Warren Buffett Stocks Ranked: The Berkshire Hathaway Portfolio
The Berkshire Hathaway portfolio is a diverse set of blue chips and, increasingly, lesser-known growth bets. Here's a look at every stock picked by Warren Buffett and his lieutenants.
Warren Buffett's stock selections aren't what they used to be. And in some ways, that's not necessarily a bad thing.
The Berkshire Hathaway (BRK.B) equity portfolio still includes a number of old-guard favorites. American Express has been a Buffett holding since the 1960s. The "Oracle of Omaha" has believed in Coca-Cola since 1987.
But increasingly, the real engines behind Berkshire Hathaway's investment arm are more recent pick-ups: growth-oriented stocks such as Apple and Amazon.com, and even lesser-known firms such as Snowflake and StoneCo.
The Berkshire Hathaway portfolio, like so many others, went through quite the roller-coaster ride in 2020. Buffett trimmed or cut dozens of stocks throughout the year. He owned several airlines at the start of 2020; now he holds none. Banks were aces among Buffett stocks to begin 2020; Berkshire spent the whole year kicking them to the curb.
And it appears "Uncle Warren" kept things moving in 2020's final quarter.
In short, he found plenty of new opportunities during Q4 ... and raised cash by abandoning several other positions. That's according to its most recent 13F regulatory filing, submitted to the Securities and Exchange Commission on Feb. 16.
If you want to know which stocks legendary investor Warren Buffett feels are worth his time and attention, look no further than the Berkshire Hathaway equity portfolio. (Just remember: A few of these Buffett stocks were actually picked by portfolio managers Todd Combs and Ted Weschler, who many believe are the top candidates to succeed Buffett whenever he decides to step down.)
Read on as we examine each and every holding to give investors a better understanding of the entire Berkshire Hathaway portfolio.
Price, share totals and other data as of Feb. 16. Stocks are listed in reverse order of their weight in the Berkshire Hathaway equity portfolio. Sources: Berkshire Hathaway’s SEC Form 13F filed Feb. 16, 2021, for the reporting period ended Dec. 31, 2020, and WhaleWisdom.
#45: United Parcel Service
- Shares held: 59,400
- Holding value: $10,003,000
- Percent of portfolio: 0.004%
United Parcel Service (UPS, $161.75) might be the smallest position among Warren Buffett's stocks.
But that doesn't mean it can't still be useful.
The world's biggest package delivery company continues to hang on by a thread. But perhaps the reason Uncle Warren hasn't ditched the stock is that he doesn't even notice it anymore. At fewer than 60,000 shares, this is a rump position, leftovers, an odd lot.
It's certainly less than what Buffett started out with. UPS stock was added to the Berkshire Hathaway portfolio during the first quarter of 2006, when Buffett added 1.43 million shares worth about $113.5 million at the time. That comes to an average price per share of $79.38.
But UPS never grew to be a major part of Berkshire Hathaway's portfolio, and Buffett has pared the position over the years to where it wouldn't be a surprise if he exited the stake at any time. He's also been characteristically quiet about the stake; there's no mention of United Parcel Service in CNBC's indispensable Warren Buffett archive.
Long-term, the position has been a disappointment, delivering a 218% total return (price plus dividends) since March 31, 2006. That's significantly less than the 314% return of the S&P 500.
But credit where credit is due: While UPS shares have slowed down over the past few months, they have delivered a nearly 60% total return, or about triple the broader market.
#44: SPDR S&P 500 Trust ETF
- Shares held: 39,400
- Holding value: $14,731,000
- Percent of portfolio: 0.01%
Warren Buffett's advice for most investors has always been simple: Buy an S&P 500 Index fund, and while you're at it, throw a little money into Treasuries to help you sleep well in down markets.
But for years, it was always "indexing for thee, but not for me." The market's most celebrated stock picker kept on doing what he's always done: picking stocks and not indexing a single dime.
Buffett finally took his own medicine in 2019's final innings, however, buying not one but two S&P 500-tracking exchange-traded funds (ETFs).
The first of those is America's first ETF: the SPDR S&P 500 Trust ETF (SPY, $392.30). The SPY tracks the 500 components of the S&P 500 Index. It does so for an extremely reasonable 0.0945% annually, which comes to just $9.45 annually on a $10,000 investment. While many use it as a buy-and-hold investment, its high volume makes it a popular tool for traders, too.
It's great that Buffett finally put his money where his mouth was. But if we're being honest, it's a strange position for a man who is actively trying to beat the index. After all, an ETF merely tracks an index, and will actually underperform slightly once costs are included.
Who knows? Maybe Uncle Warren really just wanted to drive his longstanding point home.
#43: Vanguard S&P 500 ETF
- Shares held: 43,000
- Holding value: $14,779,000
- Percent of portfolio: 0.01%
The other S&P 500 tracker Buffett bought in Q4 2019 was the Vanguard S&P 500 ETF (VOO, $360.71). And for the most part, it's pretty much the same product as the SPY.
Both funds track the S&P 500's components. Both funds are extremely liquid.
The most significant difference is the price. The VOO just has a lighter fee (typical of Vanguard ETFs) at 0.03% annually, versus the SPY's 0.0945%.
When you add together Berkshire's investments in the two tracking funds, you start to realize those investments probably are largely symbolic. Each stake represents roughly one one-hundredth of a percent of Berkshire Hathaway's equity holdings.
#42: Mondelez
- Shares held: 578,000
- Holding value: $33,796,000
- Percent of portfolio: 0.01%
Another meager position that survived another quarter is Mondelez (MDLZ, $54.88), whose brands include Oreo cookies, Cadbury chocolate, Halls cough drops, Trident gum and Triscuit crackers.
In 2007, Buffett invested in what was then known as Kraft Foods. The packaged food company changed its name to Mondelez in 2012 after spinning off its North American grocery business, which was called Kraft Foods Group and traded under the ticker KRFT. Kraft Foods Group later merged with H.J. Heinz, in a 2015 deal backed by Buffett, to form Kraft Heinz.
A couple years later, in 2017, Buffett shot down speculation that Kraft Heinz would buy the global snacks giant.
Berkshire Hathaway maintains a significant stake in KHC (more on that in a bit). MDLZ, not so much. Berkshire isn't even among Mondelez's top 100 shareholders, at just 0.04% of MDLZ shares outstanding, according to data from S&P Global Market Intelligence. And Mondelez accounts for just 1/100th of a percent of the total value of BRK.B's equity portfolio.
The tiny position did hold up well during the bear market, as investors added some consumer staples stocks for defense. But MDLZ has put up more modest returns since stocks got back into gear. All told, Mondelez shares are actually down 5% since the Feb. 19, 2020, market top, while the S&P 500 has delivered a total return of about 18%.
Nothing to see here, folks.
