To invest like Warren Buffett, start with these stocks.
Famed investor and Berkshire Hathaway (ticker: BRK.A, BRK.B) CEO Warren Buffett has become a living legend on Wall Street for his practical value investing style and his tremendously consistent track record throughout the decades. Generations of investors have emulated the “Oracle of Omaha.” Buffett started investing at age 11, and over the years he has turned a $114 investment into about $87 billion. This year has brought some problems for Berkshire’s portfolio, which saw its value plunge from $248 billion to $180 billion in the first quarter alone. The good news? The stock market has bounced back, and with it, so has Berkshire’s portfolio, which was worth more than $245 billion through Sept. 30. Here’s a look at the entire Berkshire Hathaway portfolio through the end of the third quarter, excluding two very small positions in index-tracking exchange-traded funds SPDR S&P 500 ETF (SPY) and Vanguard 500 Index Fund ETF (VOO).
AbbVie (ABBV)
AbbVie is one of the new positions the Omaha, Nebraska-based conglomerate entered into last quarter, as Buffett and his presumed stock-picking successors, Ted Weschler and Todd Combs, began buying more heavily into the health care sector. With such a large portfolio, sector and industry allocation becomes very important, and thus far one of the themes for 2020 has been Berkshire’s wholesale abandonment of the troubled airline industry in favor of more health care and tech stocks. AbbVie, one of the largest drugmakers on earth, is a safe and steady bet, making a number of blockbuster drugs like autoimmune treatment Humira and leukemia treatment Imbruvica. As a so-called “dividend aristocrat,” ABBV has now raised its dividend payment annually for almost 50 straight years. The stock’s current dividend yield sits at more than 5%.
Holdings: 21.26 million shares
Value of Berkshire’s holdings: $2.11 billion
Amazon.com (AMZN)
By the time Berkshire invested in Amazon for the first time in 2019, the e-commerce and cloud computing giant was nearly 25 years old and valued at more than $1 trillion. The company generated 49% of all U.S. e-commerce sales in 2018, capturing 5% of market share in the U.S. retail sector along the way. Amazon is also the parent company of video game streaming platform Twitch, cloud services platform Amazon Web Services and grocery chain Whole Foods. Its Alexa-enabled smart speakers and TVs are becoming ubiquitous as well. AMZN stock is up about 380% in the past five years and up nearly 70% year to date through mid-November. Buffett likely wishes he owned more of AMZN, one of the portfolio’s standout performers during the pandemic.
Holdings: 533,300 shares
Value: $1.7 billion
American Express Co. (AXP)
American Express is a global credit card, payments and travel company headquartered in New York City. Founded in 1850, American Express has been a Buffett holding since 1991. AXP stock initially struggled in the early days of the pandemic, with shares down about 30% year to date through early May as consumer spending fell. That said, Berkshire held through the pain, and shares have already regained the bulk of those losses. In previous annual letters to Berkshire shareholders, Buffett has remarked that American Express is one of Berkshire’s core holdings for the long haul, and AXP stock, which trades for about 17 times forward earnings, is the fourth-largest position in Berkshire’s portfolio. Buffett’s company owns 18.8% of American Express.
Holdings: 151.6 million shares
Value: $17.1 billion
Apple (AAPL)
Best known for its popular MacBooks and iPhones, Apple is one of the largest publicly traded stocks on Wall Street, with a market cap around $2 trillion. Essentially a must-own stock for any massive fund — and also an extremely well-run and profitable company — Apple stock is far and away the largest single holding in Berkshire’s portfolio. Berkshire’s more than $115 billion stake in Apple amounts for about 46% of Berkshire’s total portfolio. Although Buffett’s conglomerate sold about $4.4 billion in AAPL shares last quarter, that’s peanuts compared to its total stake, and it was likely done simply to take some profits and rebalance.
