Berkshire Hathaway’s CEO Warren Buffett remains bullish on his top holdings:
1. Apple: Despite selling over 615 million Apple (NASDAQ: AAPL) shares in the past year, it remains Berkshire Hathaway’s largest holding at $73.5 billion (24.8% of invested assets). Buffett cited low corporate tax rates and pricey stock market conditions for the selling activity, but Apple’s strong share repurchase program continues to impress.
2. American Express: With a value of $45.8 billion (15.4% of invested assets), American Express (NYSE: AXP) is a long-term holding for Berkshire Hathaway. Its dual revenue streams from credit card services and lending make it a standout performer, attracting high-earning customers who remain loyal during economic downturns.
3. Bank of America: Buffett’s selling of Bank of America (NYSE: BAC) shares hasn’t diminished its position as the third-largest holding at $34.8 billion (11.7% of invested assets). He favors bank stocks for their cyclical nature and growth potential, with Bank of America benefiting from interest rate sensitivity.
4. Coca-Cola: Berkshire Hathaway’s longest-held investment since 1988, Coca-Cola (NYSE: KO) is valued at $24.3 billion (8.2% of invested assets). Buffett considers it a forever holding due to its strong geographic diversity, providing stability and consistent returns over the years.
In 2022, Coca-Cola operates globally with a presence in every country, ensuring a steady cash flow in developed markets and driving sales growth in emerging markets. The brand has maintained its top position as the most preferred by consumers for 12 consecutive years, according to Kantar’s annual “Brand Footprint” report. This achievement is attributed to Coca-Cola’s effective utilization of digital media to engage younger audiences and leveraging its rich history and brand ambassadors to connect with more mature consumers.
Chevron, holding a 5.9% share of Berkshire Hathaway’s investment assets, has seen increased prominence in Warren Buffett’s portfolio over the past four years. The integrated oil and gas company benefits from a diversified business model, encompassing upstream drilling, transmission pipelines, chemical plants, and refineries. Chevron’s consistent cash flow has supported its dividend growth for the past 37 years, making it an attractive investment for Buffett.
Occidental Petroleum, accounting for 4.5% of Berkshire’s invested assets, has also drawn Buffett’s interest since 2022. Unlike Chevron, Occidental’s revenue heavily relies on its drilling segment, making it particularly sensitive to changes in crude oil prices. With a higher net-debt position compared to Chevron, Occidental’s financial flexibility is closely tied to crude oil price movements.
Moody’s, holding a 3.9% share in Berkshire’s portfolio since 2000, has been one of Buffett’s most successful investments. Moody’s growth has been driven by its Investors Services segment, providing credit ratings for businesses and government entities. However, with the Federal Reserve implementing significant interest rate hikes, Moody’s Analytics is now facing a changing landscape.
This is the segment that offers solutions to aid businesses in evaluating risk and maintaining compliance with corporate regulations. Kraft Heinz, with an investment value of $9.8 billion accounting for 3.3% of total invested assets, has been a significant investment for Warren Buffett. However, the merger between Heinz and Kraft Foods in 2015 led to Buffett acknowledging that his company had overpaid for Kraft. Despite challenges, Kraft Heinz’s 5.2% yield and focus on consumer staples offer some stability. The company’s diverse product portfolio of over 200 brands enables it to generate consistent operating cash flow, although declining volume and high debt levels present hurdles. On the other hand, Chubb, a property and casualty insurance firm with invested assets worth $7.2 billion (2.4% of total), has been strategically accumulated by Buffett and his team. The insurance industry’s stability and ability to adjust premiums in response to catastrophic events make companies like Chubb reliable moneymakers. Additionally, Chubb stands to benefit from the Federal Reserve’s rate-hiking measures, which have boosted returns on short-term investments. It’s essential to carefully consider investment opportunities beyond popular choices like Apple, as identified by the Motley Fool Stock Advisor team.
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