Warren Buffett's stock picks aren't what they used to be. Indeed, the Berkshire Hathaway (BRK.B) equity portfolio has changed dramatically over the past few years. Although old-guard favorites such as American Express (AXP) and Coca-Cola (KO) still form the core of the portfolio, Buffett & Co. have taken a shine to names such as Apple (AAPL) and Amazon.com (AMZN), and even to lesser-known firms such as Nu Holdings (NU).
One thing that hasn't changed, however, is Buffett's preference for maintaining a highly concentrated portfolio. Excluding the company's Japanese brokerage stocks, Apple alone accounts for 26% of Berkshire's equity holdings. That's down from almost 50% a year ago.
Furthermore, Berkshire's top five U.S. equity holdings comprise about two-thirds of its portfolio's value, while the top 10 account for more than 80%.
As Buffett likes to say, diversification is for those who don't know what they're doing.
Also please note that Buffett himself is thought to handle the largest positions in the Berkshire Hathaway portfolio. Buffett says his co-managers – Ted Weschler and Todd Combs, who is CEO of Geico – act independently. Buffettologists generally assume Berkshire's smaller buys and sells are the work of these colleagues.
But whether we're talking about Berkshire's biggest bets or the scores of stocks it maintains at the margins, Buffett's focus shifted after the COVID-19 pandemic.
Buffett owned airline stocks at the start of 2020; now he holds none. Banks were aces among Buffett stocks to begin 2020; Berkshire soon kicked most of them to the curb. And it seems like only yesterday that Buffett was an enthusiastic buyer of select pharmaceutical names. Today, most of those positions have been closed out too.
If you want to know which stocks Warren Buffett is buying and selling, look no further than the Berkshire Hathaway's holdings.
Price, share totals and other data as of September 30, 2024. Sources: Berkshire Hathaway’s SEC Form 13F filed November 14, 2024, for the reporting period ended September 30, 2024; and WhaleWisdom.
The Berkshire Hathaway portfolio
Stocks Warren Buffett Is Buying
Berkshire Hathaway initiated two positions in the third quarter of 2024: Domino's Pizza (DPZ) and Pool (POOL). The size of the new stakes suggests these were not Warren Buffett's picks, but let's take a brief look anyway.
Berkshire bought almost 1.3 million shares in Domino's Pizza during the third quarter, a stake worth $549.4 million as of September 30. With a weight of 0.21%, DPZ ranks as the 27th most material holding in Berkshire's U.S. equity portfolio.
Berkshire now owns 3.7% of DPZ common shares outstanding, making it the pizza chain's seventh-largest shareholder. Wall Street analysts, whom Buffett totally ignores, are likewise bullish on DPZ's prospects – at least over the next 12 months or so.
Of the 34 analysts covering DPZ surveyed by S&P Global Market Intelligence, 18 rate it at Strong Buy, four call it a Buy, 11 have it at Hold and one says Sell. That works out to a consensus recommendation of Buy, with high conviction.
As for Pool, which describes itself as the largest distributor of supplies, equipment and machinery for swimming pools worldwide, Berkshire Hathaway initiated a stake of 404,057 shares worth $152.2 million as of the end of Q3.
POOL's weight of 0.06% makes it the 30th largest holding in the Berkshire Hathaway portfolio. Suffice to say, this name won't be all that important to the conglomerate's overall results. Meanwhile, with an ownership stake of a little more than 1%, Berkshire is POOL's 21st largest shareholder.
As previously reported, Berkshire has been adding to its position in Sirius XM Holdings (SIRI). The investment, which is thought to be handled by Ted Weschler, includes purchases of a tracking stock for Liberty Media (LLYVA), as well as the merger of Sirius XM and the tracking stock. (Happily, this means we can all forget about Liberty Sirius XM Group, Series A and Liberty Sirius XM Group, Series C.)
The bottom line is that BRK.B now holds 105.1 million shares in SIRI, bringing its weight in the portfolio up to 0.9% from 0.1%. The stake, worth $2.5 billion as of the end of Q3, further cements BRK.B's position as SIRI's largest shareholder, owning more than a third of its common stock outstanding.
Lastly, Berkshire upped its stake in Heico (HEI) by 5,445 shares. The position, worth $213.9 million, has a weight of less than 0.1% in BRK.B's stock portfolio.
Stocks Warren Buffett Is Selling
As is well known by now, Buffett has been selling Apple stock even though the iPhone maker remains his favorite name by far. He has also greatly pared back Berkshire Hathaway's exposure to Bank of America.
