In this article, we discuss Warren Buffett’s 8 new stock picks in 2022. If you want to read about some more Buffett stock picks, go directly to ‘Greedy When Others are Fearful’: Warren Buffett’s 4 New Stock Picks in 2022.
There are few value investors who have accumulated as much fame as Warren Buffett of Berkshire Hathaway, the Omaha-based hedge fund with a portfolio value of over $363 billion at the end of the first quarter of 2022. As interest rates rise and inflation soars, investors have been eagerly waiting for Buffett to give his take on the latest crisis enveloping the stock market. His trading activity, disclosed through mandatory 13F filings, has also attracted a lot of interest since Buffett is famous for being “greedy when others are fearful”.
Speaking at the annual shareholder meeting of Berkshire Hathaway in late April, Buffett reiterated his long-held position that inflation did not affect products that people liked in the long run, noting that the “best thing a person could do is invest in a wonderful business that makes products that are in demand regardless of the performance of the dollar”. Buffett also took a stance against rampant speculation in stocks, comparing the marketplace to a “gambling parlor” and once again stressing that he would not buy Bitcoin since it produced nothing of value.
Buffett also conceded that inflation was affecting his portfolio as well, highlighting that inflation swindled stock and bond investors alike. He further claimed that inflation “swindles the person who keeps their cash under their mattress, it swindles almost everybody”. The latest moves that Buffett has made at the market outline these thoughts in more detail. Some of the top stocks in the investment portfolio of Berkshire Hathaway include Apple Inc. (NASDAQ:AAPL), Bank of America Corporation (NYSE:BAC), and American Express Company (NYSE:AXP).
The legendary investor has embarked on a buying spree as the market becomes more volatile, following a pattern of buying the dip on certain sectors in an economic crisis. Buffett did this during the dotcom crash in 2000 and the housing crash of 2008. In the first three months of 2022, Buffett bought eight new stakes in companies in the financial, healthcare, and energy sectors. For an investor whose top holdings have been consistent for the past ten years, this represents a whole new outlook on the market.
During the first quarter of 2022, the portfolio value of Berkshire Hathaway rose by $33 billion, compared to filings for the fourth quarter of 2021. In the first three months of 2022, the hedge fund led by Buffett made new purchases in eight stocks, additional purchases in seven equities, sold out of 3 firms, and reduced holdings in four companies. The top ten holdings of the fund comprise more than 87% of the overall portfolio.
Our Methodology
The companies listed below were picked from the investment portfolio of Berkshire Hathaway at the end of the first quarter of 2022. The stocks that are a new addition to the portfolio, compared to filings for the fourth quarter of 2021, were selected. Data from around 900 elite hedge funds tracked by Insider Monkey in Q4 2021 was used to identify the number of hedge funds that hold stakes in each firm.
‘Greedy When Others are Fearful’: Warren Buffett’s New Stock Picks in 2022
8. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 58
Occidental Petroleum Corporation (NYSE:OXY) is an integrated oil and gas firm. Buffett opened a new position in the stock in early 2022 comprising over 136 million shares worth $7.7 billion, representing 2.12% of the Q1 portfolio. The company was last featured in the Berkshire portfolio in late 2019 and early 2020. That position, comprising close to 19 million shares purchased at an average price of $40 per share, was closed in the first quarter of 2020. Occidental stock has climbed in recent months as oil prices reach record highs amid supply disruptions from Russia.
On May 12, Susquehanna analyst Biju Perincheril maintained a Positive rating on Occidental Petroleum Corporation (NYSE:OXY) stock and raised the price target to $73 from $71, noting that the firm was on track to pay down debt before a $3 billion share buyback program.
At the end of the fourth quarter of 2021, 58 hedge funds in the database of Insider Monkey held stakes worth $3.8 billion in Occidental Petroleum Corporation (NYSE:OXY), compared to 60 the preceding quarter worth $3.1 billion.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Occidental Petroleum Corporation (NYSE:OXY), with 26 million shares worth more than $1.5 billion.