Holdings: 964.7 million shares
Value: $115.9 billion
Axalta Coating Systems (AXTA)
Axalta Coating Systems is the global leader in auto and industrial coatings, generating anywhere from $3 billion to $5 billion in annual revenue. Axalta is also the fourth-largest producer of coatings in the world. Initially, the famously cyclical auto market was one of the hardest-hit areas in the pandemic, which reduced demand from original equipment manufacturers for AXTA’s coatings. Thankfully, demand has been quickly recovering, and shares are already up more than 100% from their 52-week lows. Although headquartered in Philadelphia, Axalta’s roots go back to Germany in 1866 when Herberts Gmbh began coating carriages before transitioning to automobiles. Berkshire has nearly a 10% stake in AXTA, and it trimmed its position very slightly last quarter, selling about 2% of its previous holdings.
Holdings: 23.4 million shares
Value: $654 million
Bank of America Corp. (BAC)
With a market cap around $232 billion, Bank of America is the second-largest U.S. bank and is also Buffett’s second-largest public stock holding. Buffett acquired his stake in Bank of America in 2011 when he took a $5 billion stake in preferred BAC stock while the bank was struggling with liquidity. After teetering on the brink of collapse during the Great Recession, BAC is now a much lower-risk investment given its strong capital base. Shares are down more than 20% in 2020, but the Federal Reserve and U.S. Treasury’s unprecedented willingness to prop up the economy makes BAC a much less risky holding than it would be otherwise. One of Buffett’s defining characteristics as an investor has been his bullishness on the financial sector. And while Berkshire surprisingly slashed its exposure to several major bank stocks last quarter, BAC wasn’t one of them: Berkshire actually increased its position in Bank of America by about 9% last quarter.
Holdings: 1.03 billion shares
Value: $27.7 billion
Bank of New York Mellon Corp. (BK)
Bank of New York Mellon operates in more than 100 markets. The New York City-based bank has $38.6 trillion in assets under custody and $2 trillion in assets under management. Its two primary business lines are investment services and investment management. The company’s stock is down about 20% year to date as the pandemic and the rock-bottom interest rates that came with it have been a drag on the financial sector. Berkshire owns around 8.4% of all BK shares, which trade for less than nine times earnings. Like most of the other bank stocks Buffett owns, BK stock also pays a respectable dividend — yielding 3.2%.
Holdings: 74.3 million shares
Value: $2.9 billion
Barrick Gold Corp. (GOLD)
In an uncharacteristic foray into the world’s favorite precious metal, Berkshire bought Canadian gold and copper miner Barrick Gold in the second quarter of 2020. Buffett is famously hostile toward gold, once saying when asked about its price prospects, “I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you.” Buffett’s point is that gold has no clear intrinsic value, and it doesn’t pay dividends or churn out earnings — it’s not a productive asset. The addition of Barrick Gold, although not a huge part of its portfolio, indicates Berkshire is treating its massive portfolio more like a traditional fund, and gold is a classic hedge against a struggling economy and weakening U.S. dollar.
Holdings: 12 million shares
Value: $290 million
Biogen (BIIB)
Biogen is one of the handful of positions Berkshire Hathaway added to its sprawling portfolio in 2020. Biogen is a Cambridge, Massachusetts-based biotech. It’s not exactly an industry Buffett has been known for, but health care is a growing part of the portfolio this year. Although it’s a relatively small part of the Berkshire pie, this is likely a starter position that will be prone to grow over time. To be sure, Biogen isn’t expected to post blockbuster growth in the coming years, but it does trade for just eight times earnings and boasts an enviable pipeline, with several mid- to late-stage trials currently in the works. Biosimilars, known as biologic medical products, have been a bright spot at BIIB, and should continue to exhibit strength going forward.
Holdings: 643,022 shares
Value: $157 million
Bristol-Myers Squibb (BMY)
Of the new additions to Berkshire Hathaway’s portfolio in the third quarter, four were well-established global drugmakers worth between $140 billion and $210 billion with dividend yields of more than 2.5%. Bristol-Myers Squibb is one of the lucky four, and it’s also one of the more exciting of the four, growth-wise. BMY completed the acquisition of Celgene in 2019, doubling down on cancer treatments as it acquired Celgene’s blockbuster oncology treatment drug Revlimid, which was alone responsible for more than $3 billion in sales last quarter, up 10% year over year. Analysts expect earnings per share growth of roughly 17% in 2021 from BMY.
