We recently published a list of Warren Buffett’s 10 Longest-Held Stocks. In this article, we are going to take a look at where VeriSign, Inc. (NASDAQ:VRSN) stands against other Warren Buffett’s longest-held stocks.
‘The Oracle of Omaha’
Known as the Oracle of Omaha, Warren Buffett will undoubtedly go down as one of the greatest and most prosperous value investors in history. During the booming stock market of the 1960s, the billionaire investor used his investment partnership to purchase Berkshire Hathaway, a struggling textile company in New England, which now stands as a global titan.
Buffett has often underlined the need to fully know the internal operations of a company before making any investments. His strategy focuses on finding companies with strong, scalable models that are ready for expansion and market leadership, as well as those that have much to gain from a subsequent increase in stock value. Both investors and market analysts have frequently praised this methodical, long-term investment strategy, particularly in light of Berkshire becoming one of the most recent non-tech companies to reach a $1 trillion market capitalization.
However, despite a generally strong market performance for much of 2024, Buffett appears to have shifted towards a more defensive stance. As interest rates climbed and economic conditions weakened, Buffett significantly reduced his holdings in companies experiencing rapid valuation increases. By late 2024, Berkshire had amassed over $325 billion in cash and cash equivalents, predominantly held in U.S. Treasury bills. This suggested that Berkshire avoided making major investments in popular stocks, even during periods of market optimism. That said, Warren Buffett’s decision to hoard cash might not be a random one. In fact, it mirrors strategies he has used in the past during previous financial downturns. As an example, the billionaire adopted a somewhat similar approach at the onset of the dot-com bubble in the early 2000s and again in the lead-up to the 2007-2008 financial crisis. In both these instances, Buffett foresaw market turbulence and positioned Berkshire to navigate the challenges by maintaining substantial liquidity.
Warren Buffett’s Stance on Cryptocurrency
Warren Buffett has repeatedly stated that he is not a fan of cryptocurrency. During Berkshire’s 2018 annual shareholder meeting, Buffett called Bitcoin “probably rat poison squared.” In Berkshire’s 2022 shareholder meeting, the billionaire once again stated:
“If you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything.”
Recent reports, however, indicate that the Oracle of Omaha seems to be softening his stance on cryptocurrencies. Berkshire has invested in Nu Holdings, a digital banking company based in Brazil that supports the cryptocurrency market and operates its own platform. In a 2021 Series G funding round, Buffett’s company contributed $500 million, followed by another $250 million. Nubank Crypto, Nu’s cryptocurrency platform, was launched in 2022 and supports Bitcoin, Ethereum, and Polygon. Berkshire’s stake in Nu increased from 0.1% in the fourth quarter of 2022 to 0.4% in the third quarter of fiscal 2024.
Our Methodology
To create our list of Warren Buffett’s longest-held stocks, we analyzed his Q3 2024 investment portfolio and selected stocks that he has consistently held for the longest duration. These figures were sourced from the Insider Monkey Database.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up view of an engineer deploying a new piece of internet infrastructure.
VeriSign, Inc. (NASDAQ:VRSN)
Warren Buffett’s First Major Purchase: 2012
Berkshire Hathaway’s stake in Q3 2024: $2.43 billion
VeriSign, Inc. (NASDAQ:VRSN), a multinational provider of network infrastructure and domain name registry services, serves as the sole registry for the .com and .net domains. Berkshire recently spent about $45.4 million to add approximately 234,000 shares to its VRSN holdings. Buffett now owns a 14% stake in VeriSign, Inc. (NASDAQ:VRSN), with 13.3 million shares worth approximately $2.7 billion in Q4 2024.
Baird upgraded VeriSign (NASDAQ:VRSN) stock back in December, moving the rating from Neutral to Outperform and raising the price target to $250 from $200. The decision followed a period of underperformance relative to the S&P 500, with VeriSign’s shares remaining roughly flat over the last five years while the S&P 500 has grown. According to Baird, regulatory concerns that had previously weighed on VeriSign’s stock have been resolved, allowing the company to refocus on its domain growth strategy.
VeriSign’s third quarter 2024 results showed a modest 3.8% increase in revenue to $391 million, as well as a 13.1% increase in earnings per share to $2.07. During the quarter, the company repurchased 1.7 million shares for $301 million and maintained a steady liquidity position of $645 million in cash.
Overall, VRSN ranks 7th on our list of Warren Buffett’s longest-held stocks. While we acknowledge the potential of VRSN, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VRSN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.