Warren Buffett Stocks Ranked:
Warren Buffett's stock selections don't look like how they used to.
The Berkshire Hathaway (BRK.B) equity portfolio has undergone a lot of upheaval over the past few years. For one, Berkshire Hathaway's investment arm has gained a taste for growth plays. While old-guard favorites such as American Express (AXP) and Coca-Cola (COKE) still hang around, Buffett & Co. have taken a shine to stocks such as Apple (AAPL) and Amazon.com (AMZN), and even lesser-known firms such as Snowflake (SNOW) and StoneCo. (STNE).
But the Berkshire Hathaway portfolio also has gone through several haircuts over the past year or so. Buffett has trimmed or cut dozens of stocks as the COVID-19 pandemic drastically altered the investment landscape. He owned several airlines at the start of 2020; now he holds none. Banks were aces among Buffett stocks to begin 2020; Berkshire spent the whole year kicking them to the curb.
Well ... it's 2021, and "Uncle Warren" hasn't stopped selling.
Buffett broke out the broom yet again in the third quarter of the year, trimming or outright cutting 10 positions. Meanwhile, he only replaced the outgoing stocks by adding to two positions and initiating two new stakes. That's according to its most recent Form 13F regulatory filing, submitted to the Securities and Exchange Commission on Nov. 15.
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. (And as always, remember: A few of these Buffett stocks were actually picked by portfolio managers Todd Combs and Ted Weschler.)
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The Berkshire Hathaway Portfolio
United Parcel Service
SPDR S&P 500 Trust ETF
Vanguard S&P 500 ETF
Procter & Gamble
Liberty Latin America
Johnson & Johnson
Floor & Decor
Liberty Sirius XM Group
Bank of New York Mellon
Bank of America
Bristol Myers Squibb
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Read on as we examine each and every holding to give investors a better understanding of the entire Berkshire Hathaway portfolio.
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Price, share totals and other data as of Nov. 15, 2021. Stocks are listed in reverse order of their weight in the Berkshire Hathaway equity portfolio. Sources: Berkshire Hathaway’s SEC Form 13F filed Nov. 15, 2021, for the reporting period ended Sept. 30, 2021; and WhaleWisdom.
Percent of portfolio:
United Parcel Service is still here. The world's biggest package delivery company continues to be the smallest position among Warren Buffett's stocks. It hangs by a thread, but it has done so for quite some time – more than 15 years, in fact.
Perhaps the reason Uncle Warren hasn't ditched the stock is that he doesn't even notice it anymore. At fewer than 60,000 shares, this is a rump position, leftovers, an odd lot.
It's certainly less than what Buffett started out with. UPS stock was added to the Berkshire Hathaway portfolio during the first quarter of 2006, when Buffett added 1.43 million shares worth about $113.5 million at the time. That comes to an average price per share of $79.38.
But UPS never grew to be a major part of Berkshire Hathaway's portfolio, and Buffett has pared the position over the years to where it wouldn't be a surprise if he exited the stake at any time. He's also been characteristically quiet about the stake; there's no mention of United Parcel Service in CNBC's indispensable Warren Buffett archive.
The UPS stake has been a longtime disappointment, with the stock delivering a total return (price plus dividends) of 321% since March 31, 2006, versus 398% for the broader market. It has at least outperformed since the COVID lows, that so that's some salve for Buffett & Co.
United Parcel Service (UPS)
Warren Buffett's advice for most investors has always been simple: Buy an S&P 500 Index fund (.SPX), and while you're at it, throw a little money into Treasuries to help you sleep well in down markets.
But for years, it was always "indexing for thee, but not for me." The market's most celebrated stock picker kept on doing what he's always done: picking stocks and not indexing a single dime.
Buffett finally took his own medicine in 2019's final innings, however, buying not one but two S&P 500-tracking exchange-traded funds (ETFs).
The first of those is America's first ETF: the SPDR S&P 500 Trust ETF. The SPY tracks the 500 components of the S&P 500 Index.
It does so for an extremely reasonable 0.0945% annually, which comes to just $9.45 annually on a $10,000 investment. While many use it as a buy-and-hold investment, its high volume makes it a popular tool for traders, too.
It's great that Buffett finally put his money where his mouth was. But if we're being honest, it's a strange position for a man who is actively trying to beat the index. After all, an ETF merely tracks an index, and will actually underperform slightly once costs are included.
SPDR S&P 500 Trust ETF (SPY)
Who knows? Maybe Uncle Warren really just wanted to drive his longstanding point home.
How serious is Buffett about index funds? Well, he brought the subject up again at this year's annual Berkshire Hathaway meeting, saying, "I recommend the S&P 500 index fund and have for a long, long time."
Perhaps that's why, in addition to SPY, he also bought the Vanguard S&P 500 ETF back in 2019.
For the most part, VOO is pretty much the same product as the SPY. Both funds track the S&P 500's components.