Holdings: 30 million shares
Value: $1.8 billion
Charter Communications (CHTR)
Charter Communications is the second-largest cable TV provider in the U.S., and it’s the best pure-play option for investors who still see value in the traditional TV model. Facing stiff competition from streaming leaders such as Netflix (NFLX), Charter has a customer base of 16.2 million video customers, 28.6 million internet subscribers and 10.5 million phone subscribers. Charter primarily operates in New York, California, the Carolinas, Florida, Ohio and Texas. Despite fears over cord cutting, CHTR shares have added more than 34% year to date. Charter is currently the tenth-largest holding in Berkshire’s equity portfolio.
Holdings: 5.2 million shares
Value: $3.4 billion
Coca-Cola Co. (KO)
Coca-Cola is the largest and most valuable soda brand in the world, capturing the top spot in both the global carbonated soft drink market and the U.S. market for decades now. Coca-Cola is a truly global company, generating the majority of its profits outside the U.S. Top brands include Coca-Cola Classic, Sprite, Fanta and Minute Maid. Buffett has been a longtime fan of Coca-Cola, first investing in the stock in 1987. Berkshire’s cost basis in KO stock is $1.28 billion, meaning its current $21 billion stake represents more than 1,500% in gains. Today, KO stock pays a 3.1% dividend yield. The third-largest position in the entire portfolio behind only Apple and Bank of America, Berkshire owns 9.3% of the company through its sizable stake.
Holdings: 400 million shares
Value: $21 billion
DaVita (DVA)
DaVita is the U.S. leader in dialysis, operating more than 2,700 outpatient dialysis clinics and serving more than 200,000 patients domestically. In 2019, DaVita completed the sale of its DaVita Medical Group subsidiary to UnitedHealth Group (UNH) for $4.3 billion. DaVita has used the proceeds to pay down debt and aggressively increase share buybacks, leading to an impressive market-beating performance in the last year. Through mid-November, year-to-date gains stood around 42%. Despite that, DVA stock still trades at a forward earnings multiple of less than 14. Last quarter, Berkshire sold 2 million shares, or about 5%, of its stake in DaVita. Don’t take that as a sign Buffett has stopped believing, though: Among all the companies in its portfolio, Berkshire controls the largest percentage of DaVita’s outstanding stock, boasting a roughly 32.2% stake in the entire company.
Holdings: 36.1 million shares
Value: $3.9 billion
General Motors Co. (GM)
General Motors is one of the world’s largest automakers, with sales of more than $115 billion in the last year. Yet another of Buffett’s holdings that looked shaky at best in the first quarter, the Oracle’s famous patience did him well, as he sat on his hands and waited out what has been a mere bump in the road for the auto industry. GM briefly dipped into the red in the second quarter, but it quickly emerged to post a more than $4 billion profit in the third quarter. GM is refocusing its business on trucks and SUVs and is also investing heavily in electric and autonomous vehicle technology, which seems savvy over the longer term. Berkshire boosted its stake by 5 million shares, or roughly 7%, last quarter.
Holdings: 80 million shares
Value: $3.4 billion
Globe Life (GL)
Globe Life, which was known as Torchmark until it rebranded itself last August, is a life and supplemental health insurance company that focuses primarily on the low- to middle-income market. Globe Life is headquartered in McKinney, Texas, and has about 3,100 employees. Revenue grew 5% in 2019 and similar degrees of slow but steady growth are expected in 2020 and 2021 as well. Buffett likely appreciates the company’s stable earnings, solid balance sheet and free cash flow. In addition, its forward earnings multiple is less than 13. Berkshire owns a 6.1% stake in the company and left its position in GL unchanged last quarter.
