In this article, we discuss the 10 stocks that Warren Buffett loaded up on for the rest of 2022. If you want to see more stocks in this selection, click Warren Buffett Loaded Up on These 5 Stocks for the Rest of 2022.
Despite the high inflation and rising rates battering the US economy since the beginning of 2022, and threats of a recession that still aren’t completely abated, Warren Buffett of Berkshire Hathaway has not lost faith in the US equity market. Buffett, who has achieved legendary status over the years due to his investing prowess and billions in fortune, has been on a buying spree despite the turbulent stock market, which lends some confidence to investors about the US economy and where the financial markets are headed. Berkshire Hathaway strengthened its hold on previous securities and reportedly purchased about $3.8 billion in stocks during the second quarter, in addition to buying over $40 billion in shares during the first quarter.
Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-A) also experienced the impact of a slowing economy, high inflation, tighter labor markets, and rising rates in Q2 2022. While the company posted operating earnings of $9.283 billion in the second quarter of 2022, which represents a 38.8% increase from the prior-year quarter, it made a $53 billion loss on its investments during the June quarter. However, according to a CNBC report dated August 6, Warren Buffett did not give much importance to these losses and said in a statement to investors:
“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.”
Some of the most prominent stocks that Warren Buffett loaded up on for the rest of 2022 include Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Occidental Petroleum Corporation (NYSE:OXY).
Our Methodology
We used the Q2 2022 portfolio of Warren Buffett’s Berkshire Hathaway for this analysis, selecting the stocks where the billionaire boosted his stake during the quarter. We have arranged the list according to the hedge fund sentiment around the securities as of Q1 2022, which was gauged from Insider Monkey’s database of 900+ elite hedge funds.
Warren Buffett Loaded Up on These Stocks for the Rest of 2022
10. Markel Corporation (NYSE:MKL)
Number of Hedge Fund Holders: 29
Markel Corporation (NYSE:MKL) is a Virginia-based financial holding company that specializes in insurance products in the United States, Bermuda, the United Kingdom, Europe, Canada, the Asia Pacific, and the Middle East. Warren Buffett added Markel Corporation (NYSE:MKL) to his portfolio in Q1 2022 and boosted his position in the company by 12% in Q2. The Berkshire portfolio held 467,611 shares of Markel Corporation (NYSE:MKL) at the end of the June quarter, worth $604.7 million.
On August 5, Truist analyst Mark Hughes reaffirmed a Hold rating on Markel Corporation (NYSE:MKL) but lowered the price target on the shares to $1,300 from $1,500 after its Q2 results. The management stated that although Markel Corporation (NYSE:MKL) is not presently experiencing higher claim frequency or loss severity within the majority of its general liability product lines, the company is reaching reductions to prior year reserves more carefully given the possible volatility due to inflation and economic uncertainty, the analyst informed investors.
According to Insider Monkey’s data, 29 hedge funds were bullish on Markel Corporation (NYSE:MKL) at the end of March 2022, compared to 37 funds in the prior quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital is a prominent stakeholder of the company, with 98,750 shares worth $145.6 million.
Like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Occidental Petroleum Corporation (NYSE:OXY), Warren Buffett strenghened his stake in Markel Corporation (NYSE:MKL) during the June quarter.
Here is what Weitz Investment Management Partners III Opportunity Fund has to say about Markel Corporation (NYSE:MKL) in its Q1 2022 investor letter:
“The quarter’s standout performers were a pair of insurers Markel (NYSE:MKL). Insurers typically benefit from a strong economy, as pricing tends to improve and the volume of risk to be insured grows. We also expect higher interest rates to translate into higher investment income as insurers recycle premium “float” into higher-yielding securities. Markel possesses terrific management and top marks as an opportunistic capital allocator.”
9. Celanese Corporation (NYSE:CE)
Number of Hedge Fund Holders: 36
Celanese Corporation (NYSE:CE) is a Texas-based technology and specialty materials company that manufactures engineered polymers in the United States and internationally. The company operates through three segments – Engineered Materials, Acetate Tow, and Acetyl Chain. Berkshire Hathaway added Celanese Corporation (NYSE:CE) to its portfolio in Q1 2022. In Q2, the hedge fund lifted its stake by 17%, holding 9.15 million shares worth over $1 billion.
