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.
Some of Warren Buffett's stocks have been around for a lifetime. American Express has been a part of the Berkshire Hathaway (BRK.B) equity portfolio since the 1960s. The "Oracle of Omaha" has carried Coca-Cola since 1987.
But if you're looking for the real engines behind Berkshire Hathaway's investment arm, you'll want to look at its more recent pick-ups: stocks like Apple, Amazon.com and even lesser-known StoneCo.
The Berkshire Hathaway portfolio, like many others, took a nasty spill during 2020's first quarter. Its many investments lost a collective $54.5 billion during Q1, thanks in large part to weakness in financials and airlines, the latter of which Buffett exited en masse. But Berkshire's equities bounced back in the second quarter, gaining $34.5 billion, thanks to great performances by the aforementioned growth names, among others.
What has Uncle Warren been up to lately? Actually, quite a lot. You can see the full list of Warren Buffett's buys and sells for the second quarter here, but one highlight is that he exited several positions. Berkshire Hathaway held positions in 41 separate companies (across 44 different stocks thanks to firms with multiple share classes) as of the end of the second quarter, down significantly from 48 as of the end of the first quarter. That's according to its most recent 13F regulatory filing, submitted to the Securities and Exchange Commission on Aug. 14, as well as additional filings in July and August.
But the portfolio of "Buffett stocks" isn't as diversified as the number might suggest. Some are new positions so small they equate to a pinky toe in the water. Other holdings are immaterial leftovers from earlier bets that the Oracle of Omaha has mostly exited, just not completely.
Still, 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 "Uncle Warren" 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 Aug. 14. Stocks are listed in reverse order of their weight in the Berkshire Hathaway equity portfolio. Sources: Berkshire Hathaway’s SEC Form 13F filed Aug. 14, 2020, for the reporting period ended June 30, 2020; Forms 4, 4/A and and SC 13G/A between July 1 and Aug. 14, 2020; and WhaleWisdom.
United Parcel Service
- Shares held: 59,400
- Holding value: $6,604,000
- Percent of portfolio: 0.003%
United Parcel Service (UPS, $160.74) survives yet again.
The world's biggest package delivery company remains among Warren Buffett's stocks after yet another round of culling that claimed four airline stocks, Occidental Petroleum (OXY), Goldman Sachs (GS) and Restaurant Brands International (QSR), the parent of Burger King, Tim Hortons and Popeyes.
Buffett initiated his position in UPS stock during Q1 2006, purchasing 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.
Indeed, UPS remains the most meager of Buffett stocks. At fewer than 60,000 shares, this is a rump position, leftovers, an odd lot. But it has been a rewarding position of late, jumping 19% during the second quarter and extending its gains another 44% since the start of July.
While Buffett occasionally can be fairly chatty about some of his more notable stock picks, he typically doesn't comment on BRK.B's buys and sells. There's no mention of United Parcel Service in CNBC's indispensable Warren Buffett archive.
One clue as to why UPS never became a bigger part of Berkshire Hathaway's holdings might be its long-term underperformance. However, UPS's hot run has narrowed the gap between it and the S&P 500. Since March 31, 2006, UPS shares have delivered a total return (price plus dividends) of 208% – about 44 percentage points worse than the S&P 500 Index's total return in that same time frame. But a mere quarter ago, the difference was 125 percentage points.
SPDR S&P 500 Trust ETF
- Shares held: 39,400
- Holding value: $12,149,000
- Percent of portfolio: 0.01%
For years, Warren Buffett has told investors that one of the best ways to invest is to simply buy an S&P 500 index fund and keep a little something in Treasuries to help you sleep well in down markets. It's great advice; it just seemed a bit hypocritical coming from one of the market's most celebrated stock pickers.
However, in 2020's final innings, Buffett finally took his own medicine and bought not one but two S&P 500-tracking exchange-traded funds (ETFs).