Both funds are extremely liquid. The most significant difference is the price. The VOO just has a lighter fee (typical of Vanguard ETFs) at 0.03% annually, versus the SPY's 0.0945%.
When you add together Berkshire's investments in the two tracking funds, you start to realize those investments probably are largely symbolic.
Vanguard S&P 500 ETF (VOO)
Each stake represents roughly one one-hundredth of a percent of Berkshire Hathaway's equity holdings.
Warren Buffett has had it. Wells Fargo (WFC), which has been in the Berkshire portfolio since 2001, was once considered among the most treasured of Buffett stocks. But it turned into a weight around the Oracle's neck starting in 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.
So Buffett started selling, first a little, then a lot, to the point where Wells Fargo has been relegated to the portfolio's cellar.
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.
Berkshire sold off WFC shares in numerous quarters since the start of 2018. However, for several quarters, most of those sales appeared to be routine paring of the position to keep it below a regulatory 10% maximum ownership threshold for banks.
Q4 2019: Buffett dumps more than
55 million shares (~15% of the position).
Q2 2020: Buffett jettisons another
85.6 million shares (~26%).
Q3 2020: Down go another
85.6 million shares (~46%).
Q4 2020: Berkshire unloads
75 million shares (~58%).
Q1 2021: Buffett makes his deepest cut yet, selling off 51.7 million shares, or 98.7% of the remaining position, all but eliminating WFC from the portfolio.
Wells Fargo (WFC)
Then came the hacksaw:
If there's any saving grace, it's that he's left the remainder alone for a couple quarters.
Nonetheless, within about a year, Warren has gone from one of Wells Fargo's largest shareholders to owning an insignificant slice of the pie.
Another meager position that survived another quarter is Mondelez, 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 is a nothingburger among Buffett stocks, accounting for just 1/100th of a percent of the total value of BRK.B's equity portfolio.
The tiny position did hold up well during the bear market, as investors added some consumer staples stocks for defense. But MDLZ has put up more modest returns since stocks got back into gear. All told, Mondelez shares are up just 10% since the Feb. 19, 2020, market top, while the S&P 500 has delivered more than 42% in total returns.
Nothing to see here, folks.
Warren Buffett is clearly fond of Dow Jones (.DJI) stocks, which can be found throughout the Berkshire Hathaway portfolio. But Procter & Gamble is one Dow component that has fallen by the wayside as a Berkshire Hathaway investment.
Buffett came to own P&G – maker of Tide detergent, Crest toothpaste and Pampers diapers – via the holding company's 2005 acquisition of razor-maker Gillette. At the time, Buffett, a major Gillette shareholder, called the tie-up a "dream deal." Procter & Gamble became one of BRK.B's biggest equity positions.
The dream didn't last long. The Great Recession eroded the pricing power of old-line consumer staples companies such as P&G. The company embarked on a plan to shed 100 underperforming brands.
The Duracell battery business happened to be on the list, and Berkshire bought it in 2014 in exchange for PG stock. Two years later, Buffett pared what was left of the P&G stake by 99%. He hasn't added to the position since.
While this "Buffett stock" is almost phased out, P&G did prove a helpful holding through the bear market and early on in the recovery. However, like many defensive stocks, PG shares have largely underperformed over the past few months.
Procter & Gamble (PG)
Shares held (Class A / Class C):
2,630,792 / 1,284,020
Holding value (Class A / Class C):
$34,410,000 / $16,846,000
Percent of portfolio (Total):
The world's biggest package delivery company continues to be the smallest position among Warren Buffett's stocks. It hangs by a thread, but it has done so for quite some time – more than 15 years, in fact.
Over the years, Berkshire has made several de facto bets on legendary pay-TV mogul John Malone. The initial appeal to Buffett and his portfolio managers is plain to understand: Game knows game.
Liberty Latin America Class A Shares and Liberty Latin America Class C Shares represent one of those bets.
Liberty Latin America provides cable, broadband, telephone and wireless services in Chile, Puerto Rico, the Caribbean and other parts of Latin America.
More recently, in November 2020, Liberty Latin America closed on its nearly $2 billion purchase of AT&T's (T) wireless and wireline assets in Puerto Rico and the U.S. Virgin Islands. And in August 2021, it completed the acquisition of Telefónica's (TEF) wireless operations in Costa Rica.
Liberty Latin America Class A Shares (LILA)
Liberty Latin America Class C Shares (LILAK)
Liberty Global (LBTYK)
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.
Buffett has left the positions completely untouched
Like fellow defensive stock P&G, Johnson & Johnson has fallen out of favor with Buffett and represents nothing more than a token holding.
Blame the diversified healthcare giant's history of headline-grabbing faceplants. J&J 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 $53 million), which represents roughly one one-hundredth of shares outstanding.
That position has vastly underperformed as the market has rebounded out of the COVID lows; JNJ shares have delivered a 54% total return, but the S&P 500 has more than doubled.
