In this article, we discuss the 10 long-term stocks in Berkshire Hathaway’s portfolio.
Billionaire, philanthropist and one of the most successful hedge fund managers in the world, Warren Buffett, founder and CEO of the Nebraska-based investment firm Berkshire Hathaway, is one of the few names in the world of investment management that requires little to no introduction. Presently worth over $103 billion, he is the sixth wealthiest individual on the planet, according to Forbes. Referred to as the ‘Sage of Omaha’, Buffett remains one of the most admired investors and hedge fund managers in corporate America.
A significant portion of his hedge fund’s success can be attributed to him following the Benjamin Graham school of value investing, which searches for stocks whose prices are unjustifiably low based on their intrinsic value. Berkshire Hathaway, as an investment management firm, managers over $293 billion under the legendary investor. According to the Q2 13F filings, Berkshire Hathaway’s portfolio is diversified across 9 primary sectors, with the Consumer Discretionary sector dominating, making up 42.5% of the fund’s total portfolio value. A significant majority of the companies in the fund’s portfolio are considered large-cap stocks, with stocks scaling up to more than $10 billion in market cap making up 69% of the fund’s total holdings value.
Some of the top stocks in the portfolio of Berkshire Hathaway at the end of the second quarter of 2021 include Apple Inc. (NASDAQ:AAPL), Bank of America Corporation (NYSE:BAC), The Coca-Cola Company (NYSE:KO) and Visa, Inc. (NYSE:V), among others.
Our Methodology
With this background in mind, let us now look towards the 10 long-term stock picks in Berkshire Hathaway’s portfolio. We made use of Berkshire Hathaway’s 13F portfolio for the second quarter for this analysis.
Why should we pay attention to Warren Buffett’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Berkshire Hathaway Stock Portfolio: 10 Long-Term Stock Picks
10. The Bank of New York Mellon Corporation (NYSE:BK)
Berkshire Hathaway’s Stake Value: $3.7 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 1.26%
Number of Hedge Fund Holders: 52
The Bank of New York Mellon Corporation (NYSE: BK), as a bank holding company, offers financial products and services to consumers in the United States and internationally, through its Investment and Wealth Management, Asset Management, and other segments. The company ranks tenth on our list of the 10 long-term stock picks of Berkshire Hathaway.
As of Q2 2021, Berkshire Hathaway owns over 72.3 million shares in The Bank of New York Mellon Corporation, valued at $3.7 billion. The company represents 1.26% of the hedge fund’s 13F portfolio. As of Q2 2021, 52 hedge funds tracked by Insider Monkey have positions in The Bank of New York Mellon Corporation, up from 49 in the previous quarter. The total value of these stakes is over $4.9 billion.
On September 15, Citi analyst Keith Horowitz raised his price target on The Bank of New York Mellon Corporation to $60 from $56, and kept a Buy rating on the shares of the firm.
Just like Apple Inc., Bank of America Corporation, The Coca-Cola Company and Visa, Inc., The Bank of New York Mellon Corporation is a notable stock in Berkshire Hathaway’s portfolio.
9. Charter Communications, Inc. (NASDAQ:CHTR)
Berkshire Hathaway’s Stake Value: $3.8 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 1.28%
Number of Hedge Fund Holders: 75
Charter Communications, Inc. (NASDAQ:CHTR) is ranked ninth on our list of 10 long-term stock picks of Berkshire Hathaway. The Connecticut-based telecommunications and mass media company provides broadband communications and entertainment services.
At the end of the second quarter of 2021, 75 hedge funds in the database of Insider Monkey held stakes worth $19 billion in Charter Communications, Inc., up from 74 the preceding quarter worth $16 billion.
On October 1, TD Securities analyst Vince Valentini upgraded Charter Communications, Inc. to Buy from Hold with an unchanged price target of $870.
8. DaVita Inc. (NYSE:DVA)
Berkshire Hathaway’s Stake Value: $4.3 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 1.48%
Number of Hedge Fund Holders: 39
DaVita Inc. (NYSE:DVA) is a Healthcare company that provides kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease (ESRD). The company ranks eighth on our list of the 10 long-term stock picks of Berkshire Hathaway.
By the end of the second quarter of 2021, Berkshire Hathaway holds over 36 million shares in DaVita Inc., worth $4.34 billion, and accounting for 1.48% of the hedge fund’s total portfolio value.
On September 9, Cowen analyst Gary Taylor initiated coverage of DaVita Inc. with a Market Perform rating, alongside a $145 price target.
Just like Apple Inc., Bank of America Corporation, The Coca-Cola Company and Visa, Inc., DaVita Inc. is one of the top stocks in Berkshire Hathaway’s portfolio.
7. Verizon Communications Inc. (NYSE:VZ)
Berkshire Hathaway’s Stake Value: $8.89 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 3.03%
Number of Hedge Fund Holders: 63
Based on the Q2 13F filings, Berkshire Hathaway held over 158.8 million shares of Verizon Communications Inc. (NYSE:VZ), amounting to more than $8.89 billion in worth and representing 3.03% of the fund’s investment portfolio.
On September 20, Loop Capital analyst Stephan Bisson initiated coverage of Verizon Communications Inc. with a Hold rating and $57 price on its shares.
6. Moody’s Corporation (NYSE:MCO)
Berkshire Hathaway’s Stake Value: $8.93
Percentage of Berkshire Hathaway’s 13F Portfolio: 3.05%
Number of Hedge Fund Holders: 44
Moody’s Corporation is a New York-based credit rating and risk management company that assigns evaluates bonds and stocks based on investment risk. Ranked sixth on our list of the 10 long-term stock picks of Berkshire Hathaway, Moody’s Corporation has a market capitalization of $69.11 billion.
As of Q2 2021, Warren Buffett’s Berkshire Hathaway holds 24.6 million shares in Moody’s Corporation, worth $8.93 million, and accounting for 3.05% of the fund’s 13F portfolio.
On September 7, Oppenheimer analyst Owen Lau raised the price target on Moody’s Corporation to $418 from $406, and kept an Outperform rating on the shares of the company.
By the end of the second quarter of 2021, 44 hedge funds out of the 873 tracked by Insider Monkey held stakes in Moody’s Corporation worth roughly $16 billion. This is compared to 55 hedge funds in the previous quarter with a total stake value of approximately $13.7 billion.
In the Q2 2021 investor letter of Qualivian Investment Partners, the fund mentioned Moody’s Corporation. Here is what the fund said:
“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”
5. The Kraft Heinz Company (NASDAQ:KHC)
Berkshire Hathaway’s Stake Value: $13.2 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 4.53%
Number of Hedge Fund Holders: 33
Commonly known as Kraft Heinz, The Kraft Heinz Company (NASDAQ:KHC), is one of the world’s leading food and beverage companies. Based in Illinois, the company ranks fifth on our list of the 10 long-term stock picks of Berkshire Hathaway.
For the second quarter of 2021, Warren Buffett’s Berkshire Hathaway holds over 325.6 million shares of The Kraft Heinz Company, worth more than $13.2 billion. These shares account for 4.53% of the fund’s portfolio value. Of the 873 elite funds tracked by Insider Monkey, 33 were long in The Kraft Heinz Company at the end of June.
On August 4, the company issued its quarterly earnings report for the second quarter of 2021, with earnings per share at $0.78, crossing market estimates by $0.06. Additionally, the revenue for the quarter came in at $6.62 billion, surpassing the predicted revenue by $65.74 million.
On September 21, Morgan Stanley analyst Pamela Kaufman began coverage of The Kraft Heinz Company with an Equal Weight rating alongside a price target of $37 on the company’s shares.
4. The Coca-Cola Company (NYSE:KO)
Berkshire Hathaway’s Stake Value: $21.6 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 7.38%
Number of Hedge Fund Holders: 62
In the second quarter of 2021, The Coca-Cola Company reported an EPS of $0.68, beating estimates by $0.12. The company’s revenue for the quarter came in at $10.13 billion, an increase of 42% on a year-over-year basis, and beat revenue estimates by $823.1 million. The stock has gained 11.22% in the past twelve months.
On July 22, Truist analyst Bill Chappell maintained a Buy rating on The Coca-Cola Company and increased his price target for the stock to $65 from $60.
According to the latest 13F filings, Berkshire Hathaway owns 400 million shares of The Coca-Cola Company, worth more than $21.6 billion, and representing 7.38% of the fund’s total investment portfolio. By the end of the second quarter of 2021, 62 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Coca-Cola Company worth roughly $24.96 billion. This is compared to 61 hedge funds in the previous quarter with a total stake value of approximately $24.90 billion.
3. American Express Company (NYSE:AXP)
Berkshire Hathaway’s Stake Value: $25 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 8.54%
Number of Hedge Fund Holders: 52
Based in New York, the multinational financial services firm American Express Company (NYSE:AXP) comes in at third on our list of the 10 long-term stock picks of Berkshire Hathaway. The company offers credit lending and network processing services.
For the second quarter of 2021, Warren Buffett’s hedge fund held over 151.6 million shares of American Express Company, amounting to more than $25 billion in worth.
On September 16, investment advisory Bank of America upgraded American Express Company stock to Neutral from Underperform with a price target of $169.
2. Bank of America Corporation (NYSE:BAC)
Berkshire Hathaway’s Stake Value: $41.6 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 14.21%
Number of Hedge Fund Holders: 87
Bank of America Corporation is a multinational bank and financial services holding company based in North Carolina. Ranked second on our list of the 10 long-term stock picks of Berkshire Hathaway, Bank of America Corporation has a market capitalization of $371.14 billion.
On October 11, Jefferies analyst Ken Usdin raised his price target on Bank of America Corporation to $48 from $41, and kept a Hold rating on the shares.
In the second quarter of 2021, Bank of America Corporation reported an EPS of $1.03, beating estimates by $0.27. The company’s revenue in the second quarter came in at $21.5 billion.
As of Q2 2021, Berkshire Hathaway owns approximately 1 billion shares of Bank of America Corporation, valued at over $41.6 billion. The company represents 14.21% of the fund’s investment portfolio. At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $46 billion in Bank of America Corporation, down from 97 in the previous quarter worth $45 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation was one of them. Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
1. Apple Inc. (NASDAQ:AAPL)
Berkshire Hathaway’s Stake Value: $121.5 billion
Percentage of Berkshire Hathaway’s 13F Portfolio: 41.46%
Number of Hedge Fund Holders: 138
Berkshire Hathaway holds over 887 million shares of Apple Inc., amounting to $121.5 billion in worth. The company represents 41.46% of the fund’s total portfolio value. By the end of the second quarter of 2021, 138 hedge funds out of the 873 tracked by Insider Monkey held stakes in Apple Inc., worth roughly $145.5 billion, up from 127 hedge funds in the preceding quarter, with stakes worth approximately $131 billion.
On October 15, Evercore ISI analyst Amit Daryanani maintained an Outperform rating on Apple Inc., alongside a $180 price target on the company’s shares, noting that the firm is gaining some share in the digital ads market
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Apple Inc.. Here is what the fund said:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
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This article is originally published at Insider Monkey.