Just like Apple Inc. (NASDAQ:AAPL), Bank of America Corporation (NYSE:BAC), and American Express Company (NYSE:AXP), Occidental Petroleum Corporation (NYSE:OXY) is one of the stocks that elite investors are buying amid rising market volatility.
7. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 39
HP Inc. (NYSE:HPQ) is a personal computing firm. In late March, the company announced that it would be purchasing communications technology firm Poly in a deal worth $3.3 billion. The firm is seeking a more growth-oriented portfolio through the acquisition. At the end of the first quarter of 2022, Berkshire Hathaway owned over 104 million shares of the firm worth $3.7 billion, representing 1.04% of the portfolio. This is a new position of the fund since Berkshire has not previously held the stock.
On April 8, UBS analyst David Vogt downgraded HP Inc. (NYSE:HPQ) stock to Neutral from Buy with a price target of $40, highlighting that although the firm had solid execution, the shares were “likely to tread water” as the risk/reward profile was now balanced.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in HP Inc. (NYSE:HPQ), with 3 million shares worth more than $114 million.
At the end of the fourth quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $963 million in HP Inc. (NYSE:HPQ), compared to 34 the preceding quarter worth $1 billion.
6. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 97
Citigroup Inc. (NYSE:C) is a diversified financial services firm. Continuing on his well-known strategy of buying the dip on financials, Buffett purchased over 55 million shares of the company worth close to $3 billion in the first quarter of 2022, representing 0.81% of the portfolio. In earnings results for the first quarter of 2022, Citigroup beat market expectations on earnings per share and revenue by $0.56 and $1.1 billion respectively. The shares of the firm have soared in the past few months as interest rates rise.
On May 3, Oppenheimer analyst Chris Kotowski maintained an Outperform rating on Citigroup Inc. (NYSE:C) stock and lowered the price target to $93 from $100, underlining that loan growth and rising interest rates were good for the banks.
At the end of the fourth quarter of 2021, 97 hedge funds in the database of Insider Monkey held stakes worth $6.6 billion in Citigroup Inc. (NYSE:C), compared to 79 the preceding quarter worth $5.5 billion.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Citigroup Inc. (NYSE:C), with 26 million shares worth more than $1.4 billion.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:
“We fully exited position in Citigroup Inc. (NYSE:C). Global financial services company Citigroup Inc. (NYSE:C) made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
5. Paramount Global (NASDAQ:PARA)
Number of Hedge Fund Holders: 64
Paramount Global (NASDAQ:PARA) is a media and entertainment firm. Latest 13F data shows that Berkshire opened a new position in the stock comprising over 68 million shares worth $2.6 billion, representing 0.71% of the portfolio in the first quarter of 2022. In earnings results for the first quarter, the company reported a 95% growth in streaming subscription revenue. The total streaming subscriptions for the firm grew over 62 million after 6.8 million additions to the streaming platform of the firm in early 2022.
On May 7, investment advisory Deutsche Bank maintained a Buy rating on Paramount Global (NASDAQ:PARA) stock and lowered the price target to $43 from $45. Analyst Bryan Kraft issued the ratings update.
At the end of the fourth quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Paramount Global (NASDAQ:PARA), the same as in the previous quarter worth $1.2 billion.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Ariel Investments is a leading shareholder in Paramount Global (NASDAQ:PARA), with 5.6 million shares worth more than $213 million.
Along with Apple Inc. (NASDAQ:AAPL), Bank of America Corporation (NYSE:BAC), and American Express Company (NYSE:AXP), Paramount Global (NASDAQ:PARA) is one of the stocks that hedge funds are monitoring.
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Disclosure. None. ‘Greedy When Others are Fearful’: Warren Buffett’s 8 New Stock Picks in 2022 is originally published on Insider Monkey.