The first of those is the SPDR S&P 500 Trust ETF (SPY, $336.84), which tracks the 500 components of the S&P 500 Index. It does so for a song, too, costing just 0.095% annually, which comes to just $9.50 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 still makes little sense for a guy who's known for beating the S&P 500 handily over the long-term to buy a fund such as the SPY. After all, an ETF merely tracks an index, and will actually underperform slightly once costs are included. But it's possible that Buffett really wanted to drive his longstanding point home.
Vanguard S&P 500 ETF
- Shares held: 43,000
- Holding value: $12,187,000
- Percent of portfolio: 0.01%
The other S&P 500 tracker Buffett bought in Q4 2019 was the Vanguard S&P 500 ETF (VOO, $309.51), which essentially provides the same exposure as the SPY, just cheaper. Both funds track the S&P 500's components, and both funds are extremely liquid. The VOO just has a lighter fee (typical of Vanguard ETFs) at 0.03% annually, versus the SPY's 0.095%.
If size is any indication, however, Berkshire's investments in the two tracking funds are largely symbolic. Each stake represents roughly one one-hundredth of a percent of Berkshire Hathaway's equity holdings.
- Shares held: 578,000
- Holding value: $29,553,000
- Percent of portfolio: 0.01%
Warren Buffett has never seemed all that enamored with Mondelez (MDLZ, $56.12), whose brands include Oreo cookies and Triscuit crackers. But his tiny holding did what was expected of it, outperforming during the market downturn while putting up more modest returns once stocks got back into gear. MDLZ has delivered a total return of about 3% year-to-date, trailing the broader market by less than 3 percentage points.
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.
Nothing to see here, folks.
Liberty Latin America
- Shares held (Class A / Class C): 2,630,792 / 1,284,020
- Holding value (Class A / Class C): $25,572,000 / $12,121,000
- 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, $9.76) and Liberty Latin America Class C (LILAK, $9.64) shares are the smallest of those.
The position was filed down a little bit during the first quarter of 2020, as Buffett shed roughly 84,000 Class A shares. But Berkshire left the position alone in Q2.
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.
Malone, a pioneer in the telecom industry and a multibillionaire himself, has created outsize value for shareholders over his long career. And as you'll see, Berkshire has several other investments in Malone-backed enterprises ... and recently pared back most of them.
Nonetheless, the initial appeal to Buffett and his portfolio managers is plain to understand: Game knows game.
Procter & Gamble
- Shares held: 315,400
- Holding value: $37,712,000
- Percent of portfolio: 0.02%
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, Berkshire was smart not to eliminate it yet. P&G is up almost 10% year-to-date, and was one of Buffett's best holdings of the bear market.
Johnson & Johnson
- Shares held: 327,100
- Holding value: $46,000,000
- Percent of portfolio: 0.02%
Berkshire's interest in Johnson & Johnson (JNJ, $148.24) peaked more than a decade ago. Now, like fellow defensive stock P&G, JNJ has fallen out of favor with Buffett and represents nothing more than a token holding.
You can blame the diversified health-care giant's history of headline-grabbing faceplants. The health care 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 $46 million), which represents roughly one fiftieth of shares outstanding. This holding could disappear at any time, and it'd hardly be noticed.
- Shares held: 643,022
- Holding value: $172,041,000
- Percent of portfolio: 0.09%
Berkshire Hathaway already had a few health care holdings heading into the final quarter of 2019, and Buffett added to that number with his Q4 entry into biotechnology giant Biogen (BIIB, $289.45). The roughly 640,000-share stake is worth more than $170 million at present.
That's hardly a huge stake, as far as Buffett stocks go. The holdings account for a little 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 health care 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. In July, the company completed its submission to seek out FDA approval for aducanumab sometime early this year.
While Buffett is known for his value tilt, some of his stocks are bound to fall out of value territory over time. But BIIB still trades at less than 9 times analysts' expectations for next year's earnings. Better still, Biogen also reliably generates several billion dollars each year in free cash flow.