#41: Liberty Latin America
- Shares held (Class A / Class C): 2,630,792 / 1,284,020
- Holding value (Class A / Class C): $29,280,000 / $14,240,000
- Percent of portfolio (Total): 0.02%
Berkshire has made several de facto bets on legendary pay-TV mogul John Malone. Liberty Latin America Class A (LILA, $11.93) and Liberty Latin America Class C (LILAK, $11.62) shares are the smallest of those.
Liberty Latin America provides cable, broadband, telephone and wireless services in Chile, Puerto Rico, the Caribbean and other parts of Latin America. Liberty Global, the multinational telecommunications company in which Berkshire also holds a stake, issued tracking stock of its Latin American operations in 2015, then spun off those operations entirely in 2018.
More recently, in November 2020, Liberty Latin America closed on its nearly $2 billion purchase of AT&T's (T) wireless and wireline assets in Puerto Rico and the U.S. Virgin Islands.
Malone, a pioneer in the telecom industry and a multibillionaire himself, has created outsized value for shareholders over his long career. And as you'll see, Berkshire has an affinity for Malone-backed enterprises.
The initial appeal to Buffett and his portfolio managers is plain to understand: Game knows game.
However, Buffett continues to tinker with his position. During the third quarter, he added roughly 4% (66,567 shares) to his Class C shares, but trimmed his Class A position by about 5% (160,478 shares). Then in the fourth quarter, he reversed course on the Class C shares, reducing his position by 146,177 shares, or 10%.
#40: Procter & Gamble
- Shares held: 315,400
- Holding value: $43,885,000
- Percent of portfolio: 0.02%
Warren Buffett is clearly fond of Dow Jones stocks, which can be found throughout the Berkshire Hathaway portfolio. But Procter & Gamble (PG, $127.92) is one Dow component has fallen by the wayside as a Berkshire Hathaway investment.
Buffett came to own P&G – maker of Tide detergent, Crest toothpaste and Pampers diapers – via the holding company's 2005 acquisition of razor-maker Gillette. At the time, Buffett, a major Gillette shareholder, called the tie-up a "dream deal." Procter & Gamble became one of BRK.B's biggest equity positions.
The dream didn't last long. The Great Recession eroded the pricing power of old-line consumer staples companies such as P&G. The company embarked on a plan to shed 100 underperforming brands. The Duracell battery business happened to be on the list, and Berkshire bought it in 2014 in exchange for PG stock. Two years later, Buffett pared what was left of the P&G stake by 99%. He hasn't added to the position since.
While this "Buffett stock" is almost phased out, P&G did prove a helpful holding through the bear market and early on in the recovery. However, like many defensive stocks, PG shares have fallen out of favor over the past few months.
#39: Johnson & Johnson
- Shares held: 327,100
- Holding value: $51,479,000
- Percent of portfolio: 0.02%
While Warren Buffett smiled upon healthcare stocks in Q3, his tiny Johnson & Johnson (JNJ, $165.07) position didn't budge. Like fellow defensive stock P&G, JNJ has fallen out of favor with Buffett and represents nothing more than a token holding.
Blame the diversified health-care giant's history of headline-grabbing faceplants. The healthcare stock struggled with manufacturing problems and allegations of illegal marketing practices in 2010 and 2011. Buffett was critical of the company for those gaffes, as well as for using too much of its own stock in its 2011 acquisition of device-maker Synthes. Disenchanted with Johnson & Johnson, Berkshire dumped most of its stake in 2012.
Berkshire's position in JNJ topped out at 64.3 million shares in 2007. Today, the holding company's equity stake comes to just 327,100 shares (about $49 million), which represents roughly one one-hundredth of shares outstanding.
That position has done OK, but hardly great, over the past year, up about 14% to the broader market's 18%. Another boost could be in the offing if its COVID vaccine gets approved sometime soon, but Berkshire's position in JNJ is so small that it would hardly have an impact.
#38: Biogen
- Shares held: 643,022
- Holding value: $157,450,000
- Percent of portfolio: 0.06%
Berkshire Hathaway already had a few healthcare holdings heading into the final quarter of 2019, and Buffett added to that number with his Q4 entry into biotechnology giant Biogen (BIIB, $279.32). The roughly 640,000-share stake is worth about $157 million at present.
That's hardly a huge stake, as far as Buffett stocks go. The holdings account for less than a tenth of a percent of BRK.B's total equity portfolio. And Berkshire's not even one of Biogen's top 25 investors at just 0.4% of BIIB shares outstanding.
While Buffett has a history of making bets on the healthcare sector, the small stake size signals this might be an idea from lieutenants Ted Weschler or Todd Combs.
Biogen's fates are most heavily tied at the moment to its Alzheimer's treatment, and lately, those fates haven't looked so good. A few months ago, an FDA advisory committee voted resoundingly against supporting Biogen's aducanumab for approval. And although the company was looking at a March 7 decision over whether its drug would be approved, the FDA pushed that date into early June.
"We hosted a call with two Ex-FDA regulatory experts to discuss the aducanumab regulatory process and implications of recent events," UBS analysts wrote Feb. 11. "While both experts were significantly more bullish on approval vs. our last call in November (15-20% prob. of approval), they were split in terms of whether it gets approved this review cycle."
One positive, however: Biogen shares, deep in value territory during our last review a few months ago, have perked up since then. BIIB stock has delivered a total return of 12% over the past three months, versus about 10% for the broader market. Better still, Biogen also reliably generates several billion dollars each year in free cash flow.
#37: Suncor Energy
- Shares held: 13,849,207
- Holding value: $232,390,000
- Percent of portfolio: 0.09%
For a few precious months, Suncor Energy (SU, $18.79) was the lone energy position in the Berkshire Hathaway portfolio. However, Warren Buffett has found a new sector play to latch onto (more on that in a minute), and he has put some of his Suncor stake to pasture.
After trimming his position a little in Q1, he added back to it in a big way during Q2. Buffett bought 4.25 million shares during the second quarter to bring his stake to 19.2 million. But after enjoying some modest gains, he shed 5.4 million shares, or about 27% of the position, in Q4 2020.
The remaining holding represents just less than a tenth of a percent of the Berkshire equity portfolio's worth, according to data from S&P Global Market Intelligence. But the stake is meaningful to Suncor, as it represents about 1% of shares outstanding; Berkshire remains a top-25 shareholder.
If this bet sounds familiar, it should: When Buffett entered SU during the fourth quarter of 2018, that marked the second time Berkshire Hathaway had taken a stab at Suncor. The company originally invested in the energy giant in 2013, then sold the entirety of the position three years later.
Suncor – an integrated energy giant whose operations span oil sands developments, offshore oil production, biofuels and even wind energy – also sells its refined fuel via a network of more than 1,500 Petro-Canada stations.
#36: Sirius XM
- Shares held: 50,000,000
- Holding value: $318,500,000
- Percent of portfolio: 0.12%
Sirius XM (SIRI, $5.99) – a company that reaches roughly 100 million listeners via its core satellite radio business and Pandora, which it acquired in 2018 – is another stock pick related to John Malone. Malone is chairman of Liberty Media, which owns a massive stake in Sirius XM.
