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 firms such as Snowflake and StoneCo.
The Berkshire Hathaway portfolio, like so many others, has been through quite the roller-coaster ride in 2020. It also has gone through a staggering number of changes. Buffett trimmed or cut 21 stocks from the portfolio during the first quarter, and another 18 in Q2. He owned several airlines at the start of the year; now he holds none. Banks were aces among Buffett stocks to begin 2020; Berkshire spent the first half of the year ditching them.
So, what has "Uncle Warren" been up to lately?
A lot, yet again. You can check out the full list of Warren Buffett's buys and sells for the third quarter here, but two primary trends stand out. For one, Buffett isn't done trimming, especially as it pertains to banks. And yet, the list of Warren Buffett stocks only got longer in Q3, as he entered six new positions during the quarter – several of them larger than at least half of his existing stakes! That's according to its most recent 13F regulatory filing, submitted to the Securities and Exchange Commission on Nov. 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 Nov. 16. Stocks are listed in reverse order of their weight in the Berkshire Hathaway equity portfolio. Sources: Berkshire Hathaway’s SEC Form 13F filed Nov. 16, 2020, for the reporting period ended Sept. 30, 2020, and WhaleWisdom.
United Parcel Service
- Shares held: 59,400
- Holding value: $9,898,000
- Percent of portfolio: 0.004%
United Parcel Service (UPS, $168.44) 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 survived yet another round of culling during the third quarter. But perhaps that's because Uncle Warren doesn't even notice it anymore.
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.
Buffett has been characteristically quiet about the UPS holding. There's no mention of United Parcel Service in CNBC's indispensable Warren Buffett archive. But it might be because of its long-term underperformance. Since March 31, 2006, UPS shares have delivered a total return (price plus dividends) of 218% – about 62 percentage points worse than the S&P 500 Index's total return in that same time frame.
However, UPS has been a fruitful position in 2020, jumping 44% year-to-date to smoke the broader market's 12% advance.
SPDR S&P 500 Trust ETF
- Shares held: 39,400
- Holding value: $13,195,000
- Percent of portfolio: 0.01%
For years, Warren Buffett has told investors to keep it simple: Buy an S&P 500 index fund, and also keep a little something in Treasuries to help you sleep well in down markets.
It's fantastic advice ... it just seemed a little hypocritical coming from one of the market's most celebrated stock pickers.
But Buffett finally took his own medicine in 2019's final innings, 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, $362.57). The SPY tracks the 500 components of the S&P 500 Index. It does so for a song, too, costing just 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.
While we're happy Buffett put his money where his mouth is, the position still is a little strange for a man who's actively trying to beat the index. After all, an ETF merely tracks an index, and will actually underperform slightly once costs are included. But it's possible that Buffett really just wanted to drive his longstanding point home.
Vanguard S&P 500 ETF
- Shares held: 43,000
- Holding value: $13,229,000
- Percent of portfolio: 0.01%
The other S&P 500 tracker Buffett bought in Q4 2019 was the Vanguard S&P 500 ETF (VOO, $333.00), which essentially provides the same exposure as the SPY, but it does so at a cheaper price.
Both funds track the S&P 500's components. Both funds are extremely liquid. The VOO just has a lighter fee (typical of Vanguard ETFs) at 0.03% annually, versus the SPY's 0.0945%.
If size is any indication, 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: $33,206,000
- Percent of portfolio: 0.01%
Another meager position that survived another quarter is Mondelez (MDLZ, $58.68), 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. Mondelez has gained about 7% this year, which puts it about 5 percentage points behind the S&P 500.
Nothing to see here, folks.
Liberty Latin America
- Shares held (Class A / Class C): 2,630,792 / 1,430,197
- Holding value (Class A / Class C): $21,704,000 / $11,642,000
- 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, $11.70) and Liberty Latin America Class C (LILAK, $11.72) 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.
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.
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).
Procter & Gamble
- Shares held: 315,400
- Holding value: $43,837,000
- 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 was one of Buffett's best holdings of the bear market, providing much-needed ballast, and it's slightly beating the market with nearly 14% gains in 2020.
