Berkshire Hathaway (BRK.A -0.59%) (BRK.B -0.20%) owns dozens of stocks in its closely followed $287 billion portfolio, many of which were hand-picked by legendary investor Warren Buffett himself.
To be sure, there's a solid bull case to be made for most of the stocks in Berkshire's portfolio. Buffett and his investment managers tend to focus on companies that are among the leaders in their respective industries, have stable and growing cash flows, and trade for a reasonable valuation.
Image source: The Motley Fool.
However, there are some that look more attractive than others right now. Two in particular that could be worth a closer look are innovative bank Ally Financial (ALLY 0.22%) and asset-light homebuilder NVR (NVR -0.62%).
A unique bank with room to grow
Ally Financial is the most unique bank stock in Berkshire's portfolio, as is an online-based financial institution that specializes in auto lending and high-yield deposit accounts. As of the latest information, Berkshire owns 9.4% of Ally, a stake worth just over $1 billion.
Ally is doing quite well despite the difficult consumer spending environment. It received more auto loan applications in the first quarter of 2025 than ever before, and with an average yield of 9.8% from new auto loans, this can be a highly lucrative business.
The largest auto lender that isn't owned by the manufacturer, Ally (which was spun out of General Motors years ago) is well positioned to benefit from expected interest rate cuts over the next few years. For one thing, lower rates are likely to lower Ally's deposit cost and improve margins. The bank currently has an average yield of 7.1% from its loan portfolio and a deposit cost of about 3.8%, so the latter coming down would almost certainly boost profits. In addition, lower rates would likely result in more demand for auto loans.
Ally has excellent asset quality, and its net charge-off rate has actually declined over the past year, unlike many other banks. Its insurance business is thriving, and although there is significant economic uncertainty right now, Ally is a highly profitable bank that is well positioned to grow and expand its margins over the next few years.
An asset-light homebuilder with lots of pent-up demand
NVR is one of the largest homebuilders in the United States and is best known for its NV Homes and Ryan Homes brand names.
I won't sugar-coat it. The real estate market in the U.S. has been agonizingly slow for a while. A combination of rising home prices and generationally high mortgage rates have kept many would-be homebuyers on the sidelines. In 2025, we're seeing slowing home sale volumes and more usage of incentives by homebuilders. NVR reported that its backlog declined by 9% year over year in the first quarter, and net new orders dropped by 12%.
However, NVR is a highly profitable homebuilder and has some big competitive advantages. The company pioneered the "land-light" homebuilding model, under which it primarily buys purchase options on buildable lots but doesn't actually buy any land until it has a home sold. This, combined with the company's superior financial strength, has resulted in generally better returns on equity than most other homebuilders produce.
Through a combination of profitable homebuilding and smart capital allocation (NVR has reduced its share count by more than 20% over the past five years), the company has a strong history of producing stellar returns. For example, over the past decade, NVR has produced roughly double the total return of the S&P 500 over the same period. With shares nearly 30% below the highs due to the slow and uncertain market environment, NVR could be in a great position to rebound once interest rates finally start to drop and the market thaws.
Solid investments to buy and hold
To be sure, there's a lot that could go wrong with these two companies, at least in the near term. If the U.S. economy gets worse, it would almost certainly cause Ally's net charge-off rate to increase, just to name one example. And there's no way to know when interest rates will start to normalize and bring new life to the real estate market.
However, these are both excellent businesses with competitive advantages and lots of room to grow. Investors who measure their portfolio returns in years, and who add shares to their portfolios at these levels could be very glad they did.