Holdings: 6.4 million shares
Value: $584 million
Johnson & Johnson (JNJ)
Johnson & Johnson is a global health care company that develops and markets pharmaceutical products, medical devices and consumer health products. The company’s leading brands include Band-Aid, Neutrogena, Splenda and Tylenol. JNJ stock trades at a reasonable 16 times forward earnings multiple. Why Berkshire’s exposure to a stock as stable and cash-rich as JNJ is so small is a mystery, but it is: This position makes up 0.02% of the financial giant’s stock portfolio. Johnson & Johnson could end up being a meaningful part of the solution to the pandemic; it’s committed to providing 100 million doses of its vaccine to the U.S. government at cost, should its candidate be approved while the pandemic is still raging. Its goal is to ramp up manufacturing activities to be able to produce 1 billion doses globally.
Holdings: 327,100 shares
Value: $47 million
JPMorgan Chase & Co. (JPM)
The only stock Buffett completely eliminated from Berkshire’s portfolio last quarter was warehouse membership chain Costco (COST). But JPMorgan Chase was the next-closest to being cast out, as Berkshire sold an incredible 95% of its JPM stake in the period. It’s arguably the most surprising move that was made last quarter, as Buffett is famously a fan of banks and Berkshire was content to increase its stake in Bank of America. The company rarely comments on the impetus behind such moves until months or years later, but it’s a tad disconcerting for JPM shareholders. In the meantime, JPMorgan is still the most valuable bank in the U.S., seems to be doing well and is run by Wall Street legend Jamie Dimon. It trades for less than 13 times forward earnings and pays a 3.1% dividend.
Holdings: 967,267 shares
Value: $111 million
Kraft Heinz Co. (KHC)
Kraft Heinz is Berkshire’s fifth-largest equity holding. The 26.6% stake in the food giant is objectively huge and means the only company in its portfolio Berkshire has more voting control over is DaVita. Often even a 5% to 10% stake in a public company is enough to get a board seat, so Berkshire could exert quite a lot of sway over Kraft Heinz if it so desired. That said, as a passive and hands-off investor, taking an activist bent with KHC is unlikely to happen with Buffett. Still, perhaps the owner of the Kraft and Oscar Mayer brands could use some guidance; shares are trading for about one-third their all-time highs in 2017. KHC now pays a 5% dividend.
Holdings: 325.6 million shares
Value: $10.2 billion
Kroger (KR)
Kroger is one of the newer stocks in the Berkshire Hathaway portfolio, with the position initiated in the first quarter of 2020. Kroger is certainly the type of boring, low-tech company that Buffett might like to “buy and hold” for the long term. While grocery is indeed an industry experiencing steeper competition and a certain level of disruption, Kroger is well-positioned within the industry and does something Buffett and vice chairman Charlie Munger love: It pays a decent, sustainable dividend with room to grow. In fact, Kroger has a track record of boosting its payout, growing its quarterly dividend annually for the last 13 years. The stock currently yields a respectable 2.2%; Berkshire bought more KR in the third quarter, increasing its stake to 3.2%.
Holdings: 25 million shares
Value: $821 million
Liberty Global (LBTYA, LBTYK)
Liberty Global has multiple share classes and Buffett is invested in both. Liberty is the largest cable TV operator in Europe, operating primarily in the U.K., Belgium and eastern Europe. LBTYA A-class shares have voting rights, but LBTYK C-class shares do not. As a result, the A-class shares trade at a slight premium, although both stocks are more or less sideways year to date. In the full context of Berkshire’s total holdings, this is a relatively small position that’s unlikely to move the needle for Berkshire’s own stock in any substantial way. Berkshire trimmed its stake in LBTYA by 6% in the third quarter.
Holdings: 18 million shares of LBTYA, 7.3 million shares of LBTYK
Combined value: $579 million
Liberty Latin America (LILA, LILAK)
Liberty Latin America is another member of the Liberty Media family with multiple share classes. Liberty Latin America split off from its parent company in 2018 and is a pure play on the telecommunications business in Latin America and the Caribbean. The spinoff serves 7.6 million homes in the region, has 3.6 million mobile subscribers and generates annual revenue of $3.9 billion. Buffett holds both the A-class voting shares and the C-class nonvoting shares.
