Fans and followers of Warren Buffett's Berkshire Hathaway (BRK.A -0.28%) (BRK.B -0.24%) likely know he and his team reduced their stakes in some surprising names last quarter. The most noteworthy reductions include Verizon, Royalty Pharma, General Motors (GM -0.31%), and STORE Capital, though there were other positions also scaled back in size.Buffett and his lieutenants also picked up some stocks in the second quarter, adding to Berkshire's existing stakes in Apple (AAPL 0.62%), Chevron, and Occidental Petroleum. You'd be wise to at least consider why he bought and sold these stocks, and perhaps consider doing the same yourself.
On the other hand, you need not blindly follow every move the Oracle of Omaha makes. He may have a different end goal than you, after all, and he almost certainly has a different risk tolerance. It's also worth noting that of the stocks Berkshire Hathaway sold last quarter, it still has sizable stakes in many of them.
Here's a rundown of three stocks Buffett's Berkshire still owns that could be no-brainer picks for almost anyone else's portfolio as well.
General Motors
Wait...didn't I just say Berkshire reduced General Motors shares during the second quarter? I did. Buffett and his management team only sold 9.1 million shares of GM, though. It's still holding nearly 53 million shares of the iconic carmaker.
It's also worth noting that Berkshire made the decision to trim this position before the auto giant made a game-changing announcement last week. After more than a two-year hiatus, GM is reinstating its dividend, planning on paying $0.09 per share per quarter, with the first renewed payment coming due next month. The board of directors also approved the resumption of stock buybacks, earmarking up to $5 billion for the updated program.
That decision ultimately reflects confidence in the future of electric vehicles, and how General Motors is positioning itself for that future. Based on historical trends and other factors, EVAdoption estimates annual sales of EVs in the United States alone will swell from just a little under 1 million units this year to more than 4.7 million units in 2030, making GM's $35 billion investment in an EV-centric future well worth the expense.
American Express
Berkshire neither bought nor sold American Express (AXP 1.21%) stock last quarter. Rather, it simply stood pat with the 151 million shares it's been sitting on for a long, long time.
In passing, it's not easy to see what makes American Express very different -- or any better -- than rival card companies like MasterCard or Visa, both of which Berkshire also holds. American Express (still) largely holds itself out as a charge card company rather than a credit card outfit, though from a customer's perspective, there's no significant difference.
If you dig deeper into each companies' offerings, though, it becomes clearer that American Express offers a much more robust ecosystem of cardholder benefits. In addition to personal checking, savings accounts, and lending, cardholders receive generous credit toward future travel expenses, cash back on spending at grocery stores, ride-hailing service vouchers, and cash back on streaming subscriptions, just to name a few perks.
This solid set of benefits doesn't necessarily make the company's business a bulletproof one. It makes the business a rather rock-solid one, though, able to stand up firmly against even the toughest of economic environments. Despite what seemed like a wobbly second quarter, American Express reported a 31% year-over-year revenue increase for the three-month stretch ending in June, pushing earnings well above expectations and prompting the company to raise its profit guidance for the remainder of the year. The numbers and improved profit outlook underscore CEO Steve Squeri's comment made during last month's earnings call: "We continue to see no significant signs of stress in our consumer base."
Apple
Finally, add Apple to your list of stocks Buffett and his team like so much that you ought to consider it for yourself.
It's not a name that needs any real introduction. Apple is the company behind the stunningly popular iPhone, which leads a worldwide base of more than 1.8 billion actively used Apple-made devices. That reach is still growing, largely thanks to the intense customer loyalty the company is able to foster. Consumer Intelligence Research Partners reports that 90% of U.S. iPhone users stick with the iPhone after buying their first one. Presumably, Apple's achieving similar repeat purchases overseas.
In the meantime, the company is still positioning itself for a future beyond hardware. Roughly one-fifth of its revenue now comes from digital services, and while that still pales in comparison to the iPhone's contribution of more than half the company's top line, Apple's digital services revenue boasts considerably greater profit margin than physical products do. Of course, consumers' loyalty to the company's hardware sets more and more device owners up as future digital customers.
It's admittedly not Buffett's usual proverbial cup of tea. He generally eschews trendy tech stocks, uncertain of their staying power. But, Apple has proven itself over the years, and Berkshire's stake grew by 3.9 million shares last quarter to 894.8 million. The fact that this position is still four times bigger than Berkshire Hathaway's next-biggest stock holding, however, speaks volumes about how highly the Berkshire team thinks of Apple. Take the hint.