- Shares held: 50,000,000
- Holding value: $293,500,00
- Percent of portfolio: 0.15%
Sirius XM (SIRI, $5.98) – a company that reaches more than 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. The Oracle of Omaha then trimmed his position by another 3.9 million shares, or about 2% of Berkshire's stake, in Q1 2020.
Berkshire Hathaway really took out the hatchet during this year'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%. But that still makes Buffett the fourth-largest owner of SIRI stock, well behind Liberty Global's 72% stake.
- Shares held: 19,201,525
- Holding value: $323,738,000
- Percent of portfolio: 0.16%
Suncor Energy (SU, $17.00) is the lone energy position in the Berkshire Hathaway portfolio. Fortunately, after trimming his position a little in Q1, the holding company added to it in a big way during Q2.
Buffett added 4.25 million shares to the portfolio during the second quarter to bring his stake to 19.2 million, or about $324 million.
It's still a small holding, representing about 0.16% 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 1.3% of its shares outstanding, making Buffett the 13th-largest owner of SU shares.
If this bet on Suncor sounds familiar, it should: When Buffett entered SU during the fourth quarter of 2018, that marked the second time Berkshire Hathaway has 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.
- Shares held: 1,708,348
- Holding value: $425,208,00
- Percent of portfolio: 0.21%
Warren Buffett, who 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 (RH, $313.97), then made a considerable addition to his stake to close out the year.
RH, formerly known as Restoration Hardware, operates 107 retail and outlet stores across the U.S. and Canada. It also owns Waterworks, a high-end bath-and-kitchen retailer with 15 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. Indeed, at the end of March, RH boasted "record results across every key metric of our business." And while the coronavirus outbreak forced RH to close stores, furlough employees and slash spending, its relative resilience has helped shares rebound with gusto. RH stock is now up 47% in 2020.
Buffett typically doesn't comment on Berkshire Hathaway's holdings, and that's true for RH, so it's not certain exactly what attracted the Oracle of Omaha. It is possible this was a move made by Buffett lieutenant Ted Weschler or Todd Combs. But 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 is now the fourth-largest investor in the home retailer by virtue of owning about 8.9% of all RH shares outstanding.
- Shares held: 20,128,000
- Holding value: $446,036,000
- Percent of portfolio: 0.22%
Synchrony Financial (SYF, $24.93) 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 lost more than 17% of its value, versus a 48% positive total return for the S&P 500 during that time.
Buffett trimmed 3% of his stake in Q1 but left it alone in the second quarter. He now owns 3.4% of Synchrony Financial's shares outstanding, which makes him the firm's seventh-largest shareholder.
- Shares held: 4,536,174
- Holding value: $471,626,000
- Percent of portfolio: 0.23%
Warren Buffett was a fan of M&T Bank (MTB, $109.21) for a very long time. Indeed, MTB had been a member in good standing of Berkshire Hathaway's equity portfolio since 2001.
But his affection for MTB, like other financial stocks, has waned in 2020.
M&T Bank is a regional bank that operates more than 690 branches in nine states, including New York, Maryland and New Jersey, as well as Washington, D.C., and it has been profitable year after year for decades. It also has been a reliable dividend payer.
Buffett has a soft spot for well-run, unassuming businesses. And he frequently cites the importance of management talent when it comes to deciding where to invest. He certainly was a fan of M&T Bank's late CEO. In 2011, Buffett recommended that Berkshire Hathaway shareholders read M&T's annual reports, which were written by Robert Wilmers, chairman and CEO from 1983 until his death in 2017. "Bob is a very smart guy and he has a lot of good observations," Buffett said.
Still, Berkshire Hathaway jettisoned roughly 850,000 shares, or 15% of its position, during the second quarter. BRK.B remains a big holder of MTB, though; with 3.5% of shares outstanding, Berkshire is the bank's seventh-largest shareholder.
- Shares held: 6,353,727
- Holding value: $471,636,000
- Percent of portfolio: 0.23%
Globe Life (GL, $85.48) – known as Torchmark up until 2019 – is a small holding for Berkshire Hathaway, but a natural Buffett stock. After all, it's a life and health insurance company, and various wholly owned insurance firms form the core of BRK.B's holdings.