As Kiplinger has noted, it's possible that all of Berkshire's investments in companies that are somehow tied to Malone's truly Byzantine corporate structure could very well be the responsibility of one of Buffett's portfolio managers. Liberty Media was a large position held by Ted Weschler's Peninsula Capital in his pre-Berkshire days.
However, Berkshire's affinity for this position has been waning of late.
Buffett first bought shares in SIRI during the final quarter of 2016. Berkshire unloaded a small portion (1%) of its Sirius XM position during the third quarter, then trimmed the position by another 3.9 million shares, or about 2%, in Q1 2020.
He really took out the hatchet during 2020's second quarter, however, unloading more than 82 million shares, or 62% of the remaining stake. That brings its ownership down from 3% to a little more than 1%.
Nonetheless, Buffett, who left the position alone in the second half of 2020, is the fourth-largest owner of SIRI stock, well behind Liberty Global's 74% stake.
#35: E.W. Scripps (NEW POSITION)
- Shares held: 23,076,923
- Holding value: $364,384,614
- Percent of portfolio: 0.14%
Berkshire Hathaway in September 2020 backed a $2.65 billion deal by TV station-owner E.W. Scripps (SSP, $17.57) to purchase broadcaster ION Media.
In return for helping finance the acquisition, Berkshire made a $600 million preferred equity investment in Scripps and received a warrant to buy up to 23.1 million shares of the communications company.
Berkshire's investment, which gives it a 33% ownership stake in Scripps, accounts for a mere 0.14% of the total value of its equity portfolio.
Don't bother trying to copycat Buffett on this one. It's another case of him getting terms unavailable to mere mortals.
#34: Teva Pharmaceutical
- Shares held: 42,789,295
- Holding value: $412,916,000
- Percent of portfolio: 0.15%
Berkshire Hathaway's move into Teva Pharmaceutical (TEVA, $11.37) during 2017's fourth quarter looked like a classic Warren Buffett value move at the time.
The Israel-based drug manufacturer was out of favor – to put it mildly. A bloated balance sheet, mass layoffs and the looming expiration of drug patents had short sellers licking their chops.
By the time Buffett stepped in, Teva shares were off about 70% from their mid-2015 peak. Berkshire then doubled his stake in Teva during the first quarter of 2018, when shares looked really cheap.
They're still cheap.
TEVA shares still are worth 35% less than what they were worth at the start of Q2 2018. They currently trade at roughly four times analysts' estimates for future earnings, which is a fraction of the S&P 500's forward P/E. The pain includes a big share slide in August, triggered by the U.S. government's lawsuit accusing Teva of defrauding Medicare to juice sales of its multiple sclerosis drug Copaxone.
Berkshire trimmed its stake by 1% in Q1 and has stayed pat since then, leaving it with 3.9% ownership of the pharmaceutical name. That makes the holding company Teva's fourth-largest shareholder.
#33: Marsh & McLennan (NEW POSITION)
- Shares held: 4,267,825
- Holding value: $499,336,000
- Percent of portfolio: 0.19%
Berkshire Hathaway's core operations are mostly to be found in the insurance industry, but they've never been a major factor in its equity portfolio. Indeed, the company dumped what was left in its stake of Travelers (TRV) in early 2020.
So it's something of a surprise that BRK.B initiated a position in Marsh & McLennan (MMC, $114.50) in the fourth quarter. Buffett picked up 4.2 million shares valued at not quite half a billion dollars.
The position accounts for a minuscule 0.2% of the total value of Berkshire's stock holdings. And it gives Berkshire control of only 0.8% of the insurance company's shares outstanding.
Shares in MMC, which provides various risk, strategy and consulting services, are long-time market laggards. Perhaps Buffett sees untapped value. The company also pays a modest dividend yielding 1.6% at present.
#32: Globe Life
- Shares held: 6,353,727
- Holding value: $603,350,000
- Percent of portfolio: 0.22%
Globe Life (GL, $93.78) – known as Torchmark up until 2019 – is similar to MMC in that it's a small insurance-related holding in the Berkshire Hathaway portfolio. Specifically, GL is a life and health insurance company.
It might be a boring company, but it has very quietly been a very good stock pick. Berkshire Hathaway has owned shares in Globe Life/Torchmark since early 2001. In that time, GL has generated a total return of 559%, easily outdoing the S&P 500's 403% performance with dividends included.
BRK.B owns 6.1% of Globe Life's shares outstanding, which makes it the firm's third-largest shareholder after Vanguard and BlackRock (BLK).
#31: Liberty Global
- Shares held (Class A / Class C): 18,010,000 / 7,346,968
- Holding value (Class A / Class C): $436,202,000 / $173,756,000
- Percent of portfolio (Total): 0.22%
Liberty Global, represented via Class A (LBTYA, $26.25) and Class C (LBTYK, $25.87) shares, is another one of Berkshire's bets on communications and media companies whipped up by billionaire dealmaker John Malone.
Liberty Global bills itself as the world's largest international TV and broadband company, with operations in seven European countries. Berkshire's investment in the Class A shares dates to the fourth quarter of 2013. It picked up the Class C shares, which have no voting power, in the first quarter of 2014.
Rumors had the company buying Univision for $9 billion, but CEO Mike Fries shot that down. That said, Liberty Global does plan to extend its international partnership with Netflix (NFLX), and it recently reported much better full-year 2020 results than Wall Street expected.
Even after unloading 1.3 million shares, or 6% of its stake, during Q3 2020, Berkshire is the second-largest holder of LBTYA at 9.9% of shares outstanding. Meanwhile, it's the No. 7 holder of LBTYK at 1.9% after leaving that position untouched.
#30: Axalta Coating Systems
- Shares held: 23,420,000
- Holding value: $668,641,000
- Percent of portfolio: 0.25%
Axalta Coating Systems (AXTA, $27.13), which makes industrial coatings and paints for building facades, pipelines and cars, joined the ranks of the Buffett stocks in 2015, when Berkshire Hathaway purchased 20 million shares in AXTA from private equity firm Carlyle Group (CG). The stake makes sense given that Buffett is a long-time fan of the paint industry; Berkshire Hathaway bought house-paint maker Benjamin Moore in 2000.
Berkshire trimmed a small number of shares during Q3 2020, but remains Axalta's largest investor, holding 10% of the shares outstanding.
The company, which makes industrial coatings and paints for building facades, pipelines and cars, is the belle of the ball when it comes to mergers and acquisitions suitors. The company has rejected more than one buyout bid in the past, and analysts note that it's a perfect target for numerous global coatings firms.
It'd also be a little easier to digest than it was at this point a year ago. Over the past 52 weeks, AXTA shares are off by about 9%.