Holdings: 2.6 million shares of LILA, 1.4 million shares of LILAK
Combined value: $47 million
Liberty Sirius XM Group (LSXMK, LSXMA)
Liberty Sirius XM Group Series C and A are tracking stocks representing Liberty Media’s equity stake in Sirius XM Holdings (SIRI). Series A shares have voting rights, whereas Series C shares do not. The tracking stocks represent a 71.2% ownership stake in Sirius XM, but they also hold more than $1 billion in debt of streaming leader Pandora Media and terrestrial radio leader iHeartMedia (IHRT). The tracking stocks trade at a deep discount to the value of their underlying assets, and Sirius XM has been aggressively buying back shares of its stock. Here, Berkshire’s holdings are more meaningful, topping $2 billion when combined. It also has meaningful ownership percentages in each company.
Holdings: 43.2 million shares of LSXMK, 14.9 million shares of LSXMA
Combined value: $2.5 billion
Mastercard (MA)
Along with Visa (V) and American Express, Mastercard rounds out Buffett’s exposure to the three dominant forces in the global credit card business. The Mastercard network includes billions of customers and millions of merchants in more than 210 countries. Mastercard operates both the third-largest credit and debit networks by volume, according to The Nilson Report. Mastercard has the highest forward earnings multiple of the three credit card stocks, at 40. MA stock is up about 12% year to date, outperforming both Visa and American Express.
Holdings: 4.6 million shares
Value: $1.5 billion
M&T Bank Corp. (MTB)
M&T Bank is a U.S. regional bank based in Buffalo, New York, that has more than $127 billion in total assets. M&T is relatively small compared with some of the other banks Buffett owns, barely cracking the Fortune 500 at 438. M&T primarily focuses on commercial and residential real estate, and it was one of only two banks in the S&P 500 not to lower its dividend during the 2008 financial crisis. M&T shares have been meaningfully hit by the pandemic in 2020, with shares down about 25% to date. Thankfully, this is a relatively small holding for Berkshire — and it just got smaller. Berkshire sold 35% of its stake in the third quarter.
Holdings: 2.9 million shares
Value: $348 million
Merck (MRK)
Another large-cap drugmaker that Buffett bought in the third quarter was Merck, the Dow Jones Industrial Average component and roughly $200 billion health care giant. It’s not a particularly growth-oriented or sexy stock, with analysts expecting roughly 3% revenue growth in 2020 and 7% growth in 2021. Shares trade for about 17 times earnings and offer a 3.2% dividend, fitting in perfectly with Berkshire’s traditional value-oriented approach to stock picking. Despite overall low growth, there are some exciting parts to Merck’s drug lineup; Merck’s blockbuster Keytruda oncology treatment saw 21% year-over-year revenue growth in the third quarter.
Holdings: 22.4 million shares
Value: $1.8 billion
Mondelez International (MDLZ)
Mondelez International is a U.S. food and beverage company headquartered in Deerfield, Illinois. Mondelez is composed of the international snack and food brands that once belonged to Kraft Foods prior to its 2012 spinoff of its North American grocery business. Mondelez has several billion-dollar international food brands, including Belvita, Chips Ahoy, Nabisco, Oreo and Ritz. Developed markets were solely responsible for Mondelez’s growth in the first three quarters of 2020; at roughly twice the size of its emerging-market segment, the 7.1% growth in developed markets more than offset the 7.2% decline in emerging markets. MDLZ stock has a 2.2% dividend and a reasonable forward earnings multiple of 20.
Holdings: 578,000 shares
Value: $33 million
Moody’s Corp. (MCO)
Moody’s is a major U.S. credit rating agency, providing research, analytical tools and financial recommendations for investors worldwide. Moody’s was founded in 1900 and is headquartered in New York City. Moody’s Investors Services is the company’s credit rating agency that rates both the quality of the debt and the credit quality of corporate and government institutions. Moody’s Analytics offers a range of services and tools that allow investors to quantify and manage risk in global financial markets. MCO stock is up about 15% in the last year, pushing its forward earnings multiple to 26. As a staple of the U.S. financial services industry, this will likely continue to be a meaningful holding for Berkshire for years to come.
