August 18, 2015 - What is Warren Buffett Secret Stock Filed to SEC?

“Warren Buffett’s Berkshire Hathaway Inc has eliminated its stakes in National Oilwell Varco Inc and Phillips 66, and on Friday signaled it may have another large investment in the works.

The changes were disclosed in a filing with the U.S. Securities and Exchange Commission detailing Berkshire’s U.S.-listed stock portfolio as of June 30.

Berkshire said it disclosed some information about its holdings confidentially to the SEC, which the regulator sometimes permits when Buffett is building a large new position.

Last week, Berkshire disclosed it had bought $3.09 billion of equities in the second quarter, without identifying the stocks.” Globe and Mail

What exactly are the stocks that Buffett has been buying?

Today we attempt to analyze the most likely stocks in the works.

First of all, we need to know what is Buffett's recent stock purchasing method. To do so we compare 4 recently purchased companies filed. (WFC, IBM, SU, PCP)

From this comparison, we found out some very interesting screens that were similar for all four companies. These screens were then put in our searched for all available stocks and can be found in the image below.

The resulting screen gave us a number of selected companies where we will review to determine the likelihood of the company to become the next Buffett legend.

Usually, before Buffett has purchased a stock, other billionaires has already jumped on the company. Using this methodology we screen out the companies other billionaires has purchased on this list, and further more, only those companies billionaires has been buying lately will be kept. The results are as follows.

Symbol	Owned By Billionaire and Bought recently
AFL	Y-S
COF	N
RY	N
BMO	N
CNQ	Y-B
JPM	Y-B
BNS	N
TD	N
TRI	N
BAM	N
LVS	Y-S
CSX	Y-B
BCE	N
WFC	Y-B
IBM	Y-B
BBT	N
PNC	N
AXP	Y-B
AEP	Y-B
SU	Y-B
NEE	Y-B
PCP	Y-B

The remaining companies are CNQ, JPM, CSX, WFC, IBM, AXP, AEP, SU, NEE, PCP.

Since Buffett is not identifying the stock in his purchase this time, it is highly likely this company has a smaller market cap compared with the rest. Therefore, we takeout those that has a market cap larger than $40B and also those companies that he already owns.

This leaves three candidates:

	Price/Book Ratio	Market Capitalization	Volume 90-Day Average
Canadian Natural Resources Ltd	1.005865	25149100000	2860204
American Electric Power Company Inc	1.6978	28624200000	2491766
CSX Corp	2.638926	29197300000	9017191

Given Buffett's history with oil and his recent pullback from investing in the oil sector, it is unlikely oil related companies will be on his list of acquisitions. American Electric Power is also not something that Buffett has mentioned in his investment style and doesn't fit into the moat that he usually heeds. Besides that, the comparison 90-day average volume for companies with this market capitalization usually revolves around 3M. The fact the CSX Corp sticks out as 9M average volume shows the likely factor that someone has been secretly acquiring the stock.

Therefore, the most likely candidate for the next Buffett acquisition is CSX Corp!