Whether these moves were made for tax purposes or regulatory reasons or because Buffett is calling a market top is not known.
Here's what market participants do know based on Berkshire Hathaway's Form 13F filed with the Securities and Exchange Commission on November 14.
After a series of sales, Berkshire Hathaway holds an even 300,000 shares in Apple. At more than 26% of BRK.B's U.S. equity portfolio value, the iPhone maker remains Buffett's biggest single bet by far.
Buffett is also reducing exposure to BAC, by 23% in the third quarter alone. With a weighting of almost 12% – down from almost 15% three months ago – Bank of America is Berkshire's third largest holding. The stake was worth $32 billion as of the end of Q3.
Staying in the financial sector, Berkshire cut its stake in Capital One Financial (COF) by 7%, selling a total of 719,052 shares. With a 0.5% weight in the portfolio, COF remains Berkshire's 19th largest holding.
In other sales, Berkshire slashed its stake in Nu Holdings (NU) by nearly a fifth, and decreased its investment in Charter Communications (CHTR) by more than 26%.
Turning to the department of "that didn't last long," Berkshire essentially exited its stake in Ulta Beauty (ULTA), a position it initiated earlier this year.
As for total exits, Berkshire sold off what remained of its stake in Floor & Decor Holdings (FND), a stock it first bought in the third quarter of 2021.
Berkshire's Top Five Holdings
As noted above, Warren Buffett has always maintained a highly concentrated portfolio. Indeed, he's said that "diversification makes very little sense for anyone who knows what they're doing."
The stocks below accounted for about two-thirds of Berkshire's total U.S. equities portfolio value as of the end of Q3. If you want to know what's driving the bulk of the Buffett's returns, check out the names below.
Apple
Warren Buffett has called Apple "Berkshire's third business," so it should come as no surprise that the iPhone maker routinely takes the top spot among the holding company's positions.
True, Berkshire pared its stake in Apple in early 2024, but Buffett assured shareholders he adores AAPL as much as ever at the annual meeting. BRK.B's CEO took pains to explain that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.)
For the record, the sales were for tax purposes. The greatest long-term investor of all time said that AAPL is "even better" than American Express or Coca-Cola, two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.
Bank of America
Bank of America is Berkshire Hathaway's second-largest holding behind only Apple. Buffett first acquired BAC stock in Q3 2017. Berkshire is the bank's largest institutional shareholder.
In an April 2023 media appearance, Buffett said that he unloaded many of the holding company's bank stocks because he didn't think they were near as solid investments as they once were. As for Bank of America, he said this about the bank and its CEO:
"I like [CEO] Brian Moynihan enormously. And I just don't wanna, I don't wanna sell it," the 92-year-old CEO told CNBC's Becky Quick. "But I did sell banks that we'd owned for 25 or 30 years. And if they asked me why I did it, I told them – I just think the system isn't set up quite right in terms of connecting punishment to culprits on something that's important."
American Express
Buffett likes credit-card companies. Berkshire owns substantial stakes in payments processors Visa (V) and Mastercard (MA) but he really loves American Express.
Buffett took his first stake in AmEx in the 1960s, and it’s still paying off a half-century later. There's a lot to love about AmEx: Its management is strong, it's a dominant brand in the industry, and it generates copious amounts of free cash flow – the money left over after essential capital expenditures are made that can be used to finance dividends and stock buybacks.
The current yield on the dividend isn’t eye-catching, but it is safe and growing. And the stock is only slightly more volatile than the broader market. Those are attributes that will help long-term investors sleep better at night.
Coca-Cola
Buffett famously watched Coca-Cola for 52 years before investing in the stock.
He finally took the plunge in 1988. "We expect to hold these securities for a long time," Buffett wrote back then of his new stake in Coke in a letter to Berkshire shareholders. "In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."
As of the end of Q3 2024, Berkshire owned 9.3% of Coca-Cola’s outstanding shares. Analysts like the stock's prospects, too. Wall Street gives KO a consensus recommendation of Buy, with strong conviction.
Chevron
Thanks to the outlook for crude oil prices, the energy sector is enjoying steady and predictable free cash flow. Chevron, the only energy name among all 30 Dow Jones stocks, is returning some of this cash to shareholders through dividends and buybacks.
Make no mistake: there are few things Buffett likes more than dividends and buybacks.
It also helps that oil is a solid hedge against inflation. With inflation still running ahead of the Federal Reserve's 2% target, commodities should remain in favor. Berkshire's massive pile of cash, equivalents and short-term investments is much better put to use in an asset like Chevron under such conditions.