Holdings: 24.7 million shares
Value: $6.8 billion
Pfizer (PFE)
The last of the large-cap drugmakers Buffett added to Berkshire’s portfolio in the third quarter was Pfizer, the $200 billion diversified pharmaceutical giant paying a 4.1% dividend. Investors might currently associate PFE with its promising COVID-19 vaccine, developed with German partner BioNTech (BNTX). Although this position is quite small in the context of the broader stock portfolio — it accounts for just 0.1% ownership of Pfizer, and an even smaller percentage of all Berkshire’s holdings — don’t be surprised if this “small” initial purchase is just a proverbial toe in the water, with gradual increases to the position to follow.
Holdings: 3.7 million shares
Value: $133 million
PNC Financial Services Group (PNC)
PNC Financial Services is a U.S. regional bank headquartered in Pittsburgh and one of the largest U.S. banks by deposits. In addition to retail and business banking, the company also offers wealth and asset management services. Like the other bank stocks Buffett owns, PNC has a relatively attractive forward earnings multiple of 16.7 and a generous 3.6% dividend. The regional bank, like many others, has seen shares slide in 2020 as PNC stock is down around 18% year to date. Another financial stock Buffett sold off, Berkshire reduced its position by 64% last quarter.
Holdings: 1.9 million shares
Value: $241 million
Procter & Gamble Co. (PG)
Procter & Gamble is a blue-chip U.S. consumer products company that produces beauty, grooming, health and home care, and baby and family care products. Leading brands include Pampers, Tide, Bounty, Charmin and Gillette. PG stock’s forward earnings multiple of 23 isn’t particularly impressive, but its 2.3% dividend and relatively recession-proof business make it a popular defensive play. As recently as 2016, Buffett had a $4.3 billion stake in PG stock.
Holdings: 315,400 shares
Value: $45.1 million
RH (RH)
RH, the home furnishings retailer formerly known as Restoration Hardware, looked like an attractive investment as the year began, with analysts expecting explosive growth over the next five years and shares trading at a 1.3 price-earnings to growth ratio. That turned out to be true, with RH stock now up an incredible 102% year to date. First-quarter fears surrounding the cyclical economy and the troubled state of U.S. consumers turned out to be overblown, with EPS jumping about 30% year over year in the third quarter. Due to Berkshire’s massive size, it owns about 9% of RH’s entire company, but even that position is a relatively small percentage of Berkshire’s portfolio.
Holdings: 1.7 million shares
Value: $737 million
Sirius XM Holdings (SIRI)
In addition to his stake in the Liberty Media Sirius XM tracking stock, Buffett also has a direct investment in Sirius XM. Sirius XM is a satellite radio operator that offers more than 140 channels of music and talk radio throughout the U.S. In early 2019, Sirius XM completed a $3 billion buyout of streaming radio leader Pandora Media, giving the company a large stake in both the streaming and satellite radio markets. Pandora has 58.6 million monthly active users, and Sirius XM has 30.5 million self-pay subscribers.
Holdings: 50 million shares
Value: $320 million
Snowflake (SNOW)
In another sign that Berkshire is moving beyond its classic value investing philosophy, it actually bought a richly valued tech stock — and at the time of its initial public offering, no less. With IPOs often overpriced, Buffett has tended to bide his time before buying into positions in the past, but everything about Berkshire’s stake in this cloud-based data warehousing company shows Buffett’s successors are increasingly exercising more influence over portfolio decisions. Arguably the fairest criticism of Berkshire’s portfolio in years past was its willing underexposure to tech stocks, especially those with huge growth potential. Snowflake, which grew revenue 121% in its last quarter, falls into that category.
Holdings: 6.1 million shares
Value: $1.6 billion
StoneCo (STNE)
StoneCo is a Brazilian financial technology company founded in 2012 that specializes in electronic payments. StoneCo had an IPO in October 2018, and now trades for almost three times its $24 IPO price. STNE has been one of the few growth stocks to grab Buffett’s attention, and despite the virus’ spread in Brazil this year, where the company has at least an 8% market share, the stock recently hit all-time highs and is up more than 70% in 2020.