Johnson & Johnson
- Shares held: 327,100
- Holding value: $48,699,000
- Percent of portfolio: 0.02%
While Warren Buffett smiled upon healthcare stocks in Q3, his tiny Johnson & Johnson (JNJ, $150.85) 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.
This holding could disappear at any time. If it does, chances are most people won't even notice.
- Shares held: 967,267
- Holding value: $93,119,000
- Percent of portfolio: 0.04%
Whatever affinity Warren Buffett had for JPMorgan Chase (JPM, $117.30) is clearly gone.
Berkshire Hathaway established its position during the third quarter of 2018 and upped it several times after that. But here's what he has done over the past three quarters:
- Q1 2020: Cut 1.8 million shares (3%)
- Q2 2020: Cut 35.5 million shares (61%)
- Q3 2020: Cut 21.2 million shares (95%)
Berkshire still was the sixth-largest shareholder in JPM as of the first quarter's end, but it's not even in the top 100 anymore.
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 healthcare 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 the Oracle's favor, and thus the JPM stake has been cut down to a minimal holding.
Pfizer (NEW POSITION)
- Shares held: 3,711,780
- Holding value: $136,222,000
- Percent of portfolio: 0.06%
As you'll see throughout this list, Warren Buffett went gaga over blue-chip pharma stocks during the third quarter. That includes a small position in Big Pharma name Pfizer (PFE, $37.33).
Pfizer is best-known for blockbuster drugs such as Lipitor (for cholesterol) and Viagra (for erectile dysfunction) that long ago lost their patent protections, but it has a stocked pipeline. Investments in research and development, along with acquisitions, have resulted in several hit drugs on the market, including Ibrance, to treat breast cancer; blood thinner Eliquis; and Xeljanz, a treatment for rheumatoid arthritis.
Also, Pfizer, along with partner BioNTech (BNTX), is among the frontrunners in the race to develop a COVID-19 vaccine.
The pharmaceutical giant shines as a long-term holding, thanks in part to the healthy dividend stream. Pfizer has paid uninterrupted dividends since 1980 and hiked its payout every year since 2010.
Still, Berkshire Hathaway only dipped a toe into this position. The holding company bought 3.7 million shares worth $136.2 million. That accounts for a minuscule 0.06% of the total portfolio value, making it one of the smallest position among the 50 Buffett stocks.
- Shares held: 643,022
- Holding value: $182,412,000
- Percent of portfolio: 0.08%
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, $250.96). The roughly 640,000-share stake is worth more than $180 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 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. Recently, an FDA advisory committee voted resoundingly against supporting Biogen's aducanumab for approval.
"Approving aducanumab, in the face of such an overwhelmingly negative vote and commentary, is virtually impossible," writes Baird's Brian Skorney, "and would destroy the agency's reputation at a very tenuous time for the regulator, ahead of potential actions on COVID vaccines."
One positive, however: Biogen still looks like a classic value play. Shares trade at just nine times analysts' expectations for next year's earnings. Better still, Biogen also reliably generates several billion dollars each year in free cash flow.
PNC Financial Services
- Shares held: 1,919,827
- Holding value: $211,008,000
- Percent of portfolio: 0.09%
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 has forced the Oracle's hand, and it's fair to say that Buffett has been on a full-blown bank purge in 2020. That included the continued shearing of his position in PNC Financial Services (PNC, $126.29), which fell by another 3,430,759 shares, or 64%, in Q3.
It's quite the reversal of fortune for PNC, which 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.
My, how times change. Buffett lopped off 3.9 million shares, or about 41%, from his PNC position in Q2, then further reduced it by almost two-thirds in Q3.
- Shares held: 19,201,525
- Holding value: $234,834,000
- Percent of portfolio: 0.10%
Suncor Energy (SU, $14.98) remains 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 bought 4.25 million shares during the second quarter to bring his stake to 19.2 million, or about $324 million.
He stayed pat in Q3.
It's still a small holding, representing about 0.10% 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 12th-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: 50,000,000
- Holding value: $268,000,000
- Percent of portfolio: 0.12%
Sirius XM (SIRI, $6.37) – 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. 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%.
