Last week marked one of the most important days of the first quarter for the investing community. Feb. 14 was the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission (SEC).
Put simply, a 13F provides professional and everyday investors alike with an under-the-hood look at what Wall Street's smartest and most successful money managers bought and sold in the latest quarter (in this instance, the quarter ended Dec. 31, 2023). Despite their drawbacks, 13Fs can clue investors in to the stocks, industries, and trends that Wall Street's top money managers are focused on.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Though many 13Fs are filed with the SEC in a matter of days, no 13F tends to be more anticipated than that of Warren Buffett with Berkshire Hathaway (BRK.A 0.68%)(BRK.B 0.53%). That's because the "Oracle of Omaha" has delivered north of a 4,800,000% aggregate return in his company's Class A shares (BRK.A) since he took over as CEO in the mid-1960s. Clearly, he's doing something right, and people are eager to follow in his footsteps by mirroring his investments.
Based on Berkshire's latest 13F, Warren Buffett and his team entered 2024 overseeing 45 stocks in their roughly $371 billion portfolio. Mind you, I'm excluding the two index funds owned by Berkshire Hathaway -- the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust -- because index funds represent baskets of securities and aren't themselves stocks.
Here's a detailed breakdown of Buffett's investment portfolio for Berkshire Hathaway entering 2024.
Warren Buffett's core investments
If there's a defining characteristic of Berkshire Hathaway's investment portfolio, it's that it's heavily concentrated in a few top investment ideas. Both Buffett and the late, great Charlie Munger long believed that diversification is only necessary if you don't know what you're doing. A nearly 20% annualized return for Berkshire's stock over close to six decades suggests the Oracle of Omaha knows a thing or two about investing.
The following eight core investments comprised more than 84% of Berkshire's $370.6 billion of invested assets, as of the closing bell on Feb. 16, 2024:
- Apple (AAPL +1.00%): $167,564,822,400 in market value
- Bank of America: $35,209,924,885
- American Express (AXP 0.55%): $32,226,370,392
- Coca-Cola (KO 0.34%): $23,756,000,000
- Chevron (CVX 0.40%): $18,989,654,896
- Occidental Petroleum (OXY +1.21%): $15,010,057,107
- Kraft Heinz: $11,335,348,015
- Moody's: $9,146,566,891
If there's one common theme among Warren Buffett's core investments, it's strong brand recognition. Tech stock Apple, which accounts for more than 45% of Berkshire's invested assets, is consistently the most valuable brand in surveys and is the leader in U.S. smartphone market share. Meanwhile, Kantar's annual "Brand Footprint" report notes that Coca-Cola has been the most chosen brand by consumers every year for a decade (as of 2022). Familiar brands with sustained competitive advantages tend to produce predictable operating results -- and that's something Buffett absolutely loves.
NASDAQ: AAPL
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Many of these core investments are also longtime holdings. Coca-Cola, American Express, and Moody's have been continuous holdings in Berkshire's portfolio since 1988, 1991, and 2000, respectively. Buffett and his investing aides understand that the U.S. and global economy tend to grow over long periods, and have positioned their company's portfolio to take advantage of this expansion. Companies like American Express should enjoy higher fee collection and interest income from lending, as well as higher fee revenue from merchants, as transactional volume increases over time.
Interestingly, Buffett's core investment thesis also involves energy stocks. Energy has never been a huge focus for the Oracle of Omaha or his team, but Chevron and Occidental Petroleum currently combine for about $34 billion of invested assets. This is a crystal-clear indication that Berkshire's brightest minds expect the spot price for crude oil to remain elevated.
Although Chevron is a highly diversified integrated energy company, and therefore isn't as sensitive to spot-price movements in crude oil, Occidental's revenue stream is highly skewed toward drilling. A higher spot price for crude would definitely help the latter far more.