Johnson & Johnson (JNJ)
Floor & Decor (NEW POSITION)
Warren Buffett initiated a stake in Floor & Decor Holdings in Q3, which is very much in keeping with some of his other investments in home retail.
Floor & Decor sells hard surface flooring and related accessories primarily through 133 company-operated warehouse store formats.
Buffett bought more than 816,000 shares in the company worth almost $99 million as of Sept. 30.
It's a small position, to be sure, accounting for a meager 0.03% of Berkshire Hathaway's total portfolio value. But it still fits nicely with some of Buffett's other holdings and investments.
Berkshire Hathaway, for example, has been building a position in home goods retailer RH (RH) – formerly known as Restoration Hardware – since the third quarter of 2019. And he's made no secret of his love for Berkshire Hathaway's wholly-owned subsidiary Nebraska Furniture Mart.
Floor & Decor Holdings (FND)
Floor & Decor thus appears to be a way to play the housing market, albeit with a somewhat oblique, Buffett-style angle.
Sirius XM – a company that reaches roughly 100 million listeners via its core satellite radio business and Pandora, which it acquired in 2018 – is another Malone-related stock pick.
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 of 2017. Years later, in Q1 2020, he trimmed 3.9 million shares, or 2%, then really took out the hatchet during Q2 2020 by cutting more than 82 million shares, or 62%.
While he left the stake alone for a couple quarters, he brought out the scissors once more during 2021's first quarter, shedding 6.3 million shares, or another 13%. He kept the position stable in Q2 and Q3 2021, however.
Buffett remains the fourth-largest owner of SIRI stock at 1.1% of shares. That's well behind Liberty Media's 78% stake.
Sirius XM (SIRI)
Brazilian financial technology firm StoneCo provides software and hardware for companies to facilitate credit- and debit-card payments. And it had been one of the "growthiest" Warren Buffett stocks since Berkshire entered the position in Q4 2018.
At least until lately.
STNE shares more than doubled in 2020 to easily outdo the S&P 500's 18% returns, bringing Buffett's gains since the end of 2018 to 355%. But StoneCo's stock has since gone ice-cold, shedding 64% of its value year-to-date in 2021, and shares are now underperforming the S&P 500 by more than 30 points since the start of 2019.
Small wonder, then, that Buffett took some profits during Q1 2021, selling off roughly 3.5 million shares, or 24% of the stake.
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.
But while StoneCo isn't necessarily in the Buffett stocks blueprint, it nonetheless fits well with Berkshire Hathaway's general bullishness on companies that facilitate and process payments. "Payments are a huge deal worldwide," Warren Buffett said at Berkshire's 2018 shareholder meeting.
And the company is still growing like a weed. 2020 total payment volume (TPV) jumped 62.6% year-over-year to 209.9 billion Brazilian reals, and revenues were 28.9% higher, to 3.3 billion Brazilian reals.
Berkshire Hathaway has plenty of insurance exposure in its core operations, including Geico, General Re, MLMIC Insurance and Berkshire Hathaway Specialty Insurance, among others.
But the industry has never been a major factor in its equity portfolio. Indeed, the company dumped what was left in its stake of Travelers (TRV) in early 2020.
So it was something of a surprise that BRK.B not only bought into Marsh McLennan at the end of 2020, but expanded its position in Q1 2021.
Berkshire initiated a 4.2 million-share position worth just short of half a billion dollars during Q4 2020. It wasn't a major position, at just 0.2% of the total value of Berkshire's equity holdings. But by virtue of another 1 million shares or so purchased during the first quarter of 2021, the stake had increased by 23% in just a few short months.
However, Buffett has had a change of heart of late, reducing the position by 20% during the second quarter, then by another 34% in Q3 2021, leaving it with just 2.7 million shares.
Shares in MMC, which provides various risk, strategy and consulting services, are long-time market laggards. Perhaps Buffett sees untapped value. The company also pays a modest dividend yielding 1.3% at present.
Marsh McLennan (MMC)
Berkshire Hathaway moved into Teva Pharmaceutical during 2017's fourth quarter, and the company looked like a classic Warren Buffett stock 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.
Problem is: They're still cheap.
TEVA shares have lost almost 45% of their value since the start of Q2 2018. They currently trade at less than four times analysts' estimates for future earnings, which is a fraction of the S&P 500's forward P/E.
But Berkshire has left the position alone for about a year. Its most recent move was a small 1% trimming in Q1 2020. And Buffett remains Teva's fourth-largest shareholders by virtue of his 3.9% stake in the pharmaceutical name.
Teva Pharmaceutical (TEVA)
Royalty Pharma (NEW POSITION)
Healthcare typically hasn't represented a large percentage of Berkshire Hathaway's assets, but the holding company usually maintains positions in several of the sector's names.
That's still the case following BRK.B's exits in Merck and Organon, as the Oracle of Omaha has decided to bring Royalty Pharma into his stable of Buffett stocks.
That said, RPRX isn't your usual pharmaceutical play.