Nonetheless, Buffett, who left the holding alone in Q3, is the fourth-largest owner of SIRI stock, well behind Liberty Global's 73% stake.
- Shares held: 2,919,613
- Holding value: $268,867,000
- Percent of portfolio: 0.12%
M&T Bank (MTB, $126.92) is a regional bank that operates more than 700 branches in eight states, including New York, Maryland and New Jersey, as well as Washington, D.C.. It has been profitable year after year for decades, and it also has been a reliable dividend payer.
These qualities have endeared Warren Buffett to the bank for a very long time. After all, 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.
No wonder, then, that MTB had been a member in good standing of Berkshire Hathaway's equity portfolio since 2001.
His affection for MTB, like other bank stocks, has waned greatly in 2020, however. Buffett cut his position by 15% during the second quarter, and he hacked away another 35% during Q3. That's nearly 2.5 million shares in two quarters.
But Berkshire still holds 2.3% of remaining shares, good enough to make it a top-10 investor.
T-Mobile US (NEW POSITION)
- Shares held: 2,413,156
- Holding value: $275,968,000
- Percent of portfolio: 0.12%
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, $128.65).
T-Mobile is certainly a much more attractive investment since it closed its $26 billion merger with Sprint in April. 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).
And in a way, it pairs nicely with Apple, which is the holding company's biggest stake.
But Buffett hardly bought with both fists. The 2.4 million-share, $276 million stake equates to just 0.12% of Berkshire Hathaway's total portfolio value.
- Shares held: 12,000,000
- Holding value: $337,320,000
- Percent of portfolio: 0.15%
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, $25.86).
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.
It wasn't that much of a stretch, then, when Buffett picked up 20.9 million shares in Barrick in the second quarter.
However, it appears Buffett's patience for the position is paper-thin. Berkshire curbed BRK.B's holding by more than 40% just a quarter after it initiated its stake. The remaining position is a negligible holding accounting for just 0.15% of the portfolio's assets.
- Shares held: 42,789,295
- Holding value: $385,531,000
- Percent of portfolio: 0.22%
Berkshire Hathaway's move into Teva Pharmaceutical (TEVA, $9.63) 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 44% since the start of Q2 2018 and trade at less than four times analysts' estimates for future earnings, which is a fraction of the S&P 500's forward P/E. That's in part thanks to a big share slide in August, after the U.S. government sued Teva for allegedly defrauding Medicare to juice sales of its multiple sclerosis drug Copaxone.
Berkshire trimmed its stake by 1% by Q1 and has stayed pat since then, leaving it with 3.9% ownership of the company. That makes it Teva's fourth-largest shareholder.
- Shares held: 6,353,727
- Holding value: $507,663,000
- Percent of portfolio: 0.22%
Globe Life (GL, $94.26) – 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 544% since March 31, 2001, easily outdoing the S&P 500's 362% 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).
Axalta Coating Systems
- Shares held: 23,420,000
- Holding value: $519,222,000
- Percent of portfolio: 0.23%
Axalta Coating Systems (AXTA, $28.30) took a small trimming during the third quarter.
Axalta, 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 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 the start of the year. AXTA shares remain down about 7% year-to-date.
- Shares held: 20,128,000
- Holding value: $526,750,000
- Percent of portfolio: 0.23%
Synchrony Financial (SYF, $31.11) 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 11%, versus a 60% 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 3.5% of Synchrony Financial's shares outstanding, which makes him the firm's eighth-largest shareholder.
- Shares held (Class A / Class C): 18,010,000 / 7,346,968
- Holding value (Class A / Class C): $378,390,000 / $150,870,000
- Percent of portfolio (Total): 0.24%
Liberty Global, represented via Class A (LBTYA, $22.50) and Class C (LBTYK, $21.85) 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).
Even after unloading 1.3 million shares, or 6% of its stake, during Q3, Berkshire is the second-largest holder of LBTYA at 3.0% of shares outstanding. Meanwhile, it's the No. 7 holder of LBTYK at 1.2% after leaving that position untouched.