Berkshire Hathaway has owned shares in Globe Life/Torchmark since early 2001. And while it's a boring company, it has quietly been a very good stock pick. Including dividends, GL has generated a total return of 497% since March 31, 2001, easily outdoing the S&P 500's 327.5% performance with dividends included.
BRK.B owns 6.0% of Globe Life's shares outstanding, which makes it the firm's third-largest shareholder after Vanguard and BlackRock (BLK).
- Shares held: 42,789,295
- Holding value: $527,592,000
- Percent of portfolio: 0.26%
Berkshire Hathaway's move into Teva Pharmaceutical (TEVA, $11.50) 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 look cheaper now. Shares are off 32% since the start of Q2 2018 and trade at just 4.6 times analysts' estimates for future earnings, which is a fraction of the S&P 500's forward P/E. But Teva's shares have been a pleasant surprise in 2020, gaining 17% year-to-date.
Berkshire trimmed its stake by 1% by Q1 and stayed pat in Q2, leaving it with 3.9% ownership of the company. That makes it Teva's fourth-largest shareholder.
- Shares held: 14,166,748
- Holding value: $549,103,000
- Percent of portfolio: 0.27%
Berkshire Hathaway announced in October 2018 that it would take a stake in StoneCo (STNE, $48.21) as the Brazilian financial technology company went public. 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.
StoneCo provides software and hardware for companies to facilitate credit- and debit-card payments, and it's one of the "growthiest" Warren Buffett stocks without a doubt. Its fiscal 2019 client base grew 84% year-over-year. Revenues jumped 63.1% to 2.58 billion Brazilian reals ($440 million), while adjusted net income rocketed 150% higher to 804.2 million reals ($137 million).
While not necessarily in the Buffett stocks blueprint, StoneCo 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.
Digital payments look even better in the midst of COVID-19, and that has helped shares recover in a big way. STNE is up 20% YTD, including a roughly 120% run since the end of the first quarter.
Berkshire holds 5.1% of the company's shares outstanding, making it StoneCo's sixth-largest shareholder.
Axalta Coating Systems
- Shares held: 24,070,000
- Holding value: $542,779,000
- Percent of portfolio: 0.27%
Axalta Coating Systems (AXTA, $23.90), 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 companies.
Axalta 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 is Axalta's largest investor, holding 10.2% of the shares outstanding.
PNC Financial Services
- Shares held: 5,350,586
- Holding value: $562,935,000
- Percent of portfolio: 0.28%
PNC Financial Services (PNC, $111.75) looked like it was gaining favor in the Berkshire Hathaway portfolio. Warren Buffett began investing in PNC, the nation's sixth-largest bank by assets and second-largest regional lender, during the third quarter of 2018. Buffett upped Berkshire Hathaway's stake by another 4% in Q1 2019. And he added another 6%, or 526,930 shares, to start this year.
But Buffett sold off heavily from his bank positions during the second quarter, and that included lopping off 3.9 million shares, or about 41%, from his PNC position.
That dropped his holding company well out of PNC's top 10 holders with 1.3% of the bank's shares outstanding.
Buffett had long been comfortable with investing in the banking business. At the 1995 Berkshire Hathaway annual meeting, he said the industry "falls within our circle of competence to evaluate." But 2020's pain in the financial sector forced Buffett's hand.
- Shares held: 20,918,701
- Holding value: $563,550,000
- Percent of portfolio: 0.28%
Warren Buffett is the farthest thing from a gold bug. "It doesn't do anything but sit there and look at you," he's been known to say. But holding gold as an asset class isn't the same thing as investing in a gold miner such as Barrick Gold (GOLD, $26.99).
True, mining stocks are sensitive to the price of whatever commodity they are digging out of the ground. But at least they produce something, as in cash flow. In the case of Barrick, it even pays a small dividend.
