Warren Buffett is selling out of Canadian stocks at a record pace. In the past year, he has sold out of two positions completely and trimmed another. One of the Canadian stocks he sold had been acquired only a few months prior. These moves would tend to indicate that Buffett is presently bullish on Canada. However, there is a silver lining to this story. I’ll explore that momentarily. First, let’s take a look at the Canadian stocks Buffett sold and trimmed in the past 12 months.
Exited two, trimmed another
Buffett sold the following two Canadian stocks completely in the past 52 weeks:
- Restaurant Brands International
- Barrick Gold
He also trimmed his position in Suncor Energy Inc (TSX:SU)(NYSE:SU) while holding on to some of it.
Buffett’s moves on some of these stocks perplexed investors. Restaurant Brands is currently having a big hit with its new Popeyes’ Chicken Sandwich, which is driving considerable growth for the company. On the other hand, Tim Hortons is declining domestically and Burger King is seeing tepid growth. Perhaps Buffett thinks that with two out of the three QSR subsidiaries performing poorly, his money is better invested elsewhere. Nevertheless, Buffett’s protege Bill Ackman remains bullish on the stock.
Next we have Barrick gold. Buffett bought that one last Summer, and sold it in the fourth quarter. His entire holding period for that stock was only a few months. That’s a rare short term play for Buffett, but he was probably just looking to free some funds to invest elsewhere.
Finally, we have Suncor Energy. Now the last remaining Canadian stock in Buffett’s portfolio, he sold some of it in Q4. He still owns 19.1 million shares, worth about $550 million. It’s hard to say exactly what Buffett was thinking with this one. As he hasn’t sold all of it, he probably still likes the company. Buffett has gone on the record as predicting that energy prices would recover after the pandemic ended. Perhaps he simply trimmed Suncor to produce funds for another investment.
What should Canadian investors make of this?
If you’re a Canadian investor, you might find Buffett’s recent Canadian plays depressing. Selling out of two TSX stocks entirely and trimming another, it doesn’t look like Buffett is a huge bull on Canada. But looks can be deceiving. Warren Buffett has always had a huge home field preference, and him selling Canadian stocks doesn’t mean he actively dislikes them. It just means that he prefers to stick with what he knows.
On that note, it’s probably better to invest in what you know best rather than copy Buffett, anyway. Buffett is not infallible, and he has lost money on several of his recent investments. His 2020 Delta purchase and subsequent sale being just one recent example.
As Buffett himself has always said, you need knowledge to make informed investments. Perhaps, then, you’d be better off sticking to Canadian stocks that you understand, rather than Buffett stocks you don’t.
