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Buffett's Berkshire cuts Wells Fargo and Goldman stakes after Kroger and Biogen investment

[NEW YORK] Warren Buffett's Berkshire Hathaway Inc on Friday said it has taken a US$549.1 million stake in Kroger Co, investing in the largest US supermarket chain as smaller rivals struggle.

The conglomerate also disclosed a new 648,000 share stake in drugmaker Biogen Inc worth US$192.4 million as of Dec. 31, while significantly reducing its stakes in two major banks, Wells Fargo & Co and Goldman Sachs Group Inc.

Berkshire's disclosures came in a regulatory filing detailing its US-listed stocks as of the end of 2019.

Kroger shares rose 3.9 per cent and Biogen rose 1.5 per cent in after-hours trading, a sign of investors' regard for Mr Buffet and the Omaha, Nebraska-based conglomerate he has run since 1965. 

Investors monitor Berkshire's quarterly filings for signals about where Mr Buffet and his portfolio managers Todd Combs, who is now also chief executive of Berkshire's Geico car insurer, and Ted Weschler see value.

Friday's filing does not say who bought or sold particular investments. Mr Combs and Mr Weschler normally make smaller investments, while Mr Buffet directs big investments such as Wells Fargo and Apple Inc, Berkshire's largest.

Mr Buffet's assistant did not immediately respond to requests for comment.

Kroger, in which Berkshire disclosed an 18.94 million share stake, has invested heavily to modernise stores, improve deliveries and boost its online presence to compete with rivals such as Walmart Inc and Amazon.com Inc, the latter also a Berkshire holding.

Many smaller chains have fared worse, including Earth Fare, Fairway and Lucky's, which have all sought bankruptcy protection this year. Kroger had invested in Lucky's.

Berkshire's stake in Wells Fargo fell 15 per cent in the quarter to 323.2 million shares worth about US$17.4 billion, while its stake in Goldman shrank 35 per cent to 12 million shares worth about US$2.8 billion.

Mr Buffet's company also has more than 90 operating units including Geico, the BNSF railroad, Dairy Queen ice cream and namesake energy, real estate brokerage and auto dealer businesses. 

REUTERS