Besides, Barrick has more going for it than gold. It also mines copper, which is used in just about everything. As such, it's a bet on a return to global growth.
Buffett picked up 20.9 million shares in Barrick in the second quarter. The stake has a value of $563.6 million. The Oracle of Omaha typically doesn't comment on his reasons for buying or selling a stock, but let's hope he makes an exception for this one. It would be fascinating to hear his investment thesis for a stock that's so sensitive to the price of the so-called barbarous relic.
- Shares held (Class A / Class C): 19,310,000 / 7,346,968
- Holding value (Class A / Class C): $422,117,000 / $158,033,000
- Percent of portfolio (Total): 0.29%
Liberty Global Class A (LBTYA, $22.20) and Liberty Global Class C (LBTYK, $21.54) 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).
Berkshire is the second-largest holder of LBTYA at 3.2% of shares outstanding, and the No. 11 holder of LBTYK at 1.2%.
- Shares held: 24,415,168
- Holding value: $581,325,000
- Percent of portfolio: 0.29%
Berkshire's position in Store Capital (STOR, $25.26), 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. 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.
BRK.B now owns 10% of shares outstanding, making it Store Capital's second-largest shareholder after Vanguard and BlackRock.
- Shares held: 21,940,079
- Holding value: $742,672,000
- Percent of portfolio: 0.37%
Berkshire Hathaway's stake of supermarket titan Kroger (KR, $35.39), entered in Q4 2019, was a little bit of a head-scratcher. Many long-term investors have soured on traditional supermarket chains in a world where Walmart (WMT), Amazon.com and other large firms are vying to rule the grocery space.
It also was something of a reversal from Berkshire's other new positions, which have been a little more forward-looking. Kroger is an old-economy value play, compared to tech and biotech buys such as Apple, Amazon, StoneCo and Biogen.
Nonetheless, in 2019's final quarter, Buffett initiated a 18.9 million-share position, then added another 3 million shares (15%) to give him nearly 22 million shares. That makes Berkshire the sixth-largest investor in Kroger at 2.8% of shares outstanding. Admittedly, it's not a home-run swing, at just 0.37% of BRK.B's total equity portfolio. But Kroger's 25% returns year-to-date have no doubt been welcome as so many other Buffett stocks have floundered.
KR is positioned to give the likes of Amazon and Walmart a fight going forward, too. The company has roughly 2,760 retail food stores operating under such banners as Dillons, Ralph's, Harris Teeter and its namesake Kroger, as well as 1,537 gas stations and even 256 jewelry stores under banners including Fred Meyer Jewelers and Littman Jewelers. This is a high-margin business with good cash flow. In fact, it's one of the five largest retailers in the world.
- Shares held: 4,333,363
- Holding value: $1,313,919,000
- Percent of portfolio: 0.65%
Costco (COST, $336.28) joined the ranks of the Buffett stocks a long time back – the first quarter of 2001, to be precise. It's not a particularly large holding, at 0.65% of the Berkshire Hathaway portfolio, but it seems to be a cherished one.
And unlike many Buffett stocks, the Oracle is happy to talk about Costco at length.
"Here (Kraft Heinz is), 100 years plus, tons of advertising, built into people's habits and everything else," Buffett told CNBC in a February 2019 interview. "And now, (Costco's) Kirkland, a private-label brand, comes along and with only 250 or so outlets, does 50% more business than all the Kraft Heinz brands."
Indeed, Costco's Kirkland store-branded products are one of the warehouse retailer's biggest draws. Revenues from the Kirkland label totaled $39 billion in 2018 – more than 27% of Costco's overall annual sales, and about 50% greater than Kraft Heinz's total sales across 2018.
In 2020, Costco has stood out with a 15% total return year-to-date, thanks in large part to the company's "essential" status; Americans have swarmed Costco locations during the outbreak to stockpile necessities so they can hunker down at home.
Berkshire's 4.3 million shares represent a roughly 1% equity stake in the company – not unsubstantial, but well outside Costco's top 10 institutional stakes.