#29: Synchrony Financial
- Shares held: 20,128,000
- Holding value: $698,642,000
- Percent of portfolio: 0.26%
Synchrony Financial (SYF, $37.90) jibes with Buffett's affection for credit-card companies and banks.
Synchrony, a major issuer of charge cards for retailers, was spun off of GE Capital in 2014. It's both a lender and a payments processor – like Buffett's beloved American Express – but it caters to customers who skew more toward the middle and lower end of the income scale.
Berkshire initiated a position in SYF during the second quarter of 2017, paying an estimated price per share of $30.02. Since the end of Q2 2017, the stock has gained just 38%, versus a 74% total return for the S&P 500 in that same time frame.
Buffett trimmed 3% of his stake in Q1 but left it alone in the second and third quarters. He now owns 3.4% of Synchrony Financial's shares outstanding, which makes him the firm's seventh-largest shareholder.
#28: T-Mobile US
- Shares held: 5,242,000
- Holding value: $706,884,000
- Percent of portfolio: 0.26%
Berkshire Hathaway bulked up its exposure to the telecommunications sector during the third quarter by acquiring a small stake in wireless communications company T-Mobile US (TMUS, $122.00).
Then Buffett literally doubled down on that bet during Q4 2020, growing his stake by another 2.8 million shares, or 117%.
T-Mobile is certainly a much more attractive investment since it closed its $26 billion merger with Sprint in April 2020. The deal created a real No. 3 wireless company whose total subscribers are at least within the same ballpark as Verizon (VZ) and AT&T (T). Shares have waned of late, but they're still up about 29% over the past 52 weeks.
The 5.2 million-share, $707 million stake now represents a quarter of a percent of the Berkshire Hathaway portfolio's worth. It's certainly a much bigger position than it was, but it still amounts to a 0.4% stake in the firm, putting Buffett outside of the company's top 25 shareholders.
#27: RH
- Shares held: 1,732,548
- Holding value: $775,350,000
- Percent of portfolio: 0.29%
Warren Buffett has found a winner in RH (RH, $487.31), which many readers know as Restoration Hardware.
Berkshire, which already is positioned in home furnishings retail via its Nebraska Furniture Mart subsidiary, added more exposure to the space with his Q3 2019 entry into RH, then made a considerable addition to his stake to close out the year.
RH operates 106 retail and outlet stores across the U.S. and Canada. It also owns Waterworks, a high-end bath-and-kitchen retailer with 14 showrooms.
While brick-and-mortar retailers have struggled mightily over the past few years thanks in part to the rise of e-commerce, RH has found success catering to the upper crust. And that success continued throughout the COVID pandemic as Americans, forced to work from home, decided to spend on improving their environs.
RH shares have shot 130% higher since Jan. 1, 2020, versus a 24% return for the S&P 500 in that same time frame.
It's hard to tell whether this was an Oracle of Omaha buy, or a project of one of his lieutenants, Ted Weschler or Todd Combs. Buffett has been mostly mum on RH. Still, the stake fits broadly with Buffett's worldview. Buffett stocks tend to be bets on America's growth, which is exactly what a bet on housing and housing-related industries is.
Berkshire even put a little more money into the bet, buying 24,200 shares to grow its stake by about 1%. Buffet currently is the fifth-largest investor by virtue of owning about 8.5% of all RH shares outstanding.
#26: Store Capital
- Shares held: 24,415,168
- Holding value: $829,627,000
- Percent of portfolio: 0.31%
Berkshire's position in Store Capital (STOR, $33.27), which it entered during the summer of 2017, was an unusual one. Real estate investment trusts (REITs) – a way to invest in real estate without owning the actual assets – have never been big among Buffett stocks.
Store invests in single-tenant properties including chain restaurants, supermarkets, drugstores and other retail, service and distribution facilities. That is to say, Store is a bet on brick-and-mortar retail, which is thought to be in permanent decline.
Buffett, however, spied value – and he spied it for quite some time. Store Capital CEO Christopher Volk told CNBC that Buffett studied the REIT for three years before taking his position.
The Oracle of Omaha must've seen similar value arise in the company's February-March dip, which sent STOR shares off by roughly 65% from peak to trough. We say that because he bought 5.8 million shares, or an additional 31%, to bring his stake to 24.4 million shares yielding 5.5% at current prices.
Good news for Buffett: STOR shares are up 109% since the March bottom to handily beat the market since then.
BRK.B now owns 9.6% of shares outstanding, making it Store Capital's third-largest shareholder after Vanguard and BlackRock.
#25: Kroger
- Shares held: 33,534,017
- Holding value: $1,065,040,000
- Percent of portfolio: 0.39%
Berkshire Hathaway's stake of supermarket titan Kroger (KR, $33.66), entered in Q4 2019, was a little bit of a head-scratcher at first, but clearly, Warren Buffett has warmed to this position. He added another 8.6 million shares during 2020's final stanza to boost his stake by 34%.
Investors in general have soured on traditional supermarket chains in recent years, as big-box stores like Walmart (WMT) and Target (TGT), not to mention Amazon.com, have encroached on the grocery space.
But the position also wasn't like many of Berkshire's other more recent positions, which have been much more aggressive in nature. Kroger is an old-school, old-economy value play, especially when compared to the likes of Amazon, StoneCo, Biogen and Snowflake.
Nonetheless, in 2019's final quarter, Buffett initiated a 18.9 million-share position, then added another 3 million shares (15%) in Q2 2020 to give him nearly 22 million shares. He added to the position again during the third quarter, upping his stake by another 13% to almost 25 million shares.
Following the most recent purchase, KR still is no home-run swing at just 0.37% of the total Berkshire Hathaway equity portfolio. But Buffett's stake has swelled enough to make him the fourth-largest shareholder of Kroger, at 4.4% ownership of the grocer.
Don't sleep on KR. Believe it or not, it's one of the largest retailers in the world. Kroger has roughly 2,750 retail food stores operating under such banners as Dillons, Ralph's, Harris Teeter and its namesake brand, as well as 1,585 gas stations and even 170 jewelry stores under banners including Fred Meyer Jewelers and Littman Jewelers.
That's a big enough footprint for it to put up a fight against the Amazons and Walmarts of the world.
#24: StoneCo
- Shares held: 14,166,748
- Holding value: $1,188,873,000
- Percent of portfolio: 0.44%
Brazilian financial technology firm StoneCo (STNE, $93.81) provides software and hardware for companies to facilitate credit- and debit-card payments.
And while it was already one of the "growthiest" Warren Buffett stocks when it entered the position in October 2018, things have really taken off amid the COVID, which has enhanced the fortunes of all things e-commerce.
Consider its most recent quarterly earnings. StoneCo announced total payment volume (TPV) of 69.7 billion Brazilian reals (+113.8% year-over-year), revenues of 934.3 billion reals (+39.2%) and net income of 249.1 million reals (+30.2%).