Royalty Pharma, as the name might indicate, is focused on acquiring biopharmaceutical royalties. It doesn't research or develop drugs – it helps provide capital for the companies that do.
As the company explains: "We fund innovation in the biopharmaceutical industry both directly and indirectly – directly when we partner with companies to co-fund late-stage clinical trials and new product launches in exchange for future royalties, and indirectly when we acquire existing royalties from the original innovators."
Through that model, RPRX has gotten a piece of blockbuster drugs such as AbbVie's Imbruvica, Biogen's (BIIB) Tysabri and Pfizer's (PFE) Xtandi.
Buffett spent $475 million to initiate a stake in RPRX during the third quarter, immediately making him a top-10 shareholder with 3.1% of all shares held.
But it's still a relatively meager position within the Berkshire Hathaway portfolio, at less than 0.2% of equity assets.
Royalty Pharma (RPRX)
Globe Life – known as Torchmark up until 2019 – is another of the small insurance-related holdings in the Berkshire Hathaway portfolio.
GL, a life and health insurance firm, might be a boring company, but it has very quietly been a very good stock pick.
Berkshire Hathaway has owned shares in Globe Life/Torchmark since early 2001.
In that time, GL has generated a total return of 566%, outdoing the S&P 500's 504% performance with dividends included.
BRK.B owns 6.2% of Globe Life's shares outstanding, which makes it the firm's third-largest shareholder after Vanguard and BlackRock (BLK).
Globe Life (GL)
Berkshire Hathaway bulked up its exposure to the communication services sector during the third quarter of 2020 by acquiring a small stake in wireless communications company T-Mobile US.
Then Buffett literally doubled down on that bet during Q4 2020, growing his stake by another 2.8 million shares, or 117%.
T-Mobile is certainly a much more attractive investment since it closed its $26 billion merger with Sprint in April 2020. The deal created a real No. 3 wireless company whose total subscribers are at least within the same ballpark as Verizon (VZ) and AT&T (T).
Shares, however, have had a rough 2021, off 12% versus a total return of about 26% for the broader market.
The 5.2 million-share, $670 million stake now represents roughly a quarter of a percent of the Berkshire Hathaway portfolio's worth. That amounts to a 0.4% stake in the firm, making Buffett one of the firm's top 20 shareholders.
T-Mobile US (TMUS)
Berkshire's position in Store Capital, which it entered during the summer of 2017, was an unusual one. Real estate investment trusts (REITs) – a way to invest in real estate without owning the actual assets – have never been big among Buffett stocks.
Store invests in single-tenant properties including chain restaurants, supermarkets, drugstores and other retail, service and distribution facilities.
That is to say, Store is a bet on brick-and-mortar retail, which is thought to be in permanent decline.
Buffett, however, spied value – and he spied it for quite some time. Store Capital CEO Christopher Volk told CNBC that Buffett studied the REIT for three years before taking his position.
The Oracle of Omaha must've seen similar value arise in the company's February-March dip, which sent STOR shares off by roughly 65% from peak to trough. We say that because he bought 5.8 million shares, or an additional 31%, to bring his stake to 24.4 million shares yielding 4.5% at current prices.
Good news for Buffett: STOR shares have returned 124% since the March bottom to top the S&P 500's 115% total return since then.
BRK.B now owns 9.0% of shares outstanding, making it Store Capital's third-largest shareholder after Vanguard and BlackRock.
Store Capital (STOR)
Warren Buffett has found a winner in RH, 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. The holding company has since topped up its position by 1% in Q1 2021, and 2% in Q2.
RH operates 106 retail and outlet stores across the U.S. and Canada. It also owns Waterworks, a high-end bath-and-kitchen retailer with 14 showrooms.
RH shares have almost tripled since Jan. 1, 2020, up 198% versus a 49% total return for the broader market. Shares are killing it in 2021, too, up 42% to the S&P 500's 26%.
It's hard to tell whether this was an Oracle of Omaha buy, or a project of one of his lieutenants, Ted Weschler or Todd Combs. Buffett has been mostly mum on RH. Still, the stake fits broadly with the Oracle'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.
Buffett currently is the RH's third-largest investor by virtue of owning about 8.5% of all shares outstanding.
While brick-and-mortar retailers have struggled mightily over the past few years thanks in part to the rise of e-commerce, RH has found success catering to the upper crust. And that success continued throughout the COVID pandemic as Americans, forced to work from home, decided to spend on improving their environs.
London-based Aon offers a wide range of professional services, from insurance and reinsurance to pension administration and financial advising to health insurance. And it represented Buffett's lone new position in Q1 2021.
Like most insurance firms, you won't necessarily expect profits to grow in a perfectly straight line year after year.
But revenues have improved without interruption over the past four years, and net income is up in three of the past five years.
That operational strength has led to superior returns against both the market and its peers. AON shares have provided a total return (price plus dividends) of 605% over the past decade, versus 354% for the S&P 500 and 302% for the SPDR S&P 500 Insurance ETF (KIE).
