Last up on Berkshire's conviction trade list is GlaxoSmithKline ( GSK), a $130 billion pharmaceutical name that Buffett's stock pickers unloaded en masse in the last quarter. With the $1.13 million share selloff in Berkshire's portfolio, the firm owns a "meager" $17 million stake in the firm. GSK isn't the only big pharma name that got sold off in the third quarter; the firm also dumped nearly 160,000 shares of Sanofi ( SNY).
GlaxoSmithKline owns a broad portfolio of drugs and vaccines that span nearly every category. Even though crown jewel Advair lost patent protection in 2010, generic competition has been far less than the bear case proposed by Wall Street. Going forward, Glaxo's investment case looks a lot like most of its peers: big R&D investments into rare diseases hold orphan drug potential for GSK, at the same time that longer-running efforts on more mainstream drugs get closer to market.
Glaxo is currently in the middle of a major cost-cutting initiative that should take some of the pressure off of the firm's pipeline until more new offerings hit the top of the income statement. But that hasn't stopped investors from pricing in black clouds over a 4.58% dividend yield at current price levels. Buffett and company are all but out of this stock at this point, but with decent fundamentals and rapidly improving technicals, GSK actually looks much better positioned than DaVita does right now.To see the rest of Berkshire Hathaway's plays -- including a complete list of which stocks the firm added or sold off -- check out the Warren Buffett Portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet . Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily , and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji