What Buffett, Icahn and Other Billionaire Investors Are Buying in the Trump Era

Billionaire investors appear to see good times ahead with a fellow billionaire in the White House.

Warren Buffett, Carl Icahn, David Einhorn, Dan Loeb and Bill Ackman have been making some major investment moves in recent months, as revealed in regulatory filings with the Securities and Exchange Commission this week. They've invested millions, if not billions, of dollars in companies like Apple  (AAPL - Get Report) , Herbalife  (HLF - Get Report) , Chipotle  (CMG - Get Report) and Goldman Sachs  (GS - Get Report) . And investors would be wise to pay attention: the five have a combined estimated net worth of about $98 billion. 

A number of the men have weighed in one way or another on President Donald Trump, who claims to be a billionaire in his own right.

While Buffett was a vocal supporter of Hillary Clinton on the campaign trail, he expressed openness to Trump after the election, telling CNN's Poppy Harlow in November it's "very important that the American people coalesce behind the president." 

Fellow octogenarian Icahn is on the opposite end of the spectrum, politics-wise. The activist investor backed Trump's candidacy early on and since the election has been tapped to advise the president on regulations.

Loeb has admitted Trump's victory took him by surprise, but he's shuffling his portfolio accordingly.

We combed through the regulatory filings of these big-named investors to decipher how they're positioning themselves in the era of Trump. (13F filings, required from institutional investors by the SEC, are released 45 days after the end of each calendar quarter.) 

Here are some of the biggest buys (and sells) lately out of Wall Street's best and brightest.

Warren Buffett
Warren Buffett

Whatever his qualms once were about investing in airlines, Warren Buffett is over them now -- he's got about $10 billion invested in the industry.

The billionaire investor's Berkshire Hathaway (BRK.A) (BRK.B) made major increases to its stakes in four airline companies during the fourth quarter of the year, according to its latest 13F filing, released on Tuesday. It initiated a new position in Southwest Airlines (LUV) and increased holdings in Delta Air Lines (DAL), United Continental (UAL) and American Airlines (AAL). Quite a shift for someone who once called the airline industry a "death trap."

The four airlines comprise about 6% of his public equity portfolio as of December 31. 

A more than $350 million loss on a 1989 purchase of convertible preferred USAir Group stock for years left a bad taste in Buffett's mouth on airlines. As recently as 2013, he warned investors against the industry. "Investors have poured their money into airlines for 100 years with terrible results. It's been a death trip for investors," he said.

He appears to have since changed his tune -- and been rewarded for it. Shares of all four of the airlines in Buffett's portfolio have climbed in 2017, with Southwest being the best performer.

Buffett also increased his stake in tech giant Apple (AAPL) to $6.6 billion at the end of the year. Berkshire first bought a stake in the tech company in the first quarter of 2016. Based on the stock's current price, the position could be worth more than $7.5 billion.

The legendary investor completely cashed out of a handful of companies last quarter, including Kinder Morgan (KMI) and Deere & Co. (DE). He also significantly slashed his stake in both Verizon Communications (VZ) and Walmart (WMT) . Shares of the Arkansas-based are down about 0.8% this year, a sign of the broader retail industry's struggles.

Buffett left his five top positions untouched during the fourth quarter: Kraft Heinz (KHC), Wells Fargo (WFC), Coca-Cola (KO), IBM (IBM) and American Express (AXP).

The octogenarian's hold on his beverage bet should come as little surprise - he's never sold a share of Coke and has said he never will.

Carl Icahn
Carl Icahn

Carl Icahn took some time out from his relationship with Donald Trump to do some stock buying last year.

The New York-based activist investor increased his holdings in Herbalife (HLF) and Hertz Global Holdings (HTZ) during the fourth quarter of last year, according to his latest 13F filing, released Tuesday. The 80-year-old Icahn is a vocal Trump supporter and has been tapped by the president as a special adviser on regulatory reform.

Icahn listed $22.3 billion in equity holdings in an SEC filing as of December 31. 

His Herbalife stake is currently worth about $1.3 billion at current market value, and his Hertz stake is at $616 million. Icahn's Herbalife holdings have received a lot of public attention thanks to a public feud with fellow hedge fund manager Bill Ackman, who has shorted the stock.

Icahn exited his position in Voltari (VLTC) last quarter and cut his holdings in Freeport McMoRan (FCX), Nuance Communications (NUAN) and PayPal (PYPL).

The billionaire's largest holding remains his eponymous company, Icahn Enterprises (IEP), in which he has a more than $7 billion stake. He also owns about $3 billion in AIG (AIG) stock.

Trump's ties to Icahn, who Trump once mused he might consider enlisting as Treasury Secretary, have been cause for consternation. Democratic lawmakers on Monday sent a letter to White House Counsel Donald McGahn inquiring about the specifics of Icahn's role in the Trump administration.

"Icahn's role presents an unacceptable risk for further real or potential conflicts of interest absent immediate and thorough steps to address them," they wrote.

Democrats cited Icahn's vast investment holdings, specifically, his stake in CVR Energy (CVR). The oil refiner is subject under the Environmental Protection Agency to certain renewable fuel standards Icahn opposes. Scott Pruitt, who Trump has tapped to lead the EPA (a move Icahn supports), has been a critic as well.

According to his latest regulatory disclosure, Icahn has more than $1.5 billion invested in CVR.