- Shares held: 1,708,348
- Holding value: $653,648,000
- Percent of portfolio: 0.29%
Warren Buffett has seemingly found a winner in RH (RH, $407.79), 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 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." More recently, not only did the company's fiscal Q2 earnings announced in September clobber earnings estimates, but RH said it believed Americans would partake in "elevated spending on the home" through 2021.
RH shares are now up more than 90% 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 8.8% of all RH shares outstanding.
- Shares held: 24,415,168
- Holding value: $669,708,000
- Percent of portfolio: 0.29%
Berkshire's position in Store Capital (STOR, $32.60), 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.
Good news for Buffett: STOR shares are up 95% since the March bottom.
BRK.B now owns 9.6% of shares outstanding, making it Store Capital's third-largest shareholder after Vanguard and BlackRock.
- Shares held: 14,166,748
- Holding value: $749,279,000
- Percent of portfolio: 0.33%
Brazilian financial technology firm StoneCo (STNE, $65.52) 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).
More recently, in Q3 2020, the company reported that total payment volumes more than doubled, while adjusted profits jumped 43%.
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 has more than tripled since the bear-market bottom and is up 64% year-to-date.
Berkshire entered its position in October 2018 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.
BRK.B left this position untouched in Q3. Its stake represents 4.6% of the company's shares outstanding, making it StoneCo's sixth-largest shareholder.
- Shares held: 24,978,439
- Holding value: $847,019,000
- Percent of portfolio: 0.37%
Berkshire Hathaway's stake of supermarket titan Kroger (KR, $32.30), entered in Q4 2019, was a little bit of a head-scratcher at first, but clearly, Warren Buffett has warmed to this position.
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%) to give him nearly 22 million shares. And he added to that position during Q3 2020, upping his stake by roughly 13% to almost 25 million shares.
It's still no home-run swing at just 0.37% of the total Berkshire Hathaway equity portfolio. But Kroger did provide some stability during the early COVID-19 downturn while many other Buffett stocks floundered.
Also, don't sleep on Kroger. 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 1,575 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.
Snowflake (NEW POSITION)
- Shares held: 6,125,376
- Holding value: $1,537,469,000
- Percent of portfolio: 0.67%
Warren Buffett made quite the splash earlier this fall when he finally dove head-first into the Snowflake (SNOW, $241.85) 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 3,100 customers, 56 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.
- Shares held: 4,564,756
- Holding value: $1,543,664,000
- Percent of portfolio: 0.67%
While Berkshire Hathaway does indeed own Mastercard (MA, $335.45), Warren Buffett 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.
It's nice to see the Oracle giving credit where credit is due.
Mastercard, which boasts 943 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. He left the position alone in Q3.
Of course, MA has returned some 1,300%, 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: $1,679,217,000
- Percent of portfolio: 0.73%
Amazon.com (AMZN, $3,131.06) has, up until the past month or so, 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 65% since the end of Q2 2019, versus just 23% 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, but has since left the stake alone.
Bristol-Myers Squibb (NEW POSITION)
- Shares held: 29,971,194
- Holding value: $1,806,963,000
- Percent of portfolio: 0.79%
Bristol-Myers Squibb (BMY, $64.50) was another of Warren Buffett's third-quarter Big Pharma bets. In this case, Berkshire took on almost 30 million shares worth $1.81 billion.
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.
Merck (NEW POSITION)
- Shares held: 22,403,102
- Holding value: $1,858,337,000
- Percent of portfolio: 0.81%
Warren Buffett also unveiled a new position in Dow component Merck (MRK, $80.18) during Q3. Berkshire Hathaway bought 22.4 million shares in the third quarter worth nearly $1.86 billion.
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.
AbbVie (NEW POSITION)
- Shares held: 21,264,316
- Holding value: $1,862,541,000
- Percent of portfolio: 0.81%
Berkshire Hathaway's largest new healthcare bet in Q3 was a 21.3-million, $1.86 billion stake in biopharmaceutical firm AbbVie (ABBV, $98.36).
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 48 consecutive years. Even better, its current dividend yield is one of the highest in the S&P 500, and the company has raised the payout at a 20% rate over the past five years. Its current yield of 5.3% is several times better than the S&P 500 average of about 1.6%.
