It's been a spectacular run for Warren Buffett's company, Berkshire Hathaway. The stock has zoomed 18% higher this year (as of April 1) compared to the broader benchmark S&P 500, which is down about 4%. Investors have piled into Berkshire as a flight to safety due to its many diverse businesses, huge cash stockpile, and experienced management team, which knows how to navigate choppy markets. Berkshire's decision to stay cautious last year has paid dividends this year and reinforces the company's long-term investing view of buying stocks that are built for an entire economic cycle. Here are three Warren Buffett stocks to buy hand over fist in April.
1. BYD Company
Berkshire first purchased the Chinese electric carmaker BYD Company (BYDD.F 1.53%) in 2008 and has done extraordinarily well on the investment. The company has managed to build electric vehicles that are not only cheaper than Tesla but also superior in many ways. For instance, BYD recently launched its Qin L model to rival Tesla's Model 3, except the price of the vehicle starts at $16,517, nearly half the price of the Model 3. Furthermore, BYD's new Super E-Platform charger can power close to 250 miles of driving range into BYD vehicles in just five minutes, once again outperforming the likes of Tesla.
The strong product offerings have begun to show up in the numbers. In 2024, BYD sold nearly the same amount of EVs as Tesla did and generated revenue of more than $107 billion, up 34% year over year and topping Tesla. BYD also controls a leading 32% of the Chinese EV market.
OTC: BYDD.F
Key Data Points
While not planning to come to the U.S. anytime soon, management thinks it can continue to expand the company outside of China, particularly in the U.K. Management is projecting to sell more than 800,000 vehicles outside of China this year, more than double last year. Its stock is trading at about 25.5 times forward earnings, so the valuation is not necessarily cheap but a lot cheaper than Tesla (at about 138) and compared to other growth stocks in the U.S., especially when you consider the company's excellent results as of late.
2. Coca-Cola
There isn't a more classic Warren Buffett stock than Coca-Cola (KO +0.00%), which Berkshire first began buying in 1988. Today, Coca-Cola is still a top-five position in Berkshire's equity portfolio, comprising nearly 10% of total holdings. Coca-Cola has everything Buffett loves in a stock: A special brand, a strong moat, a history of stability, and the ability to return capital to shareholders.
Let's start with the brand. Very few companies boast a more iconic brand than Coca-Cola. The company's beverages have figured in pop culture for decades. These kinds of brands effectively turn into moats because consumers are likely to keep drinking Coke in a recession, and the company can pass along some of the higher costs from inflation to its customers.
NYSE: KO
Key Data Points
Coca-Cola has demonstrated its stability this year, with the stock up about 14%. First-quarter revenue came in better than expected, particularly in the company's sparkling beverage division. Furthermore, investors think the company should be able to weather the impact of tariffs, particularly related to aluminum tariffs because management said the company has the flexibility to focus on plastic packaging if needed.
Coca-Cola also has a rock-solid dividend of 2.8%. The company has raised its dividend for 63 straight years and has returned more than $93 billion to shareholders through dividends since 2010.
3. Jefferies Financial
One of the smaller positions in Berkshire's portfolio, the investment bank Jefferies Financial (JEF +2.95%) has been hit hard this year, with the shares down about 30%. Earnings can be volatile at investment banks because deal and initial public offering (IPO) activity is often volatile and can come and go, as we've seen during the past five years. After the pandemic subsided, deal activity and IPOs surged, but the high interest rate environment quickly put an end to that, and activity has been sluggish the past few years.
I think part of the issue for Jefferies is that investors were expecting to see renewed deals and IPO activity after Donald Trump's presidential election victory. However, concerns about tariffs and a potential recession or even stagflation has now made companies rethink or delay their investment plans until there is more clarity. The artificial intelligence data center company Coreweave, one of the more hyped IPOs of the year, had to price its stock lower than its expected range and had a very mediocre first day of trading, with shares finishing little changed on the day.
The uncertainty showed in Jefferies' first-quarter earnings, which missed analysts' estimates. Jefferies President Brian Friedman said in an interview that the momentum heading into the year "has been slowed by the uncertainty that has arisen as a result of the policy statements and actions of the government and geopolitical events." Still, in an earnings statement, management said the company's "high quality backlog continues to build." Trading revenue could also benefit from all of the recent volatility, and lower interest rates later this year could also increase dealmaking and IPOs.
