3 Key Takeaways From Q1 13F Season

May 15 was the last day for institutional money managers with at least $100 million in assets under management (AUM) to submit the 13F form for the quarter that ended on March 31. The form is used to disclose end-of-quarter equity holdings and is filled by hedge funds the latest 45 days after the last day of the calendar quarter.

Investors tend to scrutinize 13Fs and look for clues about what the smart money is doing in the market. It also allows smaller money managers and retail traders to see the holdings of Wall Street's top stock pickers, like Warren Buffett.

Here we look at the 3 biggest stories from this week’s 13F deadline.

What Is Warren Buffett Trading?

The legendary investor engineered several changes to Berkshire Hathaway’s massive portfolio. Buffett and his lieutenants bought shares of Capital One Financial (NYSE: NYSE:COF) for the first time.

Berkshire owned 9.92 million COF shares at the end of Q1, which values the stake at nearly $1 billion based on today’s prices. Capital One stock trades around 3% higher today on the news.

Elsewhere in the banking sector, Berkshire increased its positions in Bank of America (NYSE: NYSE:BAC) and Citigroup (NYSE: NYSE:C) as investors rushed to large banks amid a regional banking turmoil that took place in March.

While adding Capital One to his portfolio and increasing exposure to large U.S. banks, Buffett completely exited the Bank of New York (NYSE:BK) position, sending shares lower. Similarly, the legendary investor also liquidated his position in U.S. Bancorp (NYSE:USB).

“In terms of owning banks, events will determine their future and you’ve got politicians involved, you’ve got a whole lot of people who don’t really understand how the system works,” Buffett said at the recent annual shareholder meeting.

Elsewhere, Buffett added to his position in Apple (NASDAQ: NASDAQ:AAPL), which remains by far the biggest public holding. Based on Monday’s closing price, Berkshire’s stake in Apple was valued at around $157 billion.

Buffett also raised the stakes in HP (NYSE: NYSE:HPQ), Occidental Petroleum (NYSE: NYSE:OXY), and Paramount Global (NASDAQ:PARA). On the other hand, the investment titan cut its stake in Chevron (NYSE: NYSE:CVX), Amazon (NASDAQ: NASDAQ:AMZN), and General Motors (NYSE: NYSE:GM), while completely exiting the Taiwan Semiconductor Manufacturing (NYSE:TSM) position.

Bill Ackman’s Massive Google Position

Billionaire investor Bill Ackman and his hedge fund Pershing Square (NYSE:SQ) Capital acquired more than 10 million shares of Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) in the first quarter, according to the 13F filing with the U.S. Securities and Exchange Commission (SEC).

Accordingly, Pershing Square now owns 8,069,770 C shares (GOOG) and 2,185,000 (GOOGL) A shares. The position is worth around $1.2 billion through Monday’s close while Pershing’s total AUM was $15.5 billion.

Elsewhere, the hedge fund cut its stakes in Chipotle Mexican Grill (NYSE:CMG), Hilton Worldwide Holdings Inc (NYSE:HLT), and Lowe’s Companies Inc (NYSE:LOW). On the other hand, the investor raised its stakes in Howard Hughes (NYSE:HHC) and Chipotle's rival Restaurant Brands International Inc (NYSE:QSR). These four companies also represent Ackman's largest holdings.

The hedge fund’s portfolio was up 3.6% from the start of the year to May 09. Bearing in mind the latest disclosure, the portfolio has been boosted by the new Alphabet position given that shares are up 32.2% year-to-date.

Ackman’s Q1 trades come after he warned that the U.S. economy may be headed for a "train wreck" given the aggressive pace of rate hikes by the Federal Reserve.

"When combined with the higher cost of debt and deposits due to rising rates, consider what the impact will be on lending rates and our economy," he said. "The longer this banking crisis is allowed to continue, the greater the damage to smaller banks and their ability to access low-cost capital."

Nelson Peltz Buys More Disney Shares

While activist investor Nelson Peltz, who runs the hedge fund Trian Fund Management, disclosed that he cut his stake in the Walt Disney (NYSE:DIS) company, Bloomberg News reports that Peltz bought more shares since the end of Q1.

According to yesterday’s 13F filing, Peltz cut his stake in Disney to just over 5.9 million shares, a 34% decrease relative to the end of 2022 when Trian owned about 9.4 million shares. However, Bloomberg News reported that Peltz acquired about 500,000 more shares in April and/or May to now own about 6.4 million shares.

Disney shares gained 15% in the quarter but fell after the Q1 earnings report which showed a decrease in the number of paid Disney+ members. The activist investor was pushing for a board set in February.

“Disney committed to strategic and operating improvements that generally aligned with the initiatives we had previously discussed with the company,” Trian said in a statement Monday.

“We believe these initiatives can create value and are monitoring management’s execution closely.”

Elsewhere, Trian Fund cut its stake in Ferguson Plc (NYSE:FERG) by almost 50%, while also lowering positions in Invesco Plc (NYSE:IVZ) and The Wendy’s Co (NASDAQ:WEN). The fund completely exited its small position in Sysco (NYSE:SYY) while opening a new position in GE HealthCare Technologies Inc (NASDAQ:GEHC), which recently made its public debut after it was spun off from General Electric (NYSE:GE).

Summary

As expected given the still-high market volatility, the most closely-watched money manager had a busy first quarter. Warren Buffett made several changes to his portfolio, including in the embattled banking sector, and whale Bill Ackman’s Pershing accumulated a large position in Google, whose stock benefited from the recent AI frenzy.

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Shane Neagle is the EIC of The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.