(By Mayur Pahilajani - iStockAnalyst Writer)

New York, NY - Berkshire Hathaway, Inc (NYSE: BRK.A), the holding company of billionaire investor Warren Buffett, may have seen better days with enlarged portfolio, but the firm’s balance sheet is reinforced with stable returns.

The consistent returns to keep the Omaha, Nebraska-based company’s financial health solid come from fixed-income investments. With recent commitment of up to $8 billion in General Electric Co. (NYSE: GE) and Goldman Sachs Group Inc. (NYSE: GS), the world's renowned stock picker expects to receive double-digit payouts per preferred share.

“When you’re getting fixed-income returns of 10 and 15 percent, why be in equities?” Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington who has studied Buffett’s investment history, told Bloomberg. “It could very well be he’s rebalancing the portfolio.”

The list on his strategic investments and returns portfolio is long and diversified with companies like USG Corporation (NYSE: USG) (a leading building products company), Swiss  Reinsurance Co. (the world’s second-biggest reinsurer), and Harley-Davidson, Inc. (NYSE: HOG) (an iconic American bike-maker).

“Buffett has shown a preference over the past couple years toward buying whole companies, the debt markets or other private deals,” Mohnish Pabrai, founder of Irvine, California- based Pabrai Investment Funds, told Bloomberg before the filing was released.

Berkshire, which had more than $30 billion in cash as of Sept. 30, bought $250 million worth of debt from Tiffany & Co. (NYSE: TIF), with 50 percent of the debt maturing in 2017 and the remaining in 2019.

But Berkshire said late yesterday in a regulatory filing disclosing U.S. equity investments that it has lowered its holdings in the world’s largest consumer-products maker, Procter & Gamble Co. (NYSE: PG), and the globe's most diverse maker of health care products, Johnson & Johnson (NYSE: JNJ).

Bueffet's stake in New Brunswick, New Jersey-based Johnson & Johnson is reduced by 54 percent to 28.6 million shares and in Cincinnati, Ohio-based Procter & Gamble by 9 percent to 96.3 million shares in the three months ended December 31.

The company’s overall portfolio was worth $51.87 billion at the end of fourth quarter, from $69.89 billion at the end of September.

Berkshire has shown its new interest in Nalco Holding Co. (NYSE: NLC), which is the Naperville, Illinois-based provider of water-treatment chemicals and services. The firm is expected to gain from a rise in demand for clean water in emerging markets, according to Bloomberg.

Berkshire has collected 8.74 million shares in Nalco as of Dec. 31, or about 6.4 percent of the stock. “We welcome Berkshire Hathaway as a shareholder and appreciate their interest and confidence,” Nalco spokesman Charlie Pajor told reporters on Tuesday, after revealing that the company was not aware of the Berkshire purchase until yesterday.

"The big story is that he's not giving up on banks and financial institutions," Michael Yoshikami, president of YCMNET Advisors in Walnut Creek, California, which owns Berkshire shares, told Reuters.

The SEC regulatory filing showed that Buffett's stake in Bank of America Corp. (NYSE: BAC) was worth $70.4 million as of Dec. 31, down from $175 million at the end of September.

While, its holdings in Wells Fargo & Co. (NYSE: WFC) had a market value of $8.55 billion, down 22 percent in the previous quarter. The market values of the shares in SunTrust Banks Inc. (NYSE: STI) and American Express Co. (NYSE: AXP) also declined.

"It shows his conviction that, once the deleveraging process is complete, companies with strong cash flow are going to be valued more highly by investors," Yoshikami told Reuters. "He's getting 10 to 15 percent interest on money he lends and may be selling stocks to fund that. He has become the secondary lender of choice to the financial world."

Source: http://www.hoovers.com/free/co/secdoc.xhtml?ID=10206&ipage=6420602