- Shares held: 4,564,756
- Holding value: $1,349,798,000
- Percent of portfolio: 0.70%
Warren Buffett gives credit where credit is due. While Berkshire Hathaway does indeed own Mastercard (MA, $326.80), he has nodded to his portfolio managers Todd Combs and Ted Weschler, and said he wishes he had pulled the trigger on the opportunity earlier.
"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 926 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 1,270%, 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.
- Shares held: 533,300
- Holding value: $1,471,279,000
- Percent of portfolio: 0.73%
Amazon.com (AMZN, $3,148.02) has been one of the most electric blue chips of 2020, 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 66% since the end of Q2 2019, versus just 17% 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 still is an insignificant shareholder, however, boasting about 0.1% of Amazon's shares outstanding. Interestingly, Buffett marginally reduced the position by 4,000 shares in Q1 2020.
- Shares held: 74,681,000
- Holding value: $1,929,278,000
- Percent of portfolio: 0.93%
Warren Buffett first took a stake in General Motors (GM, $27.86), the world's fourth-largest auto manufacturer by production, in early 2012. And he must've seen something he liked. He upped Berkshire Hathaway's holdings during the fourth quarter of 2018, when he increased his position by 37%, then tacked on another 4% to his stake during 2019's final quarter.
That brought his total to a cool 75 million shares on the dot, but he sold off about 319,000 shares during 2020's first quarter. Nonetheless, he still owns 5.1% of the automaker's shares outstanding, making Berkshire the company's sixth-largest investor.
GM has always looked like a classic Buffett value bet. General Motors is an iconic American brand and a play on the long-term growth of the U.S. economy. Buffett also likes CEO Mary Barra, singing her praise on multiple occasions. At one point, he said, "Mary is as strong as they come. She is as good as I've seen."
But General Motors hasn't returned the favor. Berkshire paid an estimated average price per share of $31.82 when he initiated his position during the first quarter of 2012. Shares now trade in the high $20s, widely underperforming the market in that same time. Even worse: Buffett isn't even collecting dividend income on his position anymore, as GM suspended its dividend in late April.
- Shares held: 9,987,460
- Holding value: $1,929,278,000
- Percent of portfolio: 0.95%
Just like with Mastercard, Warren Buffett also took a little off the top with Visa (V, $196.64) during the second quarter.
Visa 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 30.7% since Sept. 30, 2011. It's also a dividend-growth machine, ramping up its payout by 150% 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.
It's a modest but not insignificant holding at roughly 1% of Buffett's portfolio. However, Berkshire's half-percent stake in Visa doesn't even put it among the top 25 investors.
Liberty Sirius XM Group
- Shares held (Class A / Class C): 14,860,360 / 43,208,291
- Holding value (Class A / Class C): $512,980,000 / $1,488,525,000
- Percent of portfolio (Total): 0.99%
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, $36.04) and Liberty Sirius XM Group Series C (LSXMK, $35.95) combined. That follows the purchase of 11.8 million C class shares (+37%) in Q2, as well as a small 250,000-share reduction (-1%) in A shares.
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. Combined with his SIRI stake, the Oracle of Omaha holds three different investments in Sirius XM.
- Shares held: 22,208,427
- Holding value: $2,088,925,000
- Percent of portfolio: 1.03%
Berkshire Hathaway treated JPMorgan Chase (JPM, $102.41), the nation's largest bank by assets, much the same way it treated PNC during the second quarter. While Buffett upped his stake several times after entering his position during the third quarter of 2018, he chopped 35.5 million shares, or 61% of the position, last quarter following a 1.8-million share (3%) trim during Q1 2020.
Berkshire still was the sixth-largest shareholder in JPM as of the first quarter's end, but it has since dropped to 18th.
