When Warren Buffett buys a stock, other investors take notice. And the CEO of Berkshire Hathaway (BRK.A -0.34%) (BRK.B -0.01%) has been buying in recent months.
Berkshire submitted a required quarterly report to the U.S. Securities and Exchange Commission (SEC) last week. This SEC filing revealed that Buffett and his team bought seven stocks in the fourth quarter of 2021. Here are the stocks the legendary investor scooped up -- and whether or not they're good picks now for investors who aren't multibillionaires.
Image source: The Motley Fool.
Adding more
Several of Buffett's recent purchases added to positions in stocks that Berkshire already owns. Berkshire bought more shares of Liberty Sirius XM Group Series A (LSXMA 2.30%) in the fourth quarter, a tracking stock for Liberty One SiriusXM Group's position in Sirius XM Holdings (SIRI 0.96%).
The Oracle of Omaha must have also liked what he foresaw for the energy industry. Buffett increased Berkshire's stake in oil and gas giant Chevron (CVX 0.57%) by one-third during Q4. This move marked something of a reversal after Berkshire trimmed its position in Chevron earlier last year.
Buffett also appears to be bullish about the home specialty retail market. Berkshire added a little to its positions in Floor & Decor Holdings (FND 1.34%) and RH (RH 1.37%) in Q4. Floor & Decor operates stores that carry flooring and related products. RH, formerly known as Restoration Hardware, is a leader in luxury home furnishings.
New positions
Probably the most highly visible move by Berkshire recently is its initiation of a new position in Activision Blizzard (ATVI). This purchase was made before Microsoft's announcement of plans to acquire Activision for $68.7 billion.
Berkshire released a letter to the media written by Buffett that emphasized the company had no knowledge of Microsoft's intent when it bought shares of Activision. The decision to buy the stock was made by one of Buffett's investment managers rather than the legendary investor himself.
Buffett's enthrallment with Liberty One SiriusXM Group's subsidiaries was underscored by a new position in Liberty Media Formula One Series C (FWONK). Also known as Formula One Group, this business owns the exclusive rights to the Fédération Internationale de l'Automobile Formula One World Championship racecar competition and owns the Atlanta Braves.
While Buffett is a longtime fan of bank stocks, he didn't increase his positions in any traditional banks in the fourth quarter. However, Berkshire bought a stake in Nu Holdings (NU 2.92%), a Brazilian company that operates a digital banking platform.
Follow the leader?
Just because Buffett is one of the most successful investors of all time doesn't mean that other investors should automatically follow in his footsteps. The priorities of Berkshire Hathaway could be quite different from ordinary investors.
Berkshire's purchase of additional shares in Liberty Sirius XM Group Series A is somewhat puzzling. Why? Berkshire completely exited its position in Sirius XM. While the satellite radio company's business is improving, none of the related stocks appear to be top picks for investors right now. With the delay of the Major League Baseball season, Liberty Media Formula One Series C looks like an iffy stock to buy now as well.
Activision Blizzard doesn't have much room to run. Its current market cap is only slightly below the price that Microsoft plans to pay to acquire the gaming company.
On the other hand, income-seeking investors could like Chevron's juicy dividend yield of nearly 4.3%. The dynamics of the global energy market should also provide a tailwind for Chevron in 2022.
RH might be the closest thing to a bargain among Buffett's latest buys. The stock trades at 16.3 times expected earnings, well below the forward earnings multiple of the S&P 500. Floor & Decor isn't as much of a value play. However, it stands to benefit from the home improvement boom.
Nu Holdings only went public in December 2021. This fintech stock is arguably the riskiest among Berkshire's latest purchases. But it also offers perhaps the most impressive growth potential of the group. Aggressive investors willing to take on considerable risk might want to consider taking a nibble. When Buffett buys an IPO stock, you'll especially want to take notice.