Holdings: 14.2 million shares
Value: $967 million
Store Capital Corp. (STOR)
Store Capital is a real estate investment trust that specializes in the acquisition, investment, ownership and management of single-tenant net-lease real estate. As a REIT, Store Capital is an excellent source of dividend income, yielding 4.5%. In addition, Store Capital has avoided disruption to its retail tenants by strategically avoiding businesses threatened by e-commerce disruption. Its long-term leases also provide more financial stability than other REITs. The pandemic was initially seen as a major threat to STOR’s previous occupation rate of 99.7%, even though 75% of its tenants had investment-grade credit quality to start the year. In May, STOR shares were down as much as 45% year to date, but as fear has abated and the outlook improves, STOR has erased the majority of those losses, although shares are still down 14% in 2020.
Holdings: 24.4 million shares
Value: $773 million
Suncor Energy (SU)
Suncor is a Canadian oil exploration and production company that produces between 680,000 and 710,000 barrels of oil equivalent per day. Suncor’s production primarily comes from oil sands, but it also has a large conventional oil operation. In addition, Suncor has 460,000 barrels per day in refining capacity. SU shares are down more than 53% year to date as the global oil market slump drags on. Although exposure to Suncor is relatively limited as far as the Berkshire portfolio is concerned, SU’s swift fall still hasn’t been pretty.
Holdings: 19.2 million shares
Value: $293 million
Synchrony Financial (SYF)
Like M&T, Synchrony Financial is a relatively small bank compared with some of the other banks that Buffett owns. Synchrony operates exclusively online with no physical branches. Synchrony specializes in private-label credit card partnerships with companies like Amazon and Lowe’s (LOW), and it was previously a subsidiary of GE Capital before being spun off in 2014. Like many other stocks, SYF has vigorously rebounded from its spring lows, with shares now up more than 140% from its earlier 2020 depths.
Holdings: 20.1 million shares
Value: $598 million
Teva Pharmaceutical Industries (TEVA)
After acquiring Allergan’s generic drug business back in 2015, Teva Pharmaceuticals is now one of the largest generic drug makers in the world. Teva stock was pounded in August 2017, dropping more than 40% in three days when the company reported a huge earnings miss and cut its guidance and dividend. Since that time, management has been on a cost-cutting spree and has prioritized getting the company’s debt levels under control. As a result, Teva’s forward earnings multiple is down to just 3.6, and analysts expect the company to return to modest revenue and operating profit growth in 2021.
Holdings: 43 million shares
Value: $403 million
T-Mobile US (TMUS)
Another third-quarter addition to the Buffett portfolio was T-Mobile. Although not a particularly aggressive bet in terms of size — Berkshire’s initial stake amounts to just 0.2% of its entire portfolio — it’s aggressive in the sense that TMUS is the most growth-oriented and richly valued of the three major carriers. By the end of the third quarter, TMUS stock was already up more than 68% in 2020 alone, and shares have risen further since then. Of course, there’s a reason TMUS has rallied, and last quarter the company added more than 2 million customers, crossing the “100 million customer” milestone, and surpassing AT&T (T) to become the second-largest wireless carrier.
Holdings: 2.4 million shares
Value: $314 million
United Parcel Service (UPS)
United Parcel Service provides air, sea, ground and rail logistics, freight and customs services. UPS has more than “495,000 employees connecting more than 220 nations.” It operates a fleet of 269 airplanes and 125,000 delivery vehicles that deliver an average of 21.9 million daily packages and documents. UPS has greatly benefited from the rise of e-commerce in the past 20 years — and especially the pandemic-driven rise in demand in 2020. UPS, which trades at 20 times forward earnings, is up more than 40% year to date, and it offers investors a 2.4% dividend.