No wonder the stock has well more than doubled over the past year, and it has nearly tripled since Buffett added it to the Berkshire Hathaway portfolio.
Given the relatively small position in STNE, and the fact that it's a fintech company, you won't be surprised to learn the position was initiated by Buffett lieutenant Todd Combs – with the Oracle of Omaha's blessing, no doubt.
OK. StoneCo isn't necessarily in the Buffett stocks blueprint, but it nonetheless fits well with Berkshire Hathaway's general bullishness on companies that facilitate and process payments. "Payments are a huge deal worldwide," Warren Buffett said at Berkshire's 2018 shareholder meeting.
#23: Wells Fargo
- Shares held: 52,423,867
- Holding value: $1,582,152,000
- Percent of portfolio: 0.59%
Warren Buffett has lost his patience with Wells Fargo (WFC, $34.79).
Wells Fargo, which has been in the Berkshire portfolio since 2001, has turned into a weight around Buffett's neck since 2016, when numerous scandals bubbled to the surface. The bank opened millions of phony accounts, modified mortgages without authorization and charged customers for auto insurance they did not need.
The cleanup process has been slow, and it has claimed not one but two CEOs. WFC stock, meanwhile, has lagged its peers for quite some time.
So Buffett started selling, and what started as a drizzle has turned into a monsoon.
Berkshire sold off Wells Fargo shares in numerous quarters since the start of 2018. However, for several quarters, most of those sales appeared to be routine paring of the position to keep it below a regulatory 10% maximum ownership threshold for banks.
Then came the hacksaw:
- Q4 2019: Buffett dumps more than 55 million shares (~15% of the position).
- Q2 2020: Buffett jettisons another 85.6 million shares (~26%).
- Q3 2020: Down go another 85.6 million shares (~46%).
- Q4 2020: Buffett makes his deepest cut yet, as a percentage, unloading 75 million shares, or 58% of the remaining position.
With the most recent sale, Berkshire's stake has dwindled to a 1.3% stake in WFC, putting it outside the top five shareholders for the first time in years.
#22: Mastercard
- Shares held: 4,564,756
- Holding value: $1,629,344,000
- Percent of portfolio: 0.60%
Berkshire Hathaway might own Mastercard (MA, $341.21), but Warren Buffett has given credit where credit is due: namely, to his portfolio managers Combs and Weschler.
Buffett's biggest regret is not pulling the trigger sooner.
"I could have bought them as well, and looking back, I should have," Buffett said about Visa and Mastercard in 2018, referring to his own investment in American Express.
Mastercard, which boasts 967 million cards in use across the world, is one of several payments processors under the Berkshire umbrella. However, after mostly leaving the stock alone since entering a position during the first quarter of 2011, Buffett sold off 300,000 shares, or 7% of the stake, in Q2 2020.
Of course, MA has returned some 1,330%, including dividends, since March 31, 2011 – several times better than the S&P 500 in that time – so it's hard to begrudge Warren Buffett a little profit-taking. And since then, he has left well enough alone.
#21: Snowflake
- Shares held: 6,125,376
- Holding value: $1,723,681,000
- Percent of portfolio: 0.64%
Warren Buffett made quite the splash earlier this fall when he finally dove head-first into the Snowflake (SNOW, $294.55) initial public offering (IPO).
The chairman and CEO of Berkshire Hathaway, for the record, has never been a fan of IPOs. He's said so, on the record, and has notably turned up his nose at some of the most heavily hyped stock market debuts.
But that didn't stop him from being involved when Snowflake, a cloud infrastructure unicorn, hit the public markets with a blockbuster IPO.
Snowflake is a cloud-data warehousing company that plays in a roughly $55 billion annual market – a market that's expanding. The firm boasts 3,554 customers, 65 of which were each responsible for generating around $1 million in revenues within a 12-month period.
Snowflake is generating a lot of hype because it offers a way for companies to run their software on various cloud platforms, be they provided by Amazon.com, Microsoft (MSFT) or Google parent Alphabet (GOOGL), to name just three.
#20: Amazon.com
- Shares held: 533,300
- Holding value: $1,736,921,000
- Percent of portfolio: 0.64%
Amazon.com (AMZN, $3,268.95) has, up until the past month or so, been one of the most electric blue chips of the past year. And it has been one of the splashiest recent additions to the Berkshire Hathaway portfolio.
The holding company disclosed its 483,300-share position after the first quarter of 2019, then added another 54,000 shares the next quarter. AMZN shares are up 73% since the end of Q2 2019, versus just 38% returns for the broader market.
Amazon wasn't Buffett's idea, by his own admission. Before Berkshire Hathaway submitted its first-quarter regulatory filing with the Securities and Exchange Commission, Buffett told CNBC: "One of the fellows in the office that manage money ... bought some Amazon, so it will show up (when that file is submitted)."
Buffett has long been an admirer of Amazon CEO Jeff Bezos, he admitted in an interview, and said he wished he'd bought the stock sooner. "Yeah, I've been a fan, and I've been an idiot for not buying" AMZN shares, Buffett told CNBC.
Berkshire holds an insignificant 0.1% of Amazon's shares outstanding to barely keep it within the top 100 shareholders. Interestingly, Buffett marginally reduced the position by 4,000 shares in Q1 2020, but he hasn't touched the stake since.
#19: Bristol-Myers Squibb
- Shares held: 33,336,016
- Holding value: $2,067,833,000
- Percent of portfolio: 0.77%
Bristol-Myers Squibb (BMY, $59.40) was one of several Big Pharma bets Warren Buffett during the third quarter of 2020. In the case of BMY, Berkshire took on almost 30 million shares worth $1.81 billion.
Apparently Buffett grew even fonder of the company over the next few months. He tacked on another 3.4 million shares during Q4 2020, growing the position by 11%.
BMY beefed up in a big way a year ago when it acquired pharmaceutical giant Celgene, and that has to be a big part of the attraction to this stock. The deal brought in a pair of blockbuster multiple myeloma treatments: Pomalyst and Revlimid, the latter of which also treats mantle cell lymphoma and myelodysplastic syndromes.
That's kind of par for Bristol-Myers' course. A long track record of successful acquisitions has kept the pharma company's pipeline primed with big-name drugs over the years. Among the better-known names today are Coumadin, a blood thinner, and Glucophage, for type 2 diabetes.
#18: Visa
- Shares held: 9,987,460
- Holding value: $2,184,557,000
- Percent of portfolio: 0.81%
Visa (V, $207.90) operates the world's largest payments network, and thus is well-positioned to benefit from the growth of cashless transactions and digital mobile payments. Like Mastercard, Visa was the idea of lieutenants Todd Combs and/or Ted Weschler (Buffett won't tell). And like Mastercard, Buffett wishes Berkshire had bought more.
Berkshire Hathaway first bought Visa in the third quarter of 2011, and it has proven to be a mammoth winner. Including dividends, Visa has delivered a whopping annualized return of 28.2% since Sept. 30, 2011. It's also a dividend-growth machine, ramping up its payout by 128% over the past five years alone.