Part of the original attraction for JPMorgan is because of Warren Buffett's professed admiration for CEO Jamie Dimon. The two have partnered with Jeff Bezos, chairman and CEO of Amazon.com, to form a health care initiative intended to improve coverage and lower costs. Dimon and Buffett also have teamed up to decry the practice of giving quarterly profit forecasts, saying "short-termism is hurting the economy."
But banks have fallen out of Uncle Warren's favor, so much of the JPM stake had to go.
- Shares held: 12,815,613
- Holding value: $2,650,654,000
- Percent of portfolio: 1.31%
Berkshire bought Verisign (VRSN, $207.29) – 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 is up nearly 8% in 2020, and it has raced ahead 433% since the start of 2013, well more than doubling the S&P 500's 176% total return.
Just remember: 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 now owns almost 13 million shares in the company, making it the largest institutional investor in Verisign at an 11.1% ownership stake.
- Shares held: 5,213,461
- Holding value: $2,659,074,000
- Percent of portfolio: 1.31%
Charter Communications (CHTR, $604.99) is 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.)
Charter Communications 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.
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.
The move away from Charter meshed with a lousy 2018 for the stock, which lost 15% that year. But his timing in 2019 wasn't great. He continued to cut away at his position during the first and second quarters; CHTR shares finished the year with a 70% return.
Berkshire Hathaway's current stake represents 1.3% of its holdings, and a decent-sized 2.5% ownership in Charter.
Bank of New York Mellon
- Shares held: 72,357,453
- Holding value: $2,796,615,000
- Percent of portfolio: 1.38%
Bank of New York Mellon (BK, $37.53) isn't a household name, but it's a big deal in financial services. And despite a trimming in Q2 2020, Warren Buffett has been a fan for some time, and seems to largely remain one.
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 ninth-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. Bank of New York Mellon wasn't completely spared a haircut during the second quarter, but Warren Buffett's 7.4 million-share sale, at 9% of the stake, was less drastic than his other financial-stock reductions.
In fact, Berkshire Hathaway remains the largest investor at 8.2% of shares. (Vanguard is No. 2 at 7.3%.)
- Shares held: 38,095,570
- Holding value: $3,014,883,000
- Percent of portfolio: 1.49%
Berkshire had left its DaVita (DVA, $82.17) stake alone for years before finally deciding to snip a bit earlier this year. Buffett sold off 470,000 shares, or about 1%, of his stake in the kidney care provider and dialysis center operator during the first 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.
Buffett remains DaVita's largest shareholder, and it's not even close. Its stake of 38.1 million shares represents more than 31% of the company's shares outstanding.
- Shares held: 131,961,832
- Holding value: $4,858,836,000
- Percent of portfolio: 2.40%
U.S. Bancorp (USB, $37.78) 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 USB shares have been a solid pick. The lender has consistently generated the highest returns among the top 10 banks, and it has delivered a total return of 84% since March 31, 2006, versus a 28% gain for the financial sector.
Berkshire Hathaway did very little to USB during the second quarter, shedding a quarter of a million shares representing a fifth of a percent of the overall stake.
- Shares held: 237,582,705
- Holding value: $6,082,118,000
- Percent of portfolio: 3.00%
Warren Buffett clearly is tiring of Wells Fargo (WFC, $25.30) the nation's fourth-largest bank by assets.
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 clean-up process has been slow, and claimed not one but two CEOs. WFC stock, meanwhile, has lagged its peers for quite some time.
Buffett has sold off WFC shares in numerous quarters since the start of 2018. While most of the previous sales appeared to be routine paring on the position to keep it below a regulatory 10% maximum ownership threshold for banks, Buffett dumped more than 55 million shares, or nearly 15% of his position, at the end of last year. And in Q2, he jettisoned 85.6 million shares, or more than a quarter of the remaining stake.
The Berkshire Hathaway portfolio is no longer the largest WFC shareholder as a result. The now 5.8% stake is behind both Vanguard and BlackRock.
- Shares held: 24,669,778
- Holding value: $6,777,528,000
- Percent of portfolio: 3.35%
Moody's (MCO, $281.05) 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 13.2% of the financial firm. (Vanguard is a distant second at 7.5%.)
