stocks that large you’ve got a bit of time to think things over before they “skyrocket” … depending, of course, on what your definition of “skyrocket” is.
So without further ado, here’s how the ad is introduced:
“Don’t Outsmart Yourself on This One…
“President Obama is powerless to stop it.
“Exxon, Shell, and BP are digging deep into their pockets for it. (In fact, they’re required by law to cough up $41,000 an hour.) And oil-drunk dictators from Russia, to Saudi Arabia, to Venezuela are hopping mad about it.
“It looks like an octopus wearing a Mardi Gras crown. It sounds like 1,000 Harley Davidsons revving up at a green light. And it feels like the no-brainer investing opportunity of the century.”
So that’s Warren Buffett’s “new toy” — how about some more details from the ad?
- “If a company rents out its high-tech tools for $41,000 an hour… and demand is so hot that the line to get them is three years long…
- If Warren Buffett’s investment company Berkshire Hathaway has already bought 2.19 million shares of its stock this spring… without breathing a word about it to anyone in public…
- If it’s positioned front and center at the intersection of the two biggest energy mega-trends to come along in a century… helping to make the United States a net exporter of oil by the end of 2013… and completely energy independent within a decade…
- If Obama is waving the white flag on trying to stop it… because he’s happy enough that it’s forcing Big Oil companies like Exxon, Shell, and BP to clean up their environmental act…
- If it’s making Venezuelan dictator Hugo Chavez spin in his grave… and hanging other anti-democratic dirtbags like Vladimir Putin & the Saudi Arabian royal family out to dry for good…
Then I’m investing!”
Well, if you’re at all savvy in the ways of the SEC and their filings and have a few minutes to kill, that’s enough to feed your own personal Thinkolator, should you have one lying around in the garage — you can just check Berkshire’s quarterly 13F filings to see what Warren Buffett’s company has been buying and selling over time and you’ll see which stock they added 2.19 million shares of in the last quarter (these are always dated reports — they come out 45 days after the quarter end, and unless the manager is a really major holder and therefore an “insider” they don’t have to report changes more frequently).
Should I let the cat out of the bag so early on here? OK, fine — this is National Oilwell Varco (NOV).
And yes, Berkshire Hathaway’s position in NOV increased by 2,189,500 shares in the first quarter of this year — that’s not one of Berkshire’s larger stock positions, so the likelihood is that the decisions on this are probably being initiated by one of the other investment managers that Berkshire brought on in recent years and not by Mr. Buffett himself (he tends to focus on the large multi-billion-dollar deals and investments and on the massive foundational holdings of the company) … though since the two managers, Todd Coombs and Ted Weschler, have recently been generating better returns than Warren’s stock picks perhaps that’s not a bad thing (that underperformance of Buffett is not surprising, of course, particularly in the short term — the new guys are managing far less money and don’t have old legacy positions with embedded gains).
Berkshire’s position in NOV was apparently initiated back in the second quarter last year, at prices averaging ab