Warren Buffett - Berkshire Hathaway Portfolio

Warren Buffett - Berkshire Hathaway Q2 2024 Portfolio

Berkshire Hathaway, a hedge fund managed by Warren Buffett, disclosed 41 security holdings in their SEC 13F filing for the second quarter of 2024, with a total portfolio value $279,969,065,000

 

As of Q2 2024, Warren Buffett’s Berkshire Hathaway portfolio highlights strategic shifts across various key holdings. Below is a detailed overview of the top 10 positions:

 

AAPL – Apple Inc.

  • Portfolio Allocation: 30.09%
  • Recent Activity: Reduced holdings by 49.33%.
  • Shares Held: 400,000,000.
  • Reported Price: $210.62 per share.
  • Value at Reported Price: $84,247,999,000.

 

Apple remains the largest holding in Buffett’s portfolio, even after a significant reduction of nearly half of the shares. This substantial cut likely reflects profit-taking while still maintaining a significant investment in the tech giant, demonstrating confidence in its future growth prospects.

 

BAC – Bank of America Corp.

  • Portfolio Allocation: 14.67%
  • Recent Activity: No change reported.
  • Shares Held: 1,032,852,006.
  • Reported Price: $39.77 per share.
  • Value at Reported Price: $41,076,524,000.

 

Bank of America is a cornerstone of Buffett’s financial sector investments, holding steady as a major position in the portfolio. This reflects continued trust in the bank’s ability to deliver consistent returns.

AXP – American Express

  • Portfolio Allocation: 12.54%
  • Recent Activity: No change reported.
  • Shares Held: 151,610,700.
  • Reported Price: $231.55 per share.
  • Value at Reported Price: $35,105,458,000.

American Express remains a substantial part of the portfolio, highlighting Buffett’s long-term confidence in the financial services company, particularly its strong brand and customer loyalty.

 

KO – Coca-Cola Co.

  • Portfolio Allocation: 9.09%
  • Recent Activity: No change reported.
  • Shares Held: 400,000,000.
  • Reported Price: $63.65 per share.
  • Value at Reported Price: $25,460,001,000.

Coca-Cola’s stable position in the portfolio underscores Buffett’s commitment to this iconic brand, which has been a consistent performer in the consumer staples sector.

 

CVX – Chevron Corp.

  • Portfolio Allocation: 6.63%
  • Recent Activity: Reduced holdings by 3.55%.
  • Shares Held: 118,610,534.
  • Reported Price: $156.42 per share.
  • Value at Reported Price: $18,553,060,000.

The slight reduction in Chevron shares suggests a strategic rebalancing while maintaining significant exposure to the energy sector, reflecting a belief in the long-term value of oil and gas.

OXY – Occidental Petroleum

  • Portfolio Allocation: 5.75%
  • Recent Activity: Added 2.93%.
  • Shares Held: 255,281,524.
  • Reported Price: $63.03 per share.
  • Value at Reported Price: $16,090,394,000.

 

The addition to Occidental Petroleum holdings demonstrates increased confidence in the company’s future, particularly in its ability to capitalize on energy market dynamics.

KHC – Kraft Heinz Co.

  • Portfolio Allocation: 3.75%
  • Recent Activity: No change reported.
  • Shares Held: 325,634,818.
  • Reported Price: $32.22 per share.
  • Value at Reported Price: $10,491,954,000.

Kraft Heinz remains a key holding, indicating Buffett’s continued belief in the company’s ability to deliver value through its well-established brands and cost management.

 

MCO – Moody’s Corp.

  • Portfolio Allocation: 3.71%
  • Recent Activity: No change reported.
  • Shares Held: 24,669,778.
  • Reported Price: $420.93 per share.
  • Value at Reported Price: $10,384,250,000.

Moody’s is a notable part of the portfolio, reflecting confidence in the company’s strong position in credit ratings and analytics, which provides steady income and growth potential.

 

CB – Chubb Limited

  • Portfolio Allocation: 2.46%
  • Recent Activity: Added 4.28%.
  • Shares Held: 27,033,784.
  • Reported Price: $255.08 per share.
  • Value at Reported Price: $6,895,778,000.

The increase in Chubb shares shows Buffett’s growing interest in the insurance sector, betting on the company’s solid financials and risk management capabilities.

 

DVA – DaVita HealthCare Partners

  • Portfolio Allocation: 1.79%
  • Recent Activity: No change reported.
  • Shares Held: 36,095,570.
  • Reported Price: $138.57 per share.
  • Value at Reported Price: $5,001,763,000.

DaVita remains in the portfolio, reflecting confidence in the healthcare sector, particularly in dialysis services, which are crucial for managing chronic kidney disease.

 

Analysis of Top Holdings:

 

1.   Apple Inc.: The largest holding with a significant reduction, possibly for profit-taking, but remains a substantial part of the portfolio due to its strong market position.

2.   Bank of America Corp.: A steady holding in the financial sector, showing continued confidence in its stability and growth.

3.   American Express: A consistent investment, highlighting long-term trust in its financial services.

4.   Coca-Cola Co.: An unchanged position, reflecting confidence in its enduring brand power.

5.   Chevron Corp.: Slight reduction indicating strategic rebalancing while maintaining energy sector exposure.

6.   Occidental Petroleum: Increased position signals growing confidence in the energy market.

7.   Kraft Heinz Co.: Stable holding, suggesting confidence in its ability to manage costs and deliver value.

8.   Moody’s Corp.: Unchanged, showing trust in its steady income from credit ratings.

9.   Chubb Limited: Increased position, reflecting optimism in the insurance industry.

10.                 DaVita HealthCare Partners: Continued holding in the healthcare sector, focusing on essential dialysis services.