The holding is meaningful on Berkshire's end, too. At more than 3%, Moody's is a top-10 Buffett stock.
- Shares held: 325,634,818
- Holding value: $10,384,494,000
- Percent of portfolio: 5.13%
Kraft Heinz (KHC, $35.59) has outperformed the market with 14% gains so far in 2020, but Warren Buffett 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. This year, Fitch downgraded the company's debt to junk status. And while its most recent earnings beat expectations, it had to record yet another $2.9 billion in impairments.
In a 2019 interview with CNBC, Buffett said "I was wrong" on KHC. Yup, he says he overpaid. Kraft's shares have lost nearly 40% of their value on total-return basis since Sept. 30, 2015. That includes a 21% plunge last year.
Berkshire Hathaway owns 26.7% of Kraft Heinz, making it the food company's second-largest shareholder, according to data from S&P Global Market Intelligence. Private investment firm 3G Capital – who teamed up with Berkshire in 2013 to purchase H.J. Heinz – is tops at 46.7% after selling off a small amount of its stake in Q1.
- Shares held: 151,610,700
- Holding value: $14,433,339,000
- Percent of portfolio: 7.13%
Buffett likes to say this his preferred holding period is "forever." Look no further than Dow component American Express (AXP, $100.41) to understand just how serious he is about investing for the long haul.
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.)
And Buffett's love for AXP endures. Berkshire dumped stakes in lenders and payments processors alike in Q2; American Express is both, but the Oracle left his AmEx position untouched.
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.
A roughly 1,150% total return over the past quarter-century would make most investors glow.
- Shares held: 400,000,000
- Holding value: $17,871,999,000
- Percent of portfolio: 8.83%
Coca-Cola (KO, $48.45) and American Express are among the most storied and celebrated Berkshire holdings.
Buffett, an unabashed fan of Cherry Coke, started investing in KO 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 136% total return over the past decade is well behind the S&P 500's 285% return – it has been an income investor's dream. The beverage maker has increased its dividend annually for 58 years.
Bank of America
- Shares held: 925,008,600*
- Holding value: $21,968,954,000*
- Percent of portfolio: 10.85%*
It should be clear by now that Buffett is bonkers for bank stocks. And while Bank of America (BAC, $26.47) has struggled this year, the nation's second-largest bank by assets remains the crown jewel of Uncle Warren's financial sector holdings.
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. The remaining stake of 925 million shares sits at roughly $22 billion in worth. Thus, BofA remains a big deal for Berkshire, at nearly 11% of the portfolio. Meanwhile, Berkshire is Bank of America's largest shareholder, at 10.7% of its shares outstanding.
* These numbers do not reflect additional purchases of Bank of America shares during the third quarter. Various SEC filings since the start of July show that Berkshire has bought another $1.7 billion or so in BAC stock.
- Shares held: 245,155,566
- Holding value: $89,432,750,000
- Percent of portfolio: 44.18%
"I don’t think of Apple as a stock. I think of it as our third business."
That's one of the many songs of praise Buffett has belted out for Apple (AAPL, $459.63), which is the undisputed king of the Buffett stocks. In fact, shares in the nearly $2 trillion company now make up nearly half of the Berkshire Hathaway portfolio's value.
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 in February. "And that is a bigger commitment that we have in any business except insurance and the railroad."
Buffett took his first bite in early 2016, and the iPhone maker has since become Berkshire Hathaway's single-largest holding. In fact, despite selling off roughly 3.7 million shares during Q4 2019, Apple accounts for 44% of the total value of Berkshire Hathaway's equity portfolio. You can thank a red-hot run for that; AAPL stock is up 57% in 2020 and is even splitting its stock in August amid a run-up in value.
At more than 245 million shares, BRK.B remains Apple's third-largest investor. The holding company owns 5.7% of all AAPL shares outstanding. Only Vanguard and BlackRock – giants of the passively managed index fund universe – hold more Apple stock.