Holdings: 59,400 shares
Value: $9.9 million
U.S. Bancorp (USB)
U.S. Bancorp is the fifth-largest commercial bank in the U.S., with $495 billion in assets. U.S. Bancorp was founded in 1929 and is headquartered in Minneapolis. USB stock has been more than just a market laggard year to date, shedding about 27% as financials have gotten slaughtered. The stock’s forward earnings multiple of 13.9 alongside a dividend yield of 3.9% both look nice, but Buffett will be closely watching the company’s financials for weakness given USB is Berkshire’s seventh-largest equity holding.
Holdings: 149 million shares
Value: $6.3 billion
Verisign (VRSN)
Verisign is a domain-name registration specialist headquartered in Reston, Virginia. Verisign provides internet security services, such as the denial of service protection, iDefense security intelligence services and managed domain-name security. With a gaudy forward earnings multiple of 33, VRSN stock isn’t the typical Buffett value stock. Buffett has always loved market leaders with strong business execution, two areas in which Verisign excels. VRSN stock is up more than 120% overall in the past five years. Berkshire’s $2.5 billion position is good for an 11.2% stake in the company.
Holdings: 12.8 million shares
Value: $2.5 billion
Visa (V)
Buffett feels no need to pick a winner if he likes an entire industry. In 2018, Buffett said payments are a “huge deal” worldwide, and Berkshire has stakes in all the major credit card operators, as well as several smaller financial technology companies. Visa operates the largest electronic payments network in the world, including the world’s largest credit network by volume and the second-largest global debit network. Visa’s forward earnings multiple of around 31 isn’t particularly impressive, but the credit card giant reported 4% year-over-year payments volume growth in its September quarter.
Holdings: 10 million shares
Value: $2.1 billion
Wells Fargo & Co. (WFC)
Headquartered in San Francisco, Wells Fargo has more than $1.9 trillion in assets. The bank has struggled with a series of legal and public relations issues in recent years stemming from overly aggressive marketing practices. Buffett has generally stuck with Wells Fargo through its dark times, although his patience is starting to wear thin; in the third quarter of 2020, Buffett slashed his stake in WFC by 46%. Fed restrictions on expansion, as well as what may be a far too conservative allocation for loan losses, has caused shares to crater this year; WFC is down by more than 50% to date.
Holdings: 127 million shares
Value: $3.2 billion
Berkshire Hathaway’s complete portfolio:
— AbbVie (ABBV)
— Amazon.com (AMZN)
— American Express Co. (AXP)
— Apple (AAPL)
— Axalta Coating Systems (AXTA)
— Bank of America Corp. (BAC)
— Bank of New York Mellon Corp. (BK)
— Barrick Gold Corp. (GOLD)
— Biogen (BIIB)
— Bristol-Myers Squibb (BMY)
— Charter Communications (CHTR)
— Coca-Cola Co. (KO)
— DaVita (DVA)
— General Motors Co. (GM)
— Globe Life (GL)
— Johnson & Johnson (JNJ)
— JPMorgan Chase & Co. (JPM)
— Kraft Heinz Co. (KHC)
— Kroger (KR)
— Liberty Global (LBTYA, LBTYK)
— Liberty Latin America (LILA, LILAK)
— Liberty Sirius XM Group (LSXMK, LSXMA)
— Mastercard (MA)
— M&T Bank Corp. (MTB)
— Merck (MRK)
— Mondelez International (MDLZ)
— Moody’s Corp. (MCO)
— Pfizer (PFE)
— PNC Financial Services Group (PNC)
— Procter & Gamble Co. (PG)
— RH (RH)
— Sirius XM Holdings (SIRI)
— Snowflake (SNOW)
— StoneCo (STNE)
— Store Capital Corp. (STOR)
— Suncor Energy (SU)
— Synchrony Financial (SYF)
— Teva Pharmaceutical Industries (TEVA)
— T-Mobile Us (TMUS)
— United Parcel Service (UPS)
— U.S. Bancorp (USB)
— Verisign (VRSN)
— Visa (V)
— Wells Fargo & Co. (WFC)
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The Complete Berkshire Hathaway Portfolio originally appeared on usnews.com
Update 11/20/20: This story was published at an earlier date and has been updated with new information.