"If I had been as smart as Ted or Todd, I would have (bought Visa)," Buffett told shareholders at the 2018 annual meeting.
Visa accounts for a modest but not insignificant holding at 0.81% of Buffett's portfolio. Meanwhile, Berkshire's half-percent stake in Visa doesn't even put it among the top 25 investors.
#17: Merck
- Shares held: 28,697,435
- Holding value: $2,347,450,000
- Percent of portfolio: 0.87%
Warren Buffett also unveiled a new position in Dow component Merck (MRK, $74.25) during Q3 2020. Berkshire Hathaway bought 22.4 million shares in the third quarter worth nearly $1.86 billion.
And like with Bristol-Myers Squibb, Buffett also saw enough in Merck that he added to his stake in 2020's fourth quarter. Specifically, he tacked on another 6.3 million shares for a sizable 28% boost to Berkshire's position.
Central to Merck's fundamental performance is Keytruda, a blockbuster cancer drug approved for more than 20 indications. Additionally, MRK has a favorable patent setup with no key brands losing marketing exclusivity until 2022. Keytruda is on patent until 2028.
As for Merck's dividend, it's reliable and growing. The payout had been rising by a penny per share for years, but now it's starting to heat up. MRK upgraded its payouts by 14.6% in 2019, then followed that up with a nearly 11% improvement for 2020.
#16: Liberty Sirius XM Group
- Shares held (Class A / Class C): 14,860,360 / 43,208,291
- Holding value (Class A / Class C): $641,819,000 / $1,879,993,000
- Percent of portfolio (Total): 0.94%
Berkshire has managed to find a way to own Sirius XM in not one, not two, but three different ways.
Liberty Media has for years held a large stake in Sirius XM Holdings. But in 2015, the company actually recapitalized, offering (among other things) several tracking stocks that allowed investors to enjoy in the performance of Liberty's Sirius XM investment directly rather than get it piecemeal through Liberty Media itself.
Thus, Buffett was exposed to Sirius XM before it directly invested in SIRI shares in Q4 2016. But over time, he has bought more of the tracking stock; the overall body of tracking stock currently represents Liberty's roughly 70% stake in Sirius XM.
The Berkshire Hathaway portfolio now holds more than 58 million shares of Liberty Sirius XM Group Series A (LSXMA, $43.33) and Liberty Sirius XM Group Series C (LSXMK, $42.80) combined. That stake has been largely left alone over the past few quarters.
Warren Buffett is the largest institutional shareholder in each class, holding 4.3% of Liberty Sirius XM's A shares, and 12.6% of the C shares.
#15: AbbVie
- Shares held: 25,533,082
- Holding value: $2,735,870,000
- Percent of portfolio: 1.01%
Berkshire Hathaway's largest new healthcare bet in Q3 was a 21.3-million, $1.86 billion stake in biopharmaceutical firm AbbVie (ABBV, $104.20).
AbbVie is best known for blockbuster drugs such as Humira and Imbruvica, but analysts are also optimistic about the potential for Rinvoq and Skyrizi, which treat rheumatoid arthritis and plaque psoriasis.
And let's not forget that ABBV is a big hit with long-term dividend investors.
The pharmaceutical company is a Dividend Aristocrat, by virtue of having raised its dividend for 49 consecutive years. Even better, its current payout is one of the highest in the S&P 500, and the company has raised the payout at a 18% rate over the past five years. Its dividend yield of 5.0% is several times better than the S&P 500 average of about 1.5%.
Buffett treated AbbVie just like Merck and Bristol-Myers Squibb, growing his position in ABBV by 4.3 million shares, or about 20%. But that doesn't mean Berkshire went full bull on all of its third-quarter Big Pharma buys. No longer in the portfolio is Pfizer (PFE), which Buffett exited after just a single quarter of ownership.
#14: Verisign
- Shares held: 12,815,613
- Holding value: $2,773,299,000
- Percent of portfolio: 1.03%
Berkshire bought Verisign (VRSN, $198.15) – an internet infrastructure service company that quite literally keeps the world connected online and acts as a domain registry for the .com, .net and other top-level domains – during a dip in the final quarter of 2012.
The company's dominance of the space exemplifies Buffett's love of deep moats, and the stake has paid off well. VRSN hasn't done in the past year, down 3% versus the S&P 500's 18%. But it has raced ahead by 421% since the start of 2013, which is a little less than double the S&P 500's 225% total return.
VRSN also is a teachable example of how stocks aren't good or bad in a bubble. One investor's brilliant purchase often is, depending on timing, another investor's biggest failure.
Stanley Druckenmiller, a famed former hedge fund manager, didn't have nearly as much luck with Verisign. Druckenmiller made a $200 million short on tech stocks in early 1999 while investing for George Soros' Quantum Fund, but lost $600 million in the trade. He then tried to win it back via a big $6 billion buy-in of tech stocks including Verisign ... but he lost $3 billion in six weeks as VRSN and several other recent purchases flopped, making it one of the "smart money's" worst stock calls of all time.
Berkshire Hathaway currently is the largest institutional investor in VRSN shares. It owns a little less than 13 million shares, giving it 11.2% control in the company.
#13: General Motors
- Shares held: 72,500,000
- Holding value: $3,018,899,000
- Percent of portfolio: 1.12%
Warren Buffett finally took a few profits from one of his favorite American brands.
Berkshire first took a stake in General Motors (GM, $53.46), the world's fourth-largest auto manufacturer by production, in early 2012. And Buffett must've seen something he liked. He continued to build his position in 2018, 2019, and during the third quarter of 2020.
But in the fourth quarter, the Oracle peeled back 7.5 million shares to reduce his position by about 9%.
Who can blame him? After the stock was peppered in the midst of the pandemic, shares recuperated nicely and finished the year with a nearly 14% gain.
Buffett's remaining stake of 72.5 million shares has done quite well since then, given GM's 29% gains year-to-date in 2021. And despite the share sale, Berkshire remains the fifth-largest investor in General Motors at 5.1% of all outstanding shares.
GM has always looked like a classic Buffett value bet. General Motors is an iconic American brand and a play on the long-term expansion of the U.S. economy. But more recently, it has hitched its wagon to more growth-oriented trends, unveiling several electric vehicles and pledging to have an all-EV lineup by 2035.
#12: Bank of New York Mellon
- Shares held: 72,357,453
- Holding value: $3,070,849,000
- Percent of portfolio: 1.14%
Bank of New York Mellon (BK, $42.75) truly stands apart from the back.
Warren Buffett has been an admirer of BNY Mellon for some time, and despite his dwindling love for banks, he has largely left his BK stake alone. He did trim the position a little in Q2 2020, but that's nothing compared to the heavy-handed haircuts that Berkshire's other bank holdings have suffered over the past few quarters.
