People widely consider Warren Buffett the greatest investor of all time. Such fame means that people eagerly await Berkshire Hathaway's quarterly 13F filing showing what Buffett's holding company has bought and sold over the past three months.
Berkshire's latest 13F disclosure is in, and Buffett was again active. Investors must make their own decisions -- but if you're looking for investment ideas, why not look at one of Wall Street's best?
Here are three of Buffett's latest buys and why they are worth considering for your portfolio.
1. Apple
Apple (AAPL 0.52%) is the world's largest consumer electronics company, with more than 1 billion people using Apple devices (iPhones lead the way). Buffett added to Berkshire's existing position in the first quarter. What is most surprising about this purchase is that Apple is already the largest holding in Berkshire's stock portfolio at 47%.
Warren Buffett recently called Apple "the best business Berkshire owns," so buying more would indicate Buffett wants more of a good thing. The stock isn't cheap at a forward price-to-earnings ratio (P/E) of 29, well above its decade average of 19. However, Buffett is notorious for thinking long-term, and Apple has plenty of growth levers to pull despite its size.
The company is pushing into India, where it recently opened its first stores. India is the world's most populated country, and is thriving economically. Experts believe the country's middle class could swell over the coming years, far exceeding the United States' total population. Even if there's competition, Apple's worldwide brand recognition could fuel years of incremental growth in India as an emerging market.
2. Diageo
Worldwide spirits conglomerate Diageo (DEO -1.48%) is a new purchase for Buffett in Q1. Berkshire opened a small position (by his standards) of $40 million, a rounding error for the overall portfolio. Still, the purchase could signal a desire to get additional consumer products into the portfolio as the economy faces a potential recession. At Berkshire's annual meeting, Buffett declared that many of Berkshire's operating units would see their earnings dip, implying that the U.S. economy was exiting a period of economic growth.
Diageo owns many of the world's renowned liquor and spirit brands, including Captain Morgan, Johnnie Walker, Tanqueray, Guinness, and more. The stock trades at a P/E of 21, below its long-term average of 24. You won't mistake Diageo for a growth stock; analysts believe earnings per share (EPS) will grow by 8% annually over the next several years.
But Diageo is a resilient business that sells products consumers might lean on during tough times. Time will tell whether Berkshire makes Diageo a larger piece of its portfolio, but investors looking for a blue-chip consumer products stock can hone in on Diageo.
3. Bank of America
It's been a tumultuous year for the banking sector. A combination of unrealized losses on long-duration bonds due to rising rates and fear over the stability of banks has caused multiple high-profile bank failures. Bank of America (BAC -1.07%), one of the largest financial institutions in the United States, is down more than 20% over the past year.
Meanwhile, the operating environment has gotten more friendly to Bank of America. Higher interest rates help banks earn higher returns on the capital they lend and invest. At the same time, Bank of America's large size may be a competitive advantage if depositors flee smaller regional banks for safety in these perceived too-big-to-fail lenders.
Bank of America has been a longtime holding of Berkshire, and the company added to its position in the first quarter. Today the stock is Berkshire's second-largest holding at 8.5%. Buffett's purchase would seemingly indicate a vote of confidence in the bank, and the stock is trading below its long-term average price-to-book value (P/B), its lowest since the pandemic market crash in 2020.