Berkshire hasn't exactly bet the farm on Aon. Even after adding 300,000 shares, or about 7%, the stake is still worth just $1.2 billion, or a little more than 0.4% of the equity portfolio's assets. Nonetheless, it's one of the few stocks Buffett & Co. have been bullish on amid a torrent of quarterly sales.
Among Warren Buffett stocks, banks are the most notable for getting the ax of late, but we should note that he's soured on several healthcare plays too.
Bristol Myers Squibb was one of several Big Pharma bets Warren Buffett during the third quarter of 2020.
In the case of BMY, Berkshire took on almost 30 million shares worth $1.81 billion. Buffett grew even fonder of the company over the next few months. He tacked on another 3.4 million shares during Q4 2020, growing the position by 11%.
However, Buffett shed 2.3 million shares in the pharmaceutical giant during the first three months of 2021. In Q2 2021, he dumped another 4.7 million shares, or 15%. And then in Q3, he trimmed yet another 16% or about 4.2 million shares.
BMY beefed up in a big way a year ago when it acquired pharmaceutical giant Celgene, and that likely was a big part of the initial 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.
Bristol Myers Squibb (BMY)
That's par for the 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.
Berkshire Hathaway might own Mastercard, but Warren Buffett has given credit where credit is due: namely, to his portfolio managers Combs and Weschler.
Buffett's biggest regret is not pulling the trigger sooner.
"I could have bought them as well, and looking back, I should have," Buffett said about Visa and Mastercard in 2018, referring to his own investment in American Express.
Mastercard, which boasts 974 million cards in use across the world, is one of several payments processors that count themselves as Buffett stocks. That said, the position is a little lighter of late. Berkshire reduced its position by 6%, or 276,108 shares, during the third quarter, bringing MA's overall weight down to 0.5% of the equity portfolio.
Of course, Mastercard shares have returned some 1,430%, 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.
Besides: Since then, he has left well enough alone.
Biopharmaceutical firm AbbVie is yet another of Berkshire's big pharma adds from Q3 2020, but it's also another healthcare stock that Buffett has been distancing himself from.
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 annual dividend every year for half a century.
Even better, its current yield is one of the highest in the S&P 500, and the company has raised the payout at an 18% average annual rate over the past five years. ABBV's dividend yield of 4.8% is several times better than the S&P 500 average of about 1.3%.
Most recently, however, Berkshire Hathaway has slimmed its position. The holding company sliced 29% off its AbbVie stake in Q3, unloading 6.1 million shares. That follows a reduction of 10%, or 2.3 million shares, in Q2, as well as a 10% cut to the position in Q1. AbbVie now accounts for 0.5% of Berkshire's equity portfolio, down from 0.8% at the end of Q1.
Amazon.com has been a winner for Warren Buffett for most of the time since he first bit into the e-commerce giant in early 2019. However, like other AMZN shareholders, Berkshire is putting up with a rare bout of underperformance.
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 87% since the end of Q2 2019, versus 66% returns for the broader market.
That said, Amazon stock is up just 9% in 2021 versus 26% total returns for the S&P 500.
That's OK. If Buffett really feels like it, he can deflect the blame to one of his lieutenants.
Even before Berkshire Hathaway submitted its Q1 2019 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)."
That said, Buffett has long been an admirer of Amazon CEO Jeff Bezos, he admitted in an interview. He also copped to wishing he had bought the stock sooner.
"Yeah, I've been a fan, and I've been an idiot for not buying (AMZN shares)," Buffett told CNBC.
Berkshire holds an insignificant 0.1% of Amazon's shares outstanding to barely keep it within the top 100 shareholders. Interestingly, Buffett marginally reduced the position by 4,000 shares in Q1 2020, but he hasn't touched the stake since.
Warren Buffett made quite the splash in fall 2020 when he finally dove head-first into the Snowflake 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 nearly 5,000 customers, 116 of which are 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. And the stock is heating up after a weak start to the year, outperforming the S&P 500 37%-26%.
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). Also like Mastercard, Buffett wishes Berkshire had bought more.
And like Mastercard, Buffett's Visa position got a little smaller in Q3 2021. The stake in V was nipped by 4%, or 425,000 shares.
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 total return of 964%, well more than double the S&P 500's 407% total return in that time.
Visa also is a dividend-growth machine, ramping up its payout by 127% 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 0.7% of Buffett's portfolio. Meanwhile, Berkshire's half-percent stake in Visa doesn't even put it among the top 25 investors.
Kroger is quickly becoming one of the most favored among Buffett's stocks, with the Oracle topping up his position by more than a fifth during the second quarter of 2021 after adding a huge chunk in Q1 too.
Berkshire Hathaway turned a few heads during the fourth quarter of 2019, when it initiated its 18.9 million-share position in Kroger. But given what was to come, it now looks like a savvy pick.
After all, the massive supermarket chain treated shareholders well during the worst of the pandemic and has continued to outperform in 2021. Indeed, shares are up by nearly 37% year-to-date with dividends included.