The other billion-dollar bets at Berkshire Hathaway
Although the aforementioned eight core investments make up more than 84% of Berkshire Hathaway's close to $371 billion investment portfolio, there are still 20 additional holdings that tally at least $1 billion in market value (as of Feb. 16):
- Mitsubishi: $7,271,277,217
- Itochu: $5,222,432,191
- Mitsui: $5,215,608,560
- DaVita: $4,411,600,565
- Citigroup (C +0.57%): $3,030,177,115
- VeriSign: $2,489,304,669
- Kroger: $2,382,000,000
- Sumitomo: $2,372,187,302
- Visa (V 0.92%): $2,311,340,458
- Marubeni: $2,266,233,990
- BYD: $2,134,256,139
- Mastercard (MA 0.89%): $1,866,269,528
- Capital One Financial: $1,711,399,447
- Amazon: $1,695,000,000
- Liberty Sirius XM Series C: $1,455,469,155
- Snowflake: $1,410,735,347
- Aon: $1,276,084,000
- Charter Communications: $1,121,879,713
- Nu Holdings: $1,109,750,602
- Ally Financial: $1,043,420,000
The big theme of this mid-tier group of holdings which could, in theory, grow into core holdings for Buffett and his team, is valuation. The Oracle of Omaha is a stickler for a good deal, and this group of companies (mostly) demonstrates that.
NYSE: V
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For instance, the five Japanese trading houses Buffett and his team have been piling into (Mitsubishi, Itochu, Mitsui, Sumitomo, and Marubeni) trade at single-digit price-to-earnings multiples. If a broad-reaching business sustains its competitive advantages, trades at a single-digit earnings multiple, and offers a market-topping dividend yield, there's a good chance it's going to intrigue Warren Buffett.
You'll also note that Berkshire's top investment minds gravitate to financial stocks. Sizable bets have been placed on industry leaders like Visa, Mastercard, and Citigroup. The reason financial stocks are well-liked by Buffett is because they're cyclical. In other words, they ebb and flow with the health of the U.S. economy.
As an example, Visa and Mastercard are the respective No. 1 and No. 2 in credit card network purchase volume in the United States. Meanwhile, Citigroup is one of the largest banks by total assets. If the U.S. economy continues to expand over time, fee collection from merchants should climb for Visa and Mastercard, while interest income can power Citigroup higher.
Image source: Getty Images.
The Oracle of Omaha's smaller holdings
Last but not least, there are 17 holdings in Warren Buffett's approximately $371 billion portfolio that range in market value from a low of $8.6 million to as much as $840.9 million:
- T-Mobile: $840,869,220
- Paramount Global (PARA +0.00%): $823,192,383
- Liberty Sirius XM Series A: $717,186,367
- HP (HPQ 1.46%): $653,130,595
- Liberty Formula One Series C: $534,239,160
- Floor & Décor Holdings: $530,293,200
- Louisiana-Pacific: $482,858,063
- Liberty Live Series C: $418,362,732
- Sirius XM Holdings (SIRI +0.00%): $191,959,387
- Liberty Live Series A: $181,414,375
- NVR: $181,414,375
- Lennar Class B: $82,124,903
- Diageo: $33,456,475
- Jefferies Financial Group: $17,827,905
- Liberty Latin America Series A: $17,494,767
- Atlanta Braves Holdings Series C: $8,979,347
- Liberty Latin America Series C: $8,628,614
This bottom rung of the ladder in Berkshire's portfolio is typically reserved for smaller investments made by Buffett's top "lieutenants," Todd Combs and Ted Weschler, as well as companies that may be falling out of favor.
NASDAQ: PARA
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For example, Buffett and his team sold a substantial percentage of their respective stakes in HP and Paramount Global during the fourth quarter. The recovery in personal-computing sales is taking longer than anticipated for HP. Meanwhile, Paramount Global is mired under a mountain of debt and contending with weaker ad sales and increased streaming competition.
When Berkshire's top investors decide that it's time for a holding to get the heave-ho, they aren't shy about it. Don't be surprised if HP and/or Paramount Global aren't holdings for much longer.
However, these smaller holdings in Berkshire's investment portfolio can still be gems. Satellite-radio operator Sirius XM Holdings is a perfect example. It's a legal monopoly that enjoys exceptionally strong pricing power with its subscribers. Since it generates more than three-quarters of its revenue from subscriptions, it's better positioned to navigate normal downturns in the U.S. economy than traditional radio operators that are heavily reliant on advertising for the bulk of their revenue.