AbbVie is a dirt-cheap value stock, too, trading at just 8.4 times expected earnings.
Liberty Sirius XM Group
- Shares held (Class A / Class C): 14,860,360 / 43,208,291
- Holding value (Class A / Class C): $492,918,000 / $1,429,330,000
- Percent of portfolio (Total): 0.84%
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, $42.70) and Liberty Sirius XM Group Series C (LSXMK, $42.80) combined. While Buffett was busy tweaking his other Malone holdings, he left SIRI and the tracking stock alone.
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.
- Shares held: 9,987,460
- Holding value: $1,997,192,000
- Percent of portfolio: 0.87%
Visa (V, $212.70) 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 30.5% since Sept. 30, 2011. It's also a dividend-growth machine, ramping up its payout by 167% 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 0.87% of Buffett's portfolio. Meanwhile, Berkshire's half-percent stake in Visa doesn't even put it among the top 25 investors.
- Shares held: 80,000,000
- Holding value: $2,367,201,000
- Percent of portfolio: 1.03%
Warren Buffett continues to add to one of his favorite American brands.
Berkshire first took a stake in General Motors (GM, $42.13), the world's fourth-largest auto manufacturer by production, in early 2012. And he must've seen something he liked. He has since upped his position during 2018, 2019, and yet again here during the third quarter of 2020.
Buffett bought an additional 5.3 million shares in Q3, which brought his total to a cool 80 million shares on the dot.
Berkshire Hathaway is now the fifth-largest investor in General Motors at about 5.5% of all outstanding shares. And that bet is finally paying off, with GM shares now outperforming the market late in 2020. That's despite the fact GM suspended its dividend in late April.
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.
"Mary is as strong as they come," Buffett said. "She is as good as I've seen."
Bank of New York Mellon
- Shares held: 72,357,453
- Holding value: $2,484,755,000
- Percent of portfolio: 1.09%
Warren Buffett has been a fan of Bank of New York Mellon (BK, $39.71) for some time, and seems to largely remain one. While it trimmed the position a little in Q2, it avoided the heavy-handed haircuts that Berkshire's other bank holdings suffered during the third quarter.
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 the scythe 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. The BK stake was untouched in Q3.
Berkshire Hathaway remains the largest investor at 8.2% of shares. (Vanguard is No. 2 at 7.3%.)
- Shares held: 12,815,613
- Holding value: $2,625,279,000
- Percent of portfolio: 1.15%
Berkshire bought Verisign (VRSN, $194.88) – 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 much this year, up just 1% to the S&P 500's 12%, but it has raced ahead 402% since the start of 2013, more than doubling the S&P 500's 199% 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 now owns almost 13 million shares in the company, making it the largest institutional investor in Verisign at an 11.2% ownership stake.
- Shares held: 127,380,440
- Holding value: $2,994,716,000
- Percent of portfolio: 1.31%
Warren Buffett has just about had it with Wells Fargo (WFC, $24.90).
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.
Buffett has sold off Wells Fargo 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. In Q2, he jettisoned 85.6 million shares, or more than a quarter of the remaining stake.
In the third quarter, he cut the stake by another 46%.
Amazingly, Berkshire Hathaway remains a top-five investor despite tossing huge chunks of its position overboard. Buffett still maintains a 3.1% stake that puts it behind Vanguard, BlackRock, State Street and Dodge & Cox. Those four shareholders all added to their positions in Q3.
- Shares held: 36,095,570
- Holding value: $3,091,586,000
- Percent of portfolio: 1.35%
Buffett once again trimmed its position in DaVita (DVA, $113.14), which was unchanged for years until recently. BRK.B snipped 1% of its stake in the kidney care provider and dialysis center operator earlier in 2020. Then it cut another 5% in Q3.
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 about 7 percentage points since Q1 2012, so it's not terribly surprising that Berkshire is slowly unwinding its stake.
Even then, Buffett remains DaVita's largest shareholder by a country mile. Its stake of 36.1 million shares represents almost 30% of the company's shares outstanding.