David Einhorn
David Einhorn

With nearly $800 million invested in the stock, Apple (AAPL - Get Report) remains David Einhorn's top investment, but he's buying up notable positions in some other companies, too.

Einhorn's Greenlight Capital added four new positions to its public equity portfolio during the fourth quarter of 2016, per 13F filings with the Securities and Exchange Commission released on Tuesday. Agribusiness is clearly on the radar, with the hedge fund disclosing new stakes in Syngenta (SYT) and Monsanto (MON) . It also disclosed fresh positions in Alcoa  (AA - Get Report) and Fred's Inc. (FRED - Get Report) .

Both agribusiness buys could also be read as M&A plays. Monsanto is currently in the midst of an acquisition by Bayer AG, and Syngenta is set to be bought by China National Chemical. Both deals are subject to regulatory approval.

Einhorn gave a presentation at the Robin Hood Investors Conference in December on Bayer's proposed $66 billion takeover of Monsanto, announced in September. He cheekily cast the merger as a love story inspired by the film "The Princess Bride."

"As with all love stories, there is conflict, and an uncertain ending. Will something get in the way of true love. Or will they consummate the marriage and live happily ever after?" he said.

Greenlight is also long German-listed Bayer.

In his 2016 letter to investors, published by ValueWalk, Einhorn provided insights not only into his latest buys and sells but also into his broader thesis on the Trump administration.

"While it's hard to know exactly where President-elect Donald Trump stands from day to day, his main economic policy objective appears to be employment," he wrote. "To that end, he has proposed corporate tax cuts, infrastructure investment, and military build-up, combined with anti-immigration policies and trade protectionism. To the extent that he can implement these policies, the economy should accelerate, and given that we are starting with less than 5% unemployment, a labor shortage could develop."

He said Trump's proposed repatriation tax holiday leaves him bullish on Apple and his focus on jobs and wages improves the outlook for General Motors (GM - Get Report) , in which Greenpoint "dramatically increased" its position.

The letter was released prior to Trump's inauguration.

Dan Loeb
Dan Loeb

Billionaire hedge fund manager Dan Loeb thinks rate-sensitive financials, a.k.a. bank stocks, are the way to make money.

Loeb's Third Point LLC unveiled new positions in four banks in its most recent Securities and Exchange Commission 13F filing, released in February. The fund picked up investment positions in JPMorgan Chase (JPM - Get Report) , Bank of America (BAC - Get Report) , PrivateBancorp Inc. (PVTB) and Goldman Sachs (GS - Get Report) in the fourth quarter. (13F filings, required quarterly from institutional investors by the SEC, are released with a 45-day delay). It sold off a stake in Citigroup (C - Get Report) .

The 55-year-old Loeb has made a name for himself in crafting sharp letters to investors that explain the fund's positioning and also provide for some entertainment.

In his fourth quarter letter to investors, Loeb outlined some of his thinking behind betting on banks.

While he acknowledged the financials rally has been driven by items like expectations of tax cuts, the potential repeal of the Volcker rule and more relaxed regulations, he said his focus is on a shift in monetary and fiscal policy.

"The pendulum in monetary policy has begun to shift away from the past decade of extraordinary easing just as the pendulum in fiscal policy has begun to shift away from austerity and its limiting factors," he wrote. "The U.S. elections served as a marker for these policy shifts which, in our view, are bullish for rate‐sensitive financials"

On November 8, the day of the election, Third Point's financials portfolio was 4.4% of the fund. By the next month, it was 11.8%.

"This was a calculated top‐down shift and was expressed in stocks where we had a fundamental view," he wrote. "Our conviction has only increased since we first initiated these investments; we have added exposure to each of the names in 2017."

While Loeb, like many Americans, didn't anticipate Trump's win, he took "immediate steps" to reorganize his portfolio around investments he thinks will benefit from it. Apparently, he sees banking as a good Trump bet.

Bill Ackman
Bill Ackman

Billionaire Bill Ackman has completely cashed out of his stake in animal health company Zoetis (ZTS - Get Report) , instead making a big bet on fast food company Chipotle (CMG - Get Report) .

Regulatory filings with the Securities and Exchange Commission released on Tuesday reveal Ackman's Pershing Square Capital Management sold off its entire position in Zoetis during the fourth quarter of 2016. The hedge fund had already pared back its investment significantly earlier in the year. Ackman maintains a 2.8-million-stake in Chipotle, where he undertook an activist campaign last year.

The 50-year-old Ackman in December got his way with the burrito maker, adding four new members to its board of directors -- two he chose, two the company did. As part of the deal, Pershing Square agreed not to publicly comment on Chipotle for two years, according to The Wall Street Journal.

Though he can't say it, Ackman's Chipotle bet is doing well thus far in 2017. The company's stock has climbed more than 12% year-to-date, and at current market price, Pershing's position is worth about $1.2 billion.

Chipotle isn't the only restaurant company Ackman likes.

He has a more than $2.1 billion position in Restaurant Brands International (QSR - Get Report) , parent company to Burger King and Tim Hortons. It's his top holding, comprising about 30% of his public equity holdings as of the end of December. (13F filings, required quarterly from institutional investors by the SEC, are released with a 45-day delay.)

His number-three holding is another food-related company, Mondelez (MDLZ - Get Report) , maker of products including Oreo, Cadbury and Wheat Thins.