In this article, we discuss Warren Buffett’s stock portfolio and his 5 recent buys. If you want to read about some more stocks in the Buffett portfolio, go directly to Buffett Stock Portfolio: Warren Buffett’s Recent Buys.
5. Celanese Corporation (NYSE:CE)
Number of Hedge Fund Holders: 36
Celanese Corporation (NYSE:CE) a technology and specialty materials company, manufactures and sells high-performance engineered polymers in the United States and internationally. Berkshire Hathaway bought Celanese Corporation (NYSE:CE) stock in the first quarter of 2022. At the end of the third quarter of 2022, this holding comprised 9.7 million shares worth $877.2 million. This makes up 0.29 % portion of its total investment. On November 3, Celanese Corp announced its third-quarter earnings with earnings per share of $3.94, missing the estimates by $0.03, while the revenue was $2.3 billion, up by 1.3% year-over-year, beating estimates by $40 million.
On January 5, Barclays analyst Michael Leithead maintained an Overweight rating on Axalta Coating Systems (NYSE: CE) stock and increased the price target to $30 from $28, noting that the chemicals industry is near the end of a cycle of negative earnings revisions and that Chinese demand is likely to bottom in Q1 of 2023.
Among the hedge funds being tracked by Insider Monkey, Omaha, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Celanese Corporation (NYSE:CE) with 9.7 million shares worth more than $877 million.
In its Q3 2022 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Celanese Corporation (NYSE:CE) was one of them. Here is what the fund said:
“We then used the money freed up to, among other things, open three new positions. The stock price declines during the Russian invasion brought a lot of good prices to the market. Out of all the possibilities we considered, we picked the stocks of Celanese (CE).
Celanese is the world’s largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomers and emulsions. Their applications are used in a wide range of industries, such as automotive tobacco, coatings, construction, energy, telecommunications, food, and medical. Celanese recently closed the acquisition of a large part of DuPont’s business, which will make Celanese an even bigger player in the industry while reducing the cyclicality of its business. The acquisition is quite large and should deliver significant value to shareholders that in our view is not at all presently reflected in the share price. Celanese is a business that stands more or less aside from the main interests of most investors, but it is a company with very high returns on capital, strong free cash flow, and historically very efficient resource allocation.”
4. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 42
Ally Financial Inc. (NYSE:ALLY) is a digital financial services company, that provides various digital financial products and services to consumer, commercial, and corporate customers primarily in the United States and Canada. Berkshire Hathaway bought Ally Financial Inc. (NYSE:ALLY) in the first quarter of 2022. At the end of the third quarter of 2022, this holding comprised 30 million shares worth $834.9 million. This makes up 0.28 % portion of its total investment. On January 20, 2023, Ally Financial Inc. posted their earnings for the fourth quarter, reporting earnings per share of $0.83, missing the analyst’s estimate by $-$0.07. The company’s revenue was $2.20B, beating the analyst’s estimate by $143.15M.
On January 2, BMO Capital analyst James Fotheringham maintained a Market Perform rating on Credit Acceptance (NYSE: ALLY) stock and increased the price target to $380 from $360, noting the company’s fourth-quarter earnings beat.
At the end of the third quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Ally Financial Inc. (NYSE:ALLY), compared to 42 in the preceding quarter worth $2.3 billion.
In its Q3 2022 investor letter, Moon Capital Management, an asset management firm, highlighted a few stocks and Ally Financial Inc. (NYSE:ALLY) was one of them. Here is what the fund said:
“We recently purchased shares of Ally Financial Inc. (NYSE:ALLY), the world’s largest digital-only bank. Ally’s legacy dates back more than 100 years when it was originally launched as GMAC, the in-house financing arm of General Motors. The company was spun out from GM and rebranded as Ally more than a decade ago but has retained an automotive focus on the lending side, where it holds the largest position in prime auto lending.
Since the spinoff, Ally has transformed from an auto loan company into a comprehensive, independent finance provider for borrowers and savers of all types. The company has completely restructured the liability side of its balance sheet and has created a deposit-gathering engine that is now more than 85 percent deposit funded. (Compared to issuing traditional corporate debt, deposits are a significantly less expensive capital source for banks.)
Due to the lower overhead associated with the digital bank’s lack of brick-and-mortar locations, the bank produces one of the best efficiency ratios in the industry. This low-cost position, combined with a relatively high loan portfolio yield of approximately 6.75 percent, has helped the company earn net interest margins well above those of many leading banks. These high margins translate into high returns on equity, which the company targets at 16-18 percent over the medium term. (Actual ROE in 2021 was 24 percent. When the company came public in 2014, its ROE was a paltry four percent.).read more
3. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 85
Citigroup Inc. (NYSE:C) is a diversified financial service holding company that provides various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. Berkshire Hathaway bought Citigroup Inc. (NYSE:C) stock in the first quarter of 2022. This holding, at the end of the third quarter of 2022, comprised 55.2 million shares worth $2.3 billion. This makes up 0.77 % portion of its total investment. On January 13, 2023, Citi Group Inc. posted their earnings for the fourth quarter, reporting earnings per share of $1.16, missing the analyst’s estimate by -$0.04. The company’s revenue was $18.01B, beating the analyst’s estimate by $3.35M.
