November 15, 2007 / 5:41 AM / 12 years ago

Berkshire buys CarMax; adds to Dow Jones, banks

(New throughout, adds byline)

By Jonathan Stempel

NEW YORK, Nov 14 (Reuters) - Warren Buffett’s Berkshire Hathaway Inc (BRKa.N)(BRKb.N) said on Wednesday it has taken a stake in CarMax Inc (KMX.N), the largest U.S. retailer of used cars, and increased its holdings in Dow Jones & Co DJ.N and several banking and health-care companies.

Omaha, Nebraska-based Berkshire revealed a 13.98 million share stake in CarMax valued at $284.3 million, according to a U.S. Securities and Exchange Commission filing showing its holdings as of Sept. 30.

It also showed a new, 2.7 million share stake in Wabco Holdings Inc (WBC.N), a maker of braking and other vehicle control systems spun off during the summer by American Standard Cos Inc ASD.N, another Berkshire holding.

Berkshire more than doubled its stake in Dow Jones, the publisher of the Wall Street Journal being acquired by Rupert Murdoch’s News Corp NWSa.N, to 6.34 million shares as of Sept. 30 from 2.78 million three months earlier.

Prior to Murdoch’s purchase at the beginning of August, Buffett had said the Journal’s cachet could make Dow Jones worth more. It was not clear whether Buffett added to his June 30 stake before or after Murdoch clinched the purchase.

Buffett also added to stakes in three of the six largest U.S. banks: Wells Fargo & Co (WFC.N), U.S. Bancorp (USB.N) and Bank of America Corp (BAC.N). He also boosted share holdings in drugmaker Johnson & Johnson (JNJ.N) and health insurers UnitedHealth Group Inc (UNH.N) and WellPoint Inc WLP.N.

He reduced stakes in two railroads, Norfolk Southern Corp (NSC.N) and Union Pacific Corp (UNP.N), while amassing a 17.2 percent stake in a third, Burlington Northern Santa Fe Corp BNI.N

The shares of companies often rise when Berkshire discloses investment stakes. Regulators sometimes let Berkshire delay disclosures so investors cannot try to copy Buffett, known as the Oracle of Omaha, before he is finished buying. CarMax shares, which closed Wednesday up 13 cents at $21.47, rose 5.5 percent to $22.73 in after-hours trading after Berkshire revealed its investment.

Buffett has transformed Berkshire since 1965 from a failing textile company into a $212 billion conglomerate by acquiring out-of-favor companies with strong earnings and management and investing in stocks.

Also on Wednesday, Berkshire reported lowered stakes in American Standard, Ameriprise Financial Inc (AMP.N), ConocoPhillips (COP.N) and Nike Inc (NKE.N) and Service.

Unlike in June, it listed no stakes in First Data Corp and ServiceMaster Co, which went private; as well as PetroChina Co (601857.SS), Tyco International Ltd TYC.N and Western Union Co (WU.N).

Berkshire’s reported holdings exceeded $7 billion in each of four companies: American Express Co (AXP.N), Coca-Cola Co (KO.N), Procter & Gamble Co (PG.N) and Wells Fargo.

Class A shares of Berkshire closed Wednesday up $1,800 at $137,500, while the Class B shares rose $46 to $4,570.

(Reporting by Jonathan Stempel; editing by Leslie Gevirtz and Andre Grenon)

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