- Shares held: 5,213,461
- Holding value: $3,254,972,000
- Percent of portfolio: 1.42%
Charter Communications (CHTR, $641.41) 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 1.4% of its equity assets, and that's good news for Buffett. Shares have well more than doubled the broader market's performance with a 32% gain.
- Shares held: 131,961,832
- Holding value: $4,730,833,000
- Percent of portfolio: 2.07%
U.S. Bancorp (USB, $44.28) 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 114% since March 31, 2006, versus a 38% gain for the financial sector.
After scraping a little of the position in Q2 2020 (a 0.2% trimming), Berkshire Hathaway left USB alone. That patience stands in stark contrast to what Buffett did to the likes of PNC and JPMorgan.
USB shareholders no doubt appreciate that stability. Berkshire's 8.8% stake makes it the largest institutional shareholder, ahead of Vanguard (7.3%) and BlackRock (6.5%).
- Shares held: 24,669,778
- Holding value: $7,150,535,000
- Percent of portfolio: 3.12%
Moody's (MCO, $275.54) 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 7.4%.)
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: $9,752,763,000
- Percent of portfolio: 4.26%
Kraft Heinz (KHC, $32.15) has gone back to underperforming the market in 2020 after enjoying some bear-market outperformance. But despite the fact that Warren Buffett likely still regrets his participation in what was one of his biggest deals of the past decade, Berkshire's position in KHC went untouched in Q3 2020.
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. Its second-quarter earnings beat expectations, but Kraft still had to record yet another $2.9 billion in impairments.
Things looked better for Kraft in Q3. The company topped revenue and earnings expectations and upgraded its full-year guidance. But that has done little to alter the stock's status as a dud 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 delivered a Kraft's shares have lost nearly 45% of their value on total-return basis since Sept. 30, 2015.
But 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 46.7%.
- Shares held: 151,610,700
- Holding value: $15,198,971,000
- Percent of portfolio: 6.64%
American Express (AXP, $118.67) 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 has been dumping financial stocks all year, and he even trimmed his stakes in payments processors during Q2.
American Express is both. And yet the position remains fully intact three quarters into 2020.
Berkshire Hathaway, which owns 18.8% of American Express' shares outstanding, is by far the company's largest shareholder. No. 2 Vanguard owns 5.9%.
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 1,200% total return over the past quarter-century would make most investors glow.
- Shares held: 400,000,000
- Holding value: $19,748,000,000
- Percent of portfolio: 8.63%
Coca-Cola (KO, $53.85) was the largest of the Warren Buffett stocks to go untouched this past quarter.
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 131% total return over the past decade is well behind the S&P 500's 272% 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: 1,010,100,606
- Holding value: $24,333,323,000
- Percent of portfolio: 10.63%
Buffett has spent most of 2020 hacking and slashing at his various bank-stock holdings. But he remains more committed than ever to Bank of America (BAC, $27.58).
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 Q1 and Q2 of this year, he stayed pat on BofA. Then in the third quarter, Buffett added to Berkshire's already large position by buying more than 85 million shares.
The stake in BAC, worth $24.33 billion, accounts for 10.6% of the holding company's total portfolio value. Meanwhile, Berkshire is Bank of America's largest shareholder, at 11.7% of its shares outstanding.
- Shares held: 944,295,554
- Holding value: $109,358,868,000
- Percent of portfolio: 47.78%
"I don’t think of Apple as a stock," Warren Buffett has said about Apple (AAPL, $120.30). "I think of it as our third business."
It might as well be. Even after Buffett sold off a little bit of Berkshire's Apple stake in Q3, the tech giant represents nearly half of assets in the Berkshire Hathaway equity portfolio.
Buffett has belted out numerous songs of praise for Apple, the undisputed king of the Buffett stocks. Shares in the nearly $2 trillion company now make up nearly 48% of Berkshire's equity holdings, and that's after the firm unloaded about 36 million shares, or 3% of its stake.
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."
BRK.B is Apple's third largest investor with a 944 million-share stake representing about 5.4% of all shares outstanding. Only Vanguard and BlackRock – giants of the passively managed index fund universe – hold more Apple stock.