 

Overall, Warren Buffett’s Q2 2024 portfolio reflects a mix of strategic reductions and additions, maintaining a balanced approach with significant investments in technology, financial services, consumer staples, and energy sectors. His adjustments demonstrate careful portfolio management aimed at sustaining long-term growth while capitalizing on market opportunities.

 

Who is Warren Buffett ?

1930:

Warren Buffett was born in Omaha, Nebraska.

1942:

Buffett buys his first stock, Cities Service Preferred, at age 11.

1951:

Buffett graduates from Woodrow Wilson High School in Omaha.

1952:

Buffett enrolls at the University of Pennsylvania, where he studies economics and finance.

1954:

Buffett transfers to Columbia University, where he studies under Benjamin Graham, the father of value investing.

1956:

Buffett graduates from Columbia University and takes a job as a securities analyst at Graham-Newman Corp.

1957:

Buffett marries Susan Thompson.

1962:

Buffett leaves Graham-Newman Corp. to start his own investment partnership, Buffett Partnership, Ltd.

1965:

Buffett buys a controlling interest in Berkshire Hathaway, a textile company.

1967:

Buffett begins to transition Berkshire Hathaway from a textile company to an investment company.

1970:

Buffett Partnership, Ltd. is liquidated.

1972:

Buffett becomes the chairman and CEO of Berkshire Hathaway.

1973:

Berkshire Hathaway’s stock price falls by 50% during the stock market crash.

1980:

Berkshire Hathaway’s stock price begins to recover.

1985:

Buffett buys See’s Candies.

1987:

Berkshire Hathaway survives the Black Monday stock market crash relatively unscathed.

1990:

Buffett buys Geico.

1996:

Buffett buys American Express.

1999:

Buffett is named “Investor of the Century” by Time magazine.

2006:

Buffett buys The Buffalo News.

2008:

Buffett survives the financial crisis.

2011:

Buffett donates $31 billion to the Bill & Melinda Gates Foundation.

2012:

Buffett is awarded the Presidential Medal of Freedom.

2019:

Buffett becomes the third-wealthiest person in the world.

2020:

Buffett’s net worth falls by $24 billion during the COVID-19 pandemic.

2021:

Buffett’s net worth recovers and he becomes the fourth-wealthiest person in the world.

2022:

Buffett turns 92 years old.

Interesting Facts:

Buffett bought his first stock when he was just 11 years old.

He is known as the “Oracle of Omaha.”

Buffett is widely considered one of the greatest investors of all time.

He is also a noted philanthropist, having pledged to give away 99% of his wealth to charitable causes.

He is also a fan of playing bridge, and has been known to play the game for hours on end.

Buffett is a longtime friend of Microsoft co-founder Bill Gates, and the two have worked together on several philanthropic initiatives.

Is Apple Inc. (AAPL) a Buffett-Type-Investment?

Economic Moat

 

Apple has one of the most recognized and valuable brands in the world, with a loyal customer base and a reputation for quality and innovation. The integrated ecosystem of Apple’s products and services encourages customer retention and repeat sales. Apple’s gross margin of 45.03% suggests strong pricing power, which is a characteristic Buffett looks for.

 

Financial Health

 

Apple’s net income of $100.91 billion with a profit margin of 26.16% indicates a highly profitable company. The current ratio is slightly above 1, suggesting adequate short-term liquidity. A debt-to-equity ratio of 1.46 indicates higher leverage, which Buffett typically scrutinizes, but given Apple’s cash flow strength, this may not be a significant concern. A substantial free cash flow of $106.87 billion provides Apple with plenty of capital to reinvest in the business, pay dividends, and buy back shares.

 

Management Efficiency

 

An ROE of 156% is exceptionally high, which may be influenced by Apple’s stock repurchases reducing equity. Buffett values high ROE but would also consider the context of how it’s achieved. Apple has a high inventory turnover rate of 31.81, reflecting efficient management and strong demand for its products.

 

Valuation

 

The trailing PE ratio of 28.95 and a forward PE of 27.75 show Apple’s stock is priced at a premium relative to its earnings. While Buffett prefers a lower PE ratio, he may be willing to pay for quality. At 2.22, the PEG ratio suggests the stock may be overvalued based on expected growth rates, although this is within the range Buffett might accept for a high-quality business.

Price to Book PB Ratio is very high at 38.78, which may give value investors pause.

 

Dividends and Share Repurchases

 

A yield of 0.52% is relatively low, but the payout ratio of 14.95% is sustainable. Buffett appreciates a track record of dividend growth, which Apple has. The reduction in shares outstanding (-2.38% YoY) reflects Apple’s aggressive share buyback policy, effectively returning value to shareholders.

 

 

Market Performance

 

The stock price increase of 23.23% over the last year reflects strong market confidence in Apple. A beta of 1.29 suggests that Apple’s stock is somewhat more volatile than the market. Beta measures the price volatility of a stock in comparison to the overall stock market. A value higher than 1 indicates greater volatility, while a value under 1 indicates less volatility.

 

In Conclusion


Apple showcases a robust economic moat, exceptional profitability, strong management efficiency, and a solid track record of returning value to shareholders. Despite its high valuation, which may not traditionally align with Buffett’s preference for undervalued stocks, Apple’s consistent performance, and strong competitive position may justify a premium. Buffett’s investment in Apple in the past indicates that he sees value beyond the traditional metrics. Apple could be viewed as a “Buffett-type” investment, especially for the long-term, considering its enduring brand strength, financial health, and efficient capital deployment.

Berkshire Hathaway, a hedge fund managed by Warren Buffett, disclosed 45 security holdings in their SEC 13F filing for the third quarter of 2023, with a total portfolio value $313,257,311,000

 
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