On January 17, BofA analyst Ebrahim Poonawala maintained a Buy rating on Citigroup Inc. (NYSE: C) stock and increased the price target to $60 from $52, noting the management team’s efforts in navigating a year of exceptional volatility, building capital, executing the exit from certain consumer businesses, and largely adhering to the strategic plan outlined in last year’s investor day.
Among the hedge funds being tracked by Insider Monkey, Omaha, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Citigroup Inc. (NYSE:C) with 55.2 million shares worth more than $2.3 billion.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:
“Shares of Citigroup declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”
2. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 42
HP Inc. (NYSE:HPQ) provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. Berkshire Hathaway bought HP Inc. (NYSE:HPQ) in the first quarter of 2022. At the end of the third quarter of 2022, this holding was worth 104.5 million shares worth $2.6 billion. This makes up 0.87 % portion of its total investment. On November 22, the company posted their earnings for the fourth quarter of 2022, reporting earnings per share of $0.85, beating the analyst’s estimate by $0.01. The company’s revenue was $14.8 billion, beating the analyst’s estimate by $120 million.
On January 9, Bernstein analyst Toni Sacconaghi maintained a Market Perform rating on HP Inc. (NYSE: HPQ) stock and reduced the price target from $30 to $29, noting that the IT hardware industry as a sector is facing structural challenges and advises investors to focus on names that offer appealing valuations, clear earnings visibility, and a proven history of strong execution during a year of ongoing macroeconomic uncertainty.
At the end of the third quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $2.9 billion in HP Inc. (NYSE:HPQ), compared to 35 in the preceding quarter worth $3.7 billion.
Among the hedge funds being tracked by Insider Monkey, St. Petersburg, Florida-based investment firm ARK Investment Management is a leading shareholder in HP Inc. (NYSE:HPQ) with 205,534 shares worth more than $5.5 billion.
1. Markel Corporation (NYSE:MKL)
Number of Hedge Fund Holders: 32
Markel Corporation (NYSE:MKL) a diverse financial holding company, markets and underwrites specialty insurance products in the United States, Bermuda, the United Kingdom, the rest of Europe, Canada, the Asia Pacific, and the Middle East. Berkshire Hathaway bought Markel Corporation (NYSE:MKL) stock in the first quarter of 2022. This holding, at the end of the third quarter of 2022, was worth 647,611 shares worth of $506.99 million. This makes up 0.17 % portion of its total investment. On February 1, 2023, Markel Corporation posted its earnings for the fourth quarter, reporting earnings per share of $25.57, beating the analyst’s estimate by $7.53. The company’s revenue was $4.21B, beating the analyst’s estimate by $796.10M.
On December 22, Janney Montgomery Scott analyst Robert Farnam maintained a Buy rating on Markel (NYSE: MKL) stock and a $1,550 fair value estimate, noting that Markel’s main business involves offering specialty insurance products to niche markets that are often neglected or disregarded by other insurance companies.
Among the hedge funds being tracked by Insider Monkey, Omaha, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Citigroup Inc. (NYSE:C) with 467,611 shares worth more than $506.99 million.
In its Q4 2022 investor letter, Giverny Capital, an asset management firm, highlighted a few stocks and Markel Corporation (NYSE:MKL) was one of them. Here is what the fund said:
“The market really punished growth stocks that stopped growing, even if only temporarily. We own several businesses with long-term track records of compounding their earnings at double-digit rates, that trade for less than 15 times consensus estimates of 2023 earnings. Our insurers Markel Corporation (NYSE:MKL) and Berkshire Hathaway also trade for about 15 times their expected 2023 operating profit after we back out the value of their large portfolios of common stocks.
Not so long ago, a PE multiple of 15x was not considered inexpensive. But the current PE multiple for the overall stock market remains 17x 2023 estimates and the risk-free rate of return on 10-year US Treasuries is below 4%. I like our inexpensive growers more than either of those alternatives.
At the top of our performance list, Progressive Corp. rose 26% for the year as it generated outstanding results relative to other large auto insurers. Markel and Berkshire Hathaway rose modestly. The three companies compete in diverse lines of insurance, but they all benefit from rising rates for property coverage after an extended period of weather catastrophes, rising jury awards in lawsuits and inflated loss costs. Our insurers tend to be careful underwriters, so their profitability rises with rates. Our insurers also benefit from rising interest rates because they tend to invest premiums paid by customers into fixed-income securities until they pay claims.”
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