Kroger operates roughly 2,750 retail food stores operating under such banners as Dillons, Ralphs, Harris Teeter and its namesake brand, as well as 1,585 gas stations and even 170 jewelry stores under banners including Fred Meyer Jewelers and Littman Jewelers.
And Buffett is extremely interested in owning more and more of KR.
BRK.B added 10.7 million shares, or 21%, to his Kroger position in Q2. That followed the purchase of 17.5 million shares – a 52% increase in the position – during Q1.
With nearly 62 million shares total, Berkshire Hathaway is the third-largest owner of Kroger shares, with its 8.3% interest coming behind only BlackRock (10.2%) and Vanguard (9.4%).
It's only a middle-of-the-pack position at just 0.8% of Berkshire's equity assets. But the old-economy value play is a natural Buffett stock, right line line with the Oracle's traditional interests.
Berkshire bought Verisign – 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 well in the past year, up just 21% versus the S&P 500's 32%. But it has raced ahead by 516% since the start of 2013, which is well ahead of the S&P 500's 291% total return.
VRSN also is a teachable example of how stocks aren't good or bad in a bubble. One investor's brilliant purchase often is, depending on timing, another investor's biggest failure.
Stanley Druckenmiller, a famed former hedge fund manager, didn't have nearly as much luck with Verisign. Druckenmiller made a $200 million short on tech stocks in early 1999 while investing for George Soros' Quantum Fund, but lost $600 million in the trade.
He then tried to win it back via a big $6 billion buy-in of tech stocks including Verisign ... but he lost $3 billion in six weeks as VRSN and several other recent purchases flopped, making it one of the "smart money's" worst stock calls of all time.
Berkshire Hathaway currently is the largest institutional investor in VRSN shares. It owns a little less than 13 million shares, giving it 11.4% control in the company.
Chevron is the only energy stock left in the Dow Jones Industrial Average after Exxon Mobil (XOM) was removed in 2020. It's also the sector's sole representative among Warren Buffett's stocks.
And Buffett can't seem to make up his mind about whether he likes or loathes CVX.
Berkshire Hathaway initiated a position of more than 48 million shares in the fourth quarter of 2020 valued at $4.1 billion.
Chevron specifically was well positioned, as it took advantage of the worst of the industry's woes in July 2020 by acquiring Noble Energy in a $5 billion all-stock transaction. The company's scale, asset quality and reserves make it one of the healthiest players in an industry where a lot of players are on injured reserve.
Also noteworthy is a 5%-plus yield at current prices. And that stands out all the more given that a slew of oil and gas firms had to slash or suspend their dividends in 2020. Chevron, meanwhile, has raised its quarterly payout for 34 consecutive years, including a 4% improvement announced in April to $1.34 per share.
And yet, Buffett reversed course in Q1 2021. In addition to booting Suncor Energy (SU) from the portfolio, Berkshire jettisoned a little more than half of its CVX position, unloading 24.8 million shares. He followed that up by dropping another 550,000 or so shares, or 2%, in Q2, to bring the position down to 23.1 million shares.
But Buffett flipped the script again in Q3, adding 28.7 million shares, or 24%, to his position.
The stake isn't nothing – CVX makes up nearly 1% of the Berkshire portfolio and is still a top-15 position. Meanwhile, at 1.5% of Chevron shares, Berkshire is the firm's sixth-largest investor.
Although energy prices weren't expected to make huge moves 2021 after a considerable rebound in late 2020, the outlook for oil and gas was much improved and expected to get better as the global economy recovered.
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.
And it's also yet another Buffett stock 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 4.2 million shares as of Berkshire's most recent 13F, including a million-share reduction (or 19%) in Q3 2021.
Charter remains a decent position in the Berkshire Hathaway portfolio, at a little more than 1% of its equity assets.
Charter Communications (CHTR)
Berkshire technically has three different investments in satellite-radio leader Sirius XM Holdings.
Not only does it hold a slug of SIRI shares – it also has positions via two different tracking stocks: Liberty Sirius XM Group Series A (LSXMA) and Liberty Sirius XM Group Series C (LSXMK) tracking stock.
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 participate in the performance of Liberty's Sirius XM investment directly rather than get it piecemeal through Liberty Media itself.
While that stake has largely been left alone over the past few quarters, Buffett decided to amplify his Sirius bet by tacking on another 20 million or so shares of LSXMA, or a 35% bump from the second quarter of 2021.
Berkshire is the largest institutional shareholder in each of the tracking stocks, holding 15.3% of Liberty Sirius XM's C shares and 19.2% of the A shares.
Sirius XM Holdings (SIRI)
20,207,680 / 43,208,291
$1,026,145,990 / $2,051,097,000
Warren Buffett first took a stake in General Motors in early 2012. And over the past few years, he became even more bullish on the world's fourth-largest auto manufacturer by production, upping Berkshire Hathaway's holdings in 2018, 2019 and as recently as Q3 2020.
