Warren Buffett, the prominent billionaire investor at Berkshire Hathaway, has been reducing his stock holdings over the past eight quarters, selling off $166.2 billion worth of shares. Despite this trend, one stock that has caught his attention is Domino’s Pizza (NASDAQ: DPZ). Berkshire Hathaway bought 1,277,256 shares of Domino’s stock in the September quarter. Buffett may have been drawn to Domino’s due to its successful marketing strategies, including transparent advertising, loyalty programs, and innovation in products and processes. The company’s growth initiatives under the “Hungry for MORE” plan have also impressed Buffett, with Domino’s on track for its 31st consecutive year of international same-store sales growth.
Terry Smith, known as the “Warren Buffett of the U.K.,” from Fundsmith, decided to invest in tech giant Apple (NASDAQ: AAPL) in 2024. Despite Buffett selling a substantial amount of Apple shares, Smith purchased 224,004 shares of the company. Smith may have been attracted to Apple’s strong capital-return program, including significant stock buybacks that have boosted its earnings per share. Additionally, Apple’s Services segment, with growing revenue, is seen as a positive factor for investors. However, Apple’s stock is considered expensive, trading at around 40 times earnings, which could be a concern unless iPhone sales improve.
Billionaire Philippe Laffont from Coatue Management, known for investing in tech and healthcare, made a surprising move by investing in fast-casual chain Chipotle Mexican Grill (NYSE: CMG) during the third quarter. Coatue purchased 4,575,054 shares of Chipotle. The company’s focus on responsibly sourced ingredients has resonated with consumers, prompting Laffont to make a significant investment in the restaurant chain.
Chipotle Mexican Grill’s management team recognized long ago that its valued customers were willing to pay a premium for higher-quality food, making concerns about increased food costs negligible for the company. Innovation has been a significant driver of its continued success, with the introduction of dedicated mobile-order drive-thru lanes, known as “Chipotlanes,” in 2018 proving particularly advantageous during and after the pandemic.
Similar to Apple, Chipotle’s remarkable prosperity is already reflected in its valuation. Maintaining a forward price-to-earnings (P/E) ratio of 44 alongside mid-to-high single-digit growth in same-store sales may present challenges in the upcoming year.
Chase Coleman, a billionaire asset manager at Tiger Global Management with $23.4 billion in assets under management, tends to invest in high-growth tech and healthcare stocks. During the third quarter, he significantly increased his fund’s stake in Taiwan Semiconductor Manufacturing, adding over 564,000 shares to hold north of 3.6 million shares. Taiwan Semi’s dominance in chip fabrication, particularly in the AI and data center infrastructure spheres, positions it as a strong contender in the evolving tech landscape.
Taiwan Semiconductor’s role extends beyond high-performance computing solutions, as it is a primary supplier of processing chips for Apple’s iPhones and popular CPUs for laptops and desktops. Despite its operational diversity and robust order backlog, the company faces uncertainties surrounding the AI market bubble in 2025, considering the historical patterns of early-stage bubbles in next-big-thing investments.
Bill Ackman, from Pershing Square Capital Management, is another prominent investor who made a significant move by acquiring a substantial stake in Nike during the third quarter. Ackman, known for his activist investing approach, aims to unlock value for shareholders by driving operational changes. Nike, while facing challenges under its former CEO’s leadership, is now focused on returning to its core strengths under new leadership, emphasizing sports products and marketing strategies to regain consumer appeal. The retail turnaround strategy is expected to be a gradual process rather than an immediate transformation.
Nike’s value proposition could see a resurgence in the U.S. and China, with potential for increased sales. In fiscal 2024, the company reported adjusted earnings per share of $3.95. Reaching this level again in the near future would result in Nike having its most attractive forward price-to-earnings ratio in quite some time. This presents an enticing opportunity for investors who may have missed out previously.
For those who feel they may have overlooked the chance to invest in high-performing stocks, an expert team of analysts occasionally issues a “Double Down” recommendation for companies they believe are on the verge of significant growth. This could be the ideal time to consider investing before it’s too late. The data reveals the impressive potential of such investments:
– Nvidia: A $1,000 investment at the time of the “Double Down” recommendation in 2009 would have grown to $363,385.
– Apple: Investing $1,000 following the “Double Down” call in 2008 would have yielded $45,870.
– Netflix: A $1,000 investment after the “Double Down” recommendation in 2004 would now be worth $474,140.
Currently, there are three exceptional companies receiving “Double Down” alerts, offering a rare opportunity that may not come around again soon.
It’s important to note that the returns mentioned are based on Stock Advisor data as of January 6, 2025. Sean Williams does not hold positions in any of the stocks referenced. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Chipotle Mexican Grill, Domino’s Pizza, Nike, Nvidia, and Taiwan Semiconductor Manufacturing. Additionally, The Motley Fool advises on options, such as shorting December 2024 $54 puts on Chipotle Mexican Grill. The publication upholds a disclosure policy to maintain transparency and integrity in its recommendations.
