Buffett sells some Moody's shares

As the credit rating company's share price increases, the Oracle of Omaha cashes in.

By GuruFocus.com May 2, 2013 8:42AM

Arrow Up © Cory Docken Spots Illustration JupiterimagesWarren Buffett's Berkshire Hathaway (BRK.A) sold 1.7 million shares of Moody's (MCO) over the past two days. After the sale, Berkshire still owns 26.6 million shares of Moody's, or 11.9% of the company. Berkshire's average sale price was a little above $60 a share.


Berkshire owned 48 million shares of Moody's before June 2009. It received its shares from the spin-off of Dun & Bradstreet, with a cost base of about $10 a share. Once traded at above $70 a share, Moody's stock price collapsed to below $20 amid its role in the financial crisis and market crash in 2009. Buffett sold 15 million shares at around $20. The recent bull market pushed Moody's stock price up to $60 again. So, Buffett started to sell again.


Buffett liked Moody's because of the company's unique position in credit ratings. It has a wide moat and extremely low capital requirement. But Moody's has largely lost its most important asset during the financial crisis -- its credibility. That is probably why Buffett is selling.





Buffett still owns more than 26 million shares of Moody’s. We won't be surprised to see him continues to sell these shares. We will monitor this closely and report any buys and sells in GuruFocus Real Time Picks.

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