Bank of New York Mellon is a custodian bank that holds assets for institutional clients and provides back-end accounting services. Its roots actually go all the way back to 1784, when Bank of New York was founded by a group including Alexander Hamilton and Aaron Burr. Today, BK is the nation's 10th-largest bank by assets, according to data from the Federal Reserve.
Berkshire Hathaway first took a position in BK back during Q3 2010, when it paid an estimated average price of $43.90. Since then, Berkshire Hathaway has become the bank's largest investor at 8.2% of shares. (Vanguard is No. 2 at 7.2%.)
#11: Charter Communications
- Shares held: 5,213,461
- Holding value: $3,448,965,000
- Percent of portfolio: 1.28%
Charter Communications (CHTR, $618.47) markets cable TV, internet, telephone and other services under the Spectrum brand, which is America's second-largest cable operator behind Comcast (CMCSA). It greatly expanded its reach in 2016 when it acquired Time Warner Cable and sister company Bright House Networks.
And it's also yet another Berkshire Hathaway portfolio holding with a John Malone connection – albeit a small one now. Malone served on the telecom and media company's board of directors from 2013 until 2018, when he stepped down to concentrate his focus on a smaller group of companies. (He does remain a director emeritus, however.)
Buffett entered CHTR in the second quarter of 2014, but he has seemingly lost his love for the telecom company in recent years. His position has been trimmed down from 9.4 million shares in early 2017 to just 5.2 million shares as of Berkshire's most recent 13F, including a 210,000-share reduction in Q2 2020.
Charter remains a decent position in the Berkshire Hathaway portfolio, at 1.3% of its equity assets.
#10: DaVita
- Shares held: 36,095,570
- Holding value: $3,789,673,894
- Percent of portfolio: 1.40%
DaVita (DVA, $104.18) was a largely undisturbed holding in the Berkshire Hathaway equity portfolio, at least up until in 2020. Then Buffett snipped 1% of his stake in the kidney care provider and dialysis center operator in Q1 2020. He cut it by another 5% in Q3.
That said, perhaps the cutting is done for now, as Buffett left his DVA shares alone during 2020's final quarter.
DaVita serves patients via more than 3,000 dialysis centers in the U.S. and nine other countries. Aging baby boomers and a graying population in many developed markets should provide a strong, secular tailwind.
Berkshire disclosed its initial position in DaVita during 2012's first quarter. Given that DVA was a large position of Ted Weschler's Peninsula Capital in his pre-Berkshire days, it wasn't unreasonable to assume that it was his pick. Weschler confirmed as much in 2014.
DaVita's shares have underperformed the S&P 500 by roughly 100 percentage points since Q1 2012, so it's not terribly surprising that Berkshire is slowly unwinding its stake.
For now, Buffett is DaVita's largest shareholder by a country mile. Its stake of 36.1 million shares represents roughly a third of the company's shares outstanding. And DVA remains a top-10 holding in the Berkshire Hathaway equity portfolio.
#9: Chevron (NEW POSITION)
- Shares held: 48,498,965
- Holding value: $4,095,738,000
- Percent of portfolio: 1.52%
Chevron (CVX, $93.13), the only energy stock left in the Dow Jones Industrial Average after Exxon Mobil (XOM) was removed in 2020, is another blue-chip dividend payer that's right in Warren Buffett's wheelhouse.
Berkshire Hathaway initiated a position of more than 48 million shares in the fourth quarter valued at $4.1 billion. Although energy prices aren't expected to make huge moves in the year ahead, the outlook for oil and gas is much improved and should only get better as the global economy recovers from the depths of the pandemic.
Indeed, CVX was able to take advantage of the worst of the industry's woes in July 2020 by acquiring Noble Energy in a $5 billion all-stock transaction. The company's scale, asset quality and reserves make it one of the healthiest players in an industry where a lot of players are on injured reserve.
And then there's the dividend, which is both generous in today's low-yield world and about as steady as they come. A slew of oil and gas companies were forced to slash or suspend their dividends last year, but not CVX. Indeed, it has raised the payout for 33 straight years, and management says it will protect the dividend at all costs.
With 2.5% of CVX's shares outstanding, Berkshire becomes the energy giant's fifth-largest shareholder.
#8: U.S. Bancorp
- Shares held: 131,137,998
- Holding value: $6,109,721,000
- Percent of portfolio: 2.07%
U.S. Bancorp (USB, $48.65) is the nation's fifth-largest bank by assets and America's biggest regional bank. It'a also one of the oldest Buffett stocks in the Berkshire Hathaway portfolio; the Oracle of Omaha initiated his position in the first quarter of 2006.
Buffett is notoriously tight-lipped about U.S. Bancorp, but he has generally been more patient with USB than his other bank holdings. Berkshire did scraped away a little of its position in 2020, including a 0.2% trimming in Q2, and then another 0.6% in Q4. But that that stands in stark contrast to what Buffett has done to the likes of WFC and PNC Financial Services (PNC).
USB shareholders no doubt appreciate that stability. Berkshire's 8.7% stake makes it the largest institutional shareholder, ahead of Vanguard (7.1%) and BlackRock (6.2%).
#7: Moody's
- Shares held: 24,669,778
- Holding value: $7,160,156,000
- Percent of portfolio: 2.65%
Moody's (MCO, $280.35) is a business and financial services firm best known for its Moody's Investors Service credit rating arm – one of the three major American business credit ratings agencies alongside Standard & Poor's and Fitch Ratings. It also offers financial analysis technology via Moody's Analytics.
MCO is a longtime, significant holding in the Berkshire Hathaway portfolio – and an ironic one to boot.
"Uncle Warren" first dipped his toe in during the first quarter of 2001, and he has been content with his investment of late, leaving his 24.7 million-share stake unchanged over the past couple of years.
The funny thing about Berkshire's holding in Moody's is that Buffett said back in 2010 that "Our job is to rate credit ourselves. We do not outsource that to ratings agencies." Yet Berkshire Hathaway is the largest institutional holder of MCO, owning 13.1% of the financial firm. (Vanguard is a distant second at 7.3%.)
The holding is meaningful on Berkshire's end, too. At w.7%, Moody's is a top-10 Buffett stock.
#6: Verizon (NEW POSITION)
- Shares held: 146,716,496
- Holding value: $8,619,594,000
- Percent of portfolio: 3.19%
Verizon (VZ, $54.15), the only telecommunications company in the Dow Jones Industrial Average, is a beloved staple of long-term dividend investors everywhere. That's why it looks so at home in Berkshire Hathaway's portfolio.
Berkshire and Buffett initiated a brand-new stake in VZ in Q4, picking up almost 146.7 million shares valued at $8.69 billion. In one fell swoop, the telco accounts for a sizable 3.2% of Berkshire's total equity portfolio value.
The move also makes Buffett the fourth-largest Verizon shareholder. It's 3.5% ownership stake leaves it behind only Vanguard, BlackRock and State Street Global Advisors.
