We recently published a list of 10 Best Stocks to Buy According to Billionaire Warren Buffett. In this article, we are going to take a look at where Moody’s Corporation (NYSE:MCO) stands against other best stocks to buy according to billionaire Warren Buffett.
Known and admired for his success, wealth and philanthropy, Warren Buffett is still at the helm of his diversified holding company. From a struggling New England textile company in the 1960s, Buffett has grown Berkshire to a firm boasting a range of businesses from Geico insurance to BNSF Railway, an equity portfolio exceeding $267 billion, and a cash reserve of $334.20 billion at the end of 2024.
Given his success on the investment horizon – a result of decades of strong returns – it doesn’t come as a surprise that Buffett is often touted as one of the greatest investors of all time. In an attempt to mirror his trading activity, many investors search for what stocks is Warren Buffett buying today.
READ ALSO: Warren Buffett’s Portfolio: 15 Longest Held Stocks and 10 Stocks Warren Buffett and Insiders Are Crazy About.
The Oracle of Omaha focuses on companies with strong economic moats and undervalued assets, applying his well-known investment strategy – long-term value investing. Buffett is not that fond of diversification, as he is investing in businesses instead of stocks, picking those he understands.
While diversification as a risk mitigation technique is popular among those who are at the start of their investing journey, Buffett believes diversification could limit knowledge. He also doesn’t consider money the greatest investment tool, given his statement that “the best investment by far is anything that develops yourself, and it’s not taxed at all.”
Despite the strong market performance throughout much of 2024, Buffett appears to have taken a more cautious approach. With overinflated valuations due to high interest rates and deteriorating economic conditions in mind, he opted to sell off substantial stakes in companies whose valuations have become too high.
Buffett is also not fond of President Donald Trump’s tariffs on imports that sent shockwaves through global stock markets, even though his company’s Class B shares dipped 1.4% only on April 3, outperforming the broader market.
In the fourth quarter, Buffett’s 13F portfolio was comprised of a total of 38 security holdings and was worth roughly $267 billion, slightly up from $266 billion in the third quarter. Given that Buffett doesn’t like to diversify much, his top ten holdings account for nearly 90% of his 13F portfolio.
Our Methodology
To make the list of Warren Buffett’s top portfolio holdings we reviewed Berkshire’s fourth-quarter 2024 portfolio and ranked the list according to the hedge fund’s stake value in each firm. If there was an overlap, we prioritized the holding that was worth more money. We have also assessed the number of shares acquired by Berkshire Hathaway and hedge fund sentiment toward each stock from Insider Monkey’s database of hedge investor letters.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373% since May 2014, beating its benchmark by 218 percentage points (see more details here).
That said, please see if there are overlaps between our compilation of the 10 longest-held stocks by The Oracle of Omaha wrapped up in November, and a new list of Warren Buffett’s top portfolio holdings.
Moody’s Corp (NYSE:MCO)
Portion of portfolio: 4.37%
Value of holdings: $11,677,932,812
The financial data firm Moody’s Corporation (NYSE:MCO) remains a dominant force in the credit ratings and financial analytics industry offering credit research, credit models, analytics, and economic data as part of its risk management services.
Buffett maintained his ownership stake in one of his top portfolio holdings during the fourth quarter holding 24,669,778 of its shares.
Veteran data provider announced its fourth quarter and full-year 2024 financial results on February 13 revealing a 13% year-over-year increase in revenue for the period, but missing analysts’ estimates by $40.6 million. Fourth-quarter 2024 adjusted earnings totaled $2.62 per share, outpacing the Zacks Consensus Estimate of $2.60. The company is optimistic regarding its future growth relying on innovation and expectations of macroeconomic stability. For the full year, the company saw revenue increase 20% year-over-year.
The strong first-quarter number released last week beat expectations with revenues of $1.9b arriving 2.5% ahead of estimates. Statutory earnings per share (EPS) were $3.46, 6.0% also ahead of forecasts.
The company generates revenue from its two subscription-based services and fees for its ratings and analytics. Moody’s Investors Service (MIS) accounts for 60% of total revenue, being the core provider of profitability, while Moody’s Analytics (MA) division accounts for the remaining 40% of revenue. Over 80% of Moody’s overall revenue is recurring, out of which 57% comes from the United States, 28% from Europe, the Middle East, and Africa (EMEA), 11% from the Asia-Pacific region, and 4% from Latin America.
Even though it faces competitive pressures from S&P Global’s broader service offerings, specialization in credit risk and regulatory compliance is what positions Moody’s as a ‘go-to’ place for financial institutions that are in search of deep expertise in these areas, according to a bullish thesis on Moody’s Corporation (MCO) on Substack by Business Model Mastery.
Citi initiated coverage of Moody’s with a price target of $565 and a Buy rating in December, expressing optimism about the company’s outlook.
Year-to-date the company’s stock has lost 7,13% in its value, trading at $439.63 per share on April 24 at the time of writing.
Overall, MCO ranks 7th on our list of best stocks to buy according to billionaire Warren Buffett. While we acknowledge the potential of MCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MCO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.