But lately, Buffett has started to distance himself.
Berkshire reduced its ownership in the car company by another 10% in Q2, or 7 million shares. That follows cuts of 5.5 million shares (7.6%) in the first three months of 2021, and 7.5 million shares (9.0%) during the final quarter of 2020.
General Motors has always looked like a classic Buffett value bet. After all, there are fewer American brands more iconic than GM. He also has sung the praises of CEO Mary Barra on several occasions. And the stock perennially trades at crazy-cheap multiples of expected earnings.
But with shares up nearly 260% since the COVID bottom, maybe it was time to take a little more off the top of a profitable investment – even if analysts still like the valuation and potential for resumption of income.
"On valuation, GM shares appear favorably valued based on most standard valuation metrics," writes Argus Research analyst Bill Selesky, who rates GM at Buy. "We also expect the company to soon reinstate its dividend."
Then there's the matter of allocation. Thanks to GM stock’s strong price performance, it still accounts for almost 1.1% of Berkshire Hathaway's total equity portfolio, down from 1.4% before Buffett's most recent trimming.
General Motors (GM)
Bank of New York Mellon truly stands apart from the pack.
Warren Buffett has been an admirer of BNY Mellon for some time, and despite his dwindling love for banks, he has largely left his BK stake alone.
He did trim the position a little in Q2 2020, but that's nothing compared to the heavy-handed haircuts that Berkshire's other bank holdings have suffered over the past few quarters.
Bank of New York Mellon is a custodian bank that holds assets for institutional clients and provides back-end accounting services.
Its roots actually go all the way back to 1784, when Bank of New York was founded by a group including Alexander Hamilton and Aaron Burr. Today, BK is the nation's ninth-largest bank by assets, according to data from the Federal Reserve.
Bank of New York Mellon (BK)
Berkshire Hathaway first took a position in BK back during Q3 2010, when it paid an estimated average price of $43.90. Since then, Berkshire Hathaway has become the bank's largest investor at 8.4% of shares. (Vanguard is No. 2 at 8.0%.)
DaVita was a largely undisturbed holding in the Berkshire Hathaway equity portfolio, at least up until in 2020.
Then Buffett snipped 1% of his stake in the kidney care provider and dialysis center operator in Q1 2020. He cut it by another 5% in Q3.
But Buffett has left the position alone in 2021.
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.
For now, Buffett is DaVita's largest shareholder by a country mile. Its stake of 36.1 million shares represents a little more than a third of the company's shares outstanding. And DVA remains a top-10 holding in the Berkshire Hathaway equity portfolio.
DaVita's shares have been a disappointment, however. DVA has underperformed the S&P 500 by roughly 167 percentage points since Q1 2012, including a 9% loss in 2021.
U.S. Bancorp 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 and, at least historically speaking, has rarely touched the position. But he clipped it by another 1% in Q3, or by 2.5 million shares, following trimmings of 0.6% and 1.1% in Q2 and Q1, respectively.
Scraping just a bit off the USB stake stands in stark contrast to what Buffett has done with so many of Berkshire's other bank stocks, however. Mostly, he's taken a hatchet to them. And it's not like the regional lender's returns have justified holding on when Buffett has abandoned so many of its peers.
True, USB's total return beats the broader market by 6.6 percentage points so far in 2021, but it lags considerably over the past three-, five-, 10- and 15-year periods.
U.S. Bancorp shareholders no doubt appreciate Berkshire's vote of confidence. The holding company's 8.5% stake makes it the largest institutional shareholder, ahead of Vanguard (7.3%) and BlackRock (6.3%).
U.S. Bancorp (USB)
Verizon, the only telecommunications company in the Dow Jones Industrial Average (.DJI), is a beloved staple of long-term dividend investors everywhere. That's why it looks so at home in Berkshire Hathaway's portfolio.
And Buffett is warming to it.
Berkshire and Buffett initiated a brand-new stake in VZ in Q4 2020, picking up almost 146.7 million shares valued at $8.69 billion. In one fell swoop, the telco accounted for a sizable 3.2% of Berkshire's total equity portfolio value.
That position got a little bigger in Q1 2021, as Warren Buffett added more than 12 million shares, improving the stake by 8%. VZ's percentage of assets has slipped a bit, but still remains a hefty 2.9% weighting. Berkshire also remains the fourth-largest owner of VZ shares at 3.8%, behind institutional investors Vanguard (7.9%), BlackRock (7.0%) and State Street Global Advisors (4.0%).
Bulls like Verizon for both its growth prospects in the era of 5G networking, its defensive characteristics and the reliable income stream it delivers to investors.
"With a safe dividend yield and low leverage, we believe the market favors Verizon's 5G strategy and simpler story," say Raymond James equity research analysts. "Whether we are in an expansion or a contraction, consumers' internet and mobile plans may be the last thing they're willing to give up when times get tough."
Moody's 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 7.2%.)