Bulls like Verizon for both its growth prospects in the era of 5G networking, its defensive characteristics and the reliable income stream it delivers to investors.
"With a safe dividend yield and low leverage, we believe the market favors Verizon's 5G strategy and simpler story," say Raymond James equity research analysts. "Whether we are in an expansion or a contraction, consumers' internet and mobile plans may be the last thing they're willing to give up when times get tough."
#5: Kraft Heinz
- Shares held: 325,634,818
- Holding value: $11,286,503,000
- Percent of portfolio: 4.18%
Kraft Heinz (KHC, $35.36) has finally given Warren Buffett something to smile about, returning 39% over the past year to more than double up the broader market.
That likely has helped stay the hand of Warren Buffett, who likely still regrets his participation in what was one of his biggest deals of the past decade.
Buffett was one of the driving forces behind the 2015 merger of packaged-food giant Kraft and ketchup purveyor Heinz to create Kraft Heinz. It's Berkshire's sixth-largest stock investment with a market value of $8.1 billion.
However, Berkshire Hathaway recorded a $3 billion non-cash loss from an impairment of intangible assets in 2018, "arising almost entirely from our equity interest in Kraft Heinz," Buffett wrote in his 2019 letter to shareholders. In early 2019, KHC wrote down the value of its brands by nearly $15 billion. In 2020, Fitch downgraded the company's debt to junk status. Its second-quarter earnings beat expectations, but Kraft still had to record yet another $2.9 billion in impairments.
Things have looked better for Kraft since then, beating earnings expectations in both Q3 and Q4. That has helped the firm's performance in the short-term, but it still has a lot of catching-up to do to shed its "dud" status in the Berkshire Hathaway equity portfolio.
"I was wrong (about KHC)," Buffett flatly admitted on CNBC in 2019. Buffett says he overpaid, and it's difficult to disagree. Even including dividends, Kraft's shares have lost nearly 37% of their value on total-return basis since Sept. 30, 2015.
Berkshire Hathaway remains the company's second-largest shareholder with a 26.6% stake. Private investment firm 3G Capital – who teamed up with Berkshire in 2013 to purchase H.J. Heinz – is tops at 44.3%.
#4: American Express
- Shares held: 151,610,700
- Holding value: $18,331,249,000
- Percent of portfolio: 6.79%
American Express (AXP, $130.68) continues to endure as one of Warren Buffett's favorite investments.
Buffett likes to say this his preferred holding period is "forever," and AmEx is one of the premier examples. Berkshire entered its initial stake in the credit card company in 1963, when a struggling AmEx badly needed capital. Buffett obliged, getting favorable terms on his investment. He has played the role of white knight many times over the years, including during the 2008 financial crisis, as a means to get stakes in good companies at a discount. (Think: Goldman Sachs and Bank of America.)
No one would've been surprised if Buffett had trimmed his AXP position sometime during the course of 2020. After all, Berkshire dumped financial stocks all year, and he even trimmed his stakes in payments processors during Q2.
American Express is both. And yet the position remained fully intact across the year.
Berkshire Hathaway, which owns 18.8% of American Express' shares outstanding, is by far the company's largest shareholder. No. 2 Vanguard owns 6.0%.
Buffett praised the power of AmEx's brand at Berkshire's 2019 annual meeting. "It's a fantastic story, and I'm glad we own 18% of it," he said. Of course he's glad: A roughly 1,260% total return over the past quarter-century would make most investors glow.
#3: Coca-Cola
- Shares held: 400,000,000
- Holding value: $21,935,999,000
- Percent of portfolio: 8.13%
Buffett, an unabashed fan of Cherry Coke, started investing in Coca-Cola (KO, $50.27) stock soon after the stock market crash of 1987. In his 1988 letter to Berkshire shareholders, Buffett said he expected to hold on to the stock "for a long time."
Three decades later, he has proven true to his word. Berkshire is KO's largest shareholder with 9.3% of its shares outstanding.
Coca-Cola made a brief appearance as a component of the Dow Jones Industrial Average in the 1930s. Shares were added back to the Dow in 1987, and they've remained a stalwart member ever since.
While Coca-Cola's stock performance hasn't impressed – its 119% total return over the past decade is well behind the S&P 500's 264% return – it has been an income investor's dream. The beverage maker has increased its dividend annually for 58 years.
#2: Bank of America
- Shares held: 1,010,100,606
- Holding value: $30,616,150,000
- Percent of portfolio: 11.35%
Buffett spent most of 2020 hacking and slashing at his various bank-stock holdings. But he remained as committed as ever to Bank of America (BAC, $34.27).
Buffett's interest in BAC dates back to 2011, when he swooped in to shore up the firm's finances in the wake of the Great Recession. In exchange for investing $5 billion in the firm, Berkshire received preferred stock yielding 6% and warrants giving Berkshire the right to purchase BofA common stock at a steep discount. (The Oracle of Omaha exercised those warrants in 2017, netting a $12 billion profit in the process.)
Warren Buffett let go of 2.2 million BAC shares in Q4 2019, but that represented a mere 0.2% reduction. And while he cut heavily into various bank holdings in 2020, he actually added to Berkshire's already large position in Q3 by snapping up more than 85 million shares.
The stake in BAC, worth 30.6 billion, accounts for 11.4% of the holding company's total portfolio value. Meanwhile, Berkshire is Bank of America's largest shareholder, at 11.7% of its shares outstanding.
#1: Apple
- Shares held: 887,135,554
- Holding value: $117,714,016,000
- Percent of portfolio: 43.62%
Warren Buffett finally took a bite out of Apple (AAPL, $133.19).
Berkshire Hathaway sold off 57.2 million shares, or 6% of its AAPL stake, during the final quarter of 2020. But that likely had little to do with a lack of faith in the iPhone maker.
Call it a hunch.
"I don’t think of Apple as a stock," Buffett has said about Apple. "I think of it as our third business."
It might as well be. Even after its Q4 share sales, the tech giant still represents 44% of assets in the Berkshire Hathaway equity portfolio. And Berkshire remains Apple's third largest investor with a 944 million-share stake representing about 5.1% of all shares outstanding. Only Vanguard and BlackRock – giants of the passively managed index fund universe – hold more Apple stock.
The Oracle of Omaha has only occasionally dabbled in technology stocks. But he bought Apple with two fists, and he's more than happy to discuss his ardor for AAPL. As he has said more than once on CNBC, he loves the power of Apple's brand and its ecosystem of products (such as the iPhone and iPad) and services (such as Apple Pay and iTunes).
"It's probably the best business I know in the world," Buffett said a year ago. "And that is a bigger commitment that we have in any business except insurance and the railroad."
It's likely that Buffett was merely taking profits on what has been an exceptionally fruitful investment. AAPL shares have returned 432% since the end of Q1 2016, when Berkshire initiated its stake. That's roughly four times better than the broader market.
