Warren Buffett's Top 10 Stocks

Berkshire Hathaway (BRK.A -0.59%) (BRK.B -0.74%) owns the common stock of more than 40 different companies, as of the latest available data, but the majority of the stock portfolio's value is concentrated in the company's largest positions. In fact, the four largest holdings are worth more than the rest of the portfolio combined.

With that in mind, here are the 10 largest holdings in Berkshire Hathaway's portfolio by market value, most of which were hand-selected by Warren Buffett himself, and why Berkshire invests in each one.

Data source: Berkshire Hathaway SEC filings, as of 6/30/2017. Stock prices and market values as of 8/15/2017.

1. Kraft Heinz

The largest of Berkshire's stock holdings, Kraft Heinz is one of the many household-name brands that Buffett is invested in. In addition to the flagship Kraft Foods and Heinz condiment brands, Kraft Heinz's portfolio also includes Oscar Mayer, Velveeta, Maxwell House, and Lunchables, just to name a few. It's no secret that Buffett places a lot of value on strong brands, and the Oracle of Omaha also likes the synergies that were created by combining two of the largest food companies in the U.S.

Image source: The Motley Fool.

2. Wells Fargo

Warren Buffett has stuck with Wells Fargo, despite the bank's infamous fake-accounts scandal. Why? As Buffett puts it, Wells Fargo is an "incredible institution." The bank consistently generates better returns on equity and assets than the rest of the "big four" U.S. banks. It's worth noting that Berkshire has sold a small portion of its Wells Fargo stake recently, but that was to stay under a 10% ownership stake for regulatory reasons.

3. Apple

Berkshire first purchased Apple stock in early 2016, which was initiated by one of Buffett's trusted stock pickers, not Buffett himself. However, the position has grown significantly since then, which is most likely Buffett's choice. Buffett has said that Apple produces an "enormously useful product" and that he loves the company's incredibly loyal customer base.

4. Coca-Cola

Coca-Cola is one of Buffett's longtime favorite stocks, as it's been a part of the portfolio for more than 25 years. Not only does the company produce some of Buffett's favorite beverages, but Coca-Cola has increased its dividend for 55 consecutive years, and has one of the most valuable brand names in the world. In addition, Coca-Cola has one of the most impressive distribution networks of any company, and also has a diverse portfolio of products with 21 products that each generated at least $1 billion in sales last year.

5. American Express

Despite the company losing its valuable Costco partnership and Buffett saying that its business model is "under attack," American Express remains one of Berkshire's largest stock holdings. Buffett loves Amex's extremely valuable brand (see a pattern emerging here?), as well as its shareholder-friendly management team.

6. International Business Machines

International Business Machines, better known simply as IBM, has become less of a "Buffett stock" lately. During the first and second quarters of 2017, Berkshire unloaded about 30% of its IBM stake. Buffett says that IBM has run into some tough competition and that he has revalued the company lower than before. However, Buffett has indicated that he intends to keep the remaining shares, so it seems that he still likes IBM as a long-term investment, just not quite as much as he used to.

7. Phillips 66

Berkshire owns more than 15% of oil giant Phillips 66, and Buffett likes the company's excellent cash flow and diverse revenue stream that allows it to make money no matter what oil prices are doing. In addition, Phillips 66 has done an excellent job of returning capital to shareholders, with massive buybacks and a rapidly growing dividend.

8. U.S. Bancorp

Buffett's third-largest bank stock holding, U.S. Bancorp isn't cheap, but it is one of the most profitable and efficient brick-and-mortar banking operations in the entire industry. Like all of Buffett's bank stocks, U.S. Bancorp could be a big beneficiary of rising interest rates and looser regulations, perhaps a big reason why Buffett's largest recent stock buys have been in the financial sector.

9. Charter Communications

Berkshire first bought shares of Charter Communications in 2014 and added to its stake in 2015. And thanks to the stock more than doubling in price since that time, it is now one of Berkshire's most valuable stock positions. Charter has since finalized its acquisitions of Time Warner Cable and Bright House Networks, which created significant cost synergies, and is now the second-largest U.S. cable operator.

10. Moody's

Moody's is one of Buffett's biggest stock wins, worth about 10 times what Berkshire paid for its stake, and has been one of the portfolio's best-performing investments of 2017, up 40% year to date. Moody's primary business is to rate the creditworthiness of companies and governments, and Buffett loves the company's competitive position in a high-barrier market that is essentially a duopoly -- dominated by Moody's and Standard and Poor's.

One big name that's not on the list -- yet

No discussion of Berkshire's largest stock holdings would be complete without mentioning Bank of America (BAC 0.45%). Thanks to a savvy financial crisis-era deal, Berkshire received warrants to buy 700 million shares of the bank for less than one-third of the bank's current share price. In the wake of Bank of America's plan to increase its dividend, announced in late June, Buffett said that Berkshire would exercise its warrants.

However, since the transaction hasn't been completed as of the quarter ending June 30, 2017, which the latest SEC filing reflects, the bank hasn't yet officially been reported as a part of Berkshire's portfolio. With that in mind, assuming the warrants have been exercised, Bank of America would be Berkshire's fifth-largest investment based on the current share price.