The holding is meaningful on Berkshire's end, too. At nearly 3% of assets, Moody's is one of the top 10 Buffett stocks.
Warren 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 fifth-largest stock investment with a market value of nearly $12 billion.
But it has been a dog, and Buffett likely still regrets his participation in what was one of his biggest deals of the past decade.
Berkshire Hathaway recorded a $3 billion non-cash loss from an impairment of intangible assets in 2018, "arising almost entirely from our equity interest in Kraft Heinz," Buffett wrote in his 2019 letter to shareholders.
In early 2019, KHC wrote down the value of its brands by nearly $15 billion. In 2020, Fitch downgraded the company's debt to junk status. Its second-quarter earnings beat expectations, but Kraft still had to record yet another $2.9 billion in impairments.
"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 are still down more than 30% since Sept. 30, 2015.
Berkshire Hathaway remains the company's second-largest shareholder with a 26.6% stake. Private investment firm 3G Capital – who teamed up with Berkshire in 2013 to purchase H.J. Heinz – is tops at 44.3%.
Kraft Heinz (KHC)
Kraft's operational performance has at least improved since then, but its shares have gone back to lagging the broader market. KHC still has a lot of catching-up to do to shed its "dud" status in the Berkshire Hathaway equity portfolio.
Buffett, an unabashed fan of Cherry Coke, started investing in Coca-Cola 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, and Coca-Cola remains among the most iconic of Buffett stocks.
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 128% total return over the past decade is well behind the S&P 500's 354% return – it has been an income investor's dream. The beverage maker has increased its dividend annually for 59 years.
American Express continues to endure as one of Warren Buffett's favorite investments.
Buffett likes to say this his preferred holding period is "forever," and AmEx is one of the premier examples. Berkshire entered its initial stake in the credit card company in 1963, when a struggling AmEx badly needed capital.
Buffett obliged, getting favorable terms on his investment. He has played the role of white knight many times over the years, including during the 2008 financial crisis, as a means to get stakes in good companies at a discount. (Think: Goldman Sachs and Bank of America.)
No one would've been surprised if Buffett had trimmed his AXP position sometime during the course of 2020. After all, Berkshire dumped financial stocks all year, and he even trimmed his stakes in payments processors during Q2.
American Express is both. And yet the position remained fully intact across the year.
Berkshire Hathaway, which owns 19.1% of American Express' shares outstanding, is by far the company's largest shareholder. No. 2 BlackRock owns 6.0%.
Buffett praised the power of AmEx's brand at Berkshire's 2019 annual meeting. "It's a fantastic story, and I'm glad we own 18% of it," he said. Of course he's glad: A roughly 1,630% total return over the past quarter-century would make most investors glow.
American Express (AXP)
Buffett spent most of 2020 hacking and slashing at his various bank-stock holdings. But he remained as committed as ever to Bank of America.
Buffett's interest in BAC dates back to 2011, when he swooped in to shore up the firm's finances in the wake of the Great Recession.
In exchange for investing $5 billion in the firm, Berkshire received preferred stock yielding 6% and warrants giving Berkshire the right to purchase BofA common stock at a steep discount. (The Oracle of Omaha exercised those warrants in 2017, netting a $12 billion profit in the process.)
Warren Buffett let go of 2.2 million BAC shares in Q4 2019, but that represented a mere 0.2% reduction. And while he cut heavily into various bank holdings in 2020, he actually added to Berkshire's already large position in Q3 of that year by snapping up more than 85 million shares.
The stake in BAC, worth more than $41 billion, accounts for 14.6% of the holding company's total portfolio value. Meanwhile, Berkshire is Bank of America's largest shareholder, at 12.0% of its shares outstanding.
Bank of America (BAC)
Warren Buffett absolutely adores Apple, but even he decided to take a little bite out of BRK.B's stake at the end of 2020.
Berkshire Hathaway sold off 57.2 million shares, or 6% of its AAPL stake, during the final quarter of 2020. But that likely had little to do with a lack of faith in the iPhone maker.
Call it a hunch.
"I don’t think of
Apple as a stock,"
Buffett has said
"I think of it as
our third business."
It might as well be. Even after its Q4 share sales, the tech giant still represents more than 40% of assets in the Berkshire Hathaway equity portfolio. And Berkshire remains Apple's third largest investor with an 887 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.
The Oracle of Omaha has only occasionally dabbled in technology stocks. But he bought Apple with two fists, and he's more than happy to discuss his ardor for AAPL. As he has said more than once on CNBC, he loves the power of Apple's brand and its ecosystem of products (such as the iPhone and iPad) and services (such as Apple Pay and iTunes).
"It's probably the best business I know in the world," Buffett said a year ago. "And that is a bigger commitment that we have in any business except insurance and the railroad."
It's likely that Buffett was merely taking profits on what has been an exceptionally fruitful investment. AAPL shares have returned 494% since the end of Q1 2016, when Berkshire initiated its stake. That's more than three times better than the broader market.