On July 28, Celanese Corporation (NYSE:CE) announced its Q2 results, posting earnings per share of $4.99 and a revenue of $2.49 billion, outperforming market consensus by $0.43 and $92.89 million, respectively. On August 2, Deutsche Bank analyst David Begleiter maintained a Buy rating on Celanese Corporation (NYSE:CE) but lowered the price target on the stock to $140 from $175 following the “solid” Q2 report.
According to Insider Monkey’s Q1 data, Celanese Corporation (NYSE:CE) was part of 36 hedge fund portfolios, compared to 35 funds in the earlier quarter. Brandon Haley’s Holocene Advisors is a significant position holder in the company as of Q1 2022, with 1.5 million shares worth $223.25 million.
Here is what Vltava Fund has to say about Celanese Corporation (NYSE:CE) in its Q1 2022 investor letter:
“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.”
8. Paramount Global (NASDAQ:PARA)
Number of Hedge Fund Holders: 40
Paramount Global (NASDAQ:PARA) is a New York-based media and entertainment company. Paramount Global (NASDAQ:PARA) was added to the Berkshire portfolio in Q1 2022. The hedge fund elevated its position in the stock by 14% in Q2, holding 78.4 million shares worth about $2 billion. On August 4, Paramount Global (NASDAQ:PARA) posted its second quarter results, announcing an EPS of $0.64 and a revenue of $7.78 billion, topping market estimates by $0.02 and $228.19 million, respectively.
Deutsche Bank analyst Bryan Kraft on August 5 reiterated a Buy recommendation on Paramount Global (NASDAQ:PARA) but lowered the price target on the stock to $32 from $35. Paramount Global (NASDAQ:PARA)’s Q2 results exceeded expectations, but the softer macroeconomic backdrop, lower affiliate revenue, and reduced Studio profit in the second half of 2022 drove numbers lower, the analyst told investors.
Among the hedge funds tracked by Insider Monkey, John W. Rogers’ Ariel Investments held a prominent stake in the company as of Q1 2022, comprising 5.6 million shares worth $213.2 million. Overall, 40 hedge funds were bullish on the stock at the end of March 2022, compared to 64 funds in the preceding quarter.
7. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 49
Ally Financial Inc. (NYSE:ALLY) is a Michigan-based digital financial-services company that operates in the United States and Canada. The company has four segments – Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations. Warren Buffet added Ally Financial Inc. (NYSE:ALLY) to his holdings in the first quarter of 2022, and in Q2, he boosted his stake by a whopping 235%. The billionaire owned 30 million Ally Financial Inc. (NYSE:ALLY) shares in the second quarter of 2022, worth $1 billion, representing 0.33% of the total 13F securities.
On July 25, Piper Sandler analyst Kevin Barker downgraded Ally Financial Inc. (NYSE:ALLY) to Underweight from Neutral with a price target of $34, down from $45. The analyst cited the constraints in the auto market and increased funding costs for the downgrade. The present macro outlook will potentially add “material headwinds” for Ally Financial Inc. (NYSE:ALLY), given the higher default rates and a steep jump in funding costs, the analyst told investors. He sees negative catalysts emerging for Ally Financial Inc. (NYSE:ALLY) due to its high leverage relative to peers.
According to Insider Monkey’s data, Ally Financial Inc. (NYSE:ALLY) was part of 49 hedge fund portfolios at the end of Q1 2022, compared to 48 funds in the last quarter. In Q1, Harris Associates held the biggest position in the company, consisting of 26.6 million shares worth $1.16 billion.
Here is what Oakmark Fund has to say about Ally Financial Inc. (NYSE:ALLY) in its Q2 2022 investor letter:
“As for Ally Financial, fears of a recession drove the stock price down more than 20% for the period, but business fundamentals have remained strong and the shares now trade for just a mid-single-digit multiple of current earnings. We believe today’s price ignores the funding cost improvements and well-capitalized nature of Ally’s balance sheet. We continue to own both investments given their significant discounts to our estimates of business value.”
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Chevron Corporation (NYSE:CVX) is an American multinational energy corporation. Warren Buffett has owned a stake in Chevron Corporation (NYSE:CVX) since Q3 2020. In the second quarter of 2022, the Oracle of Omaha boosted his position by 2%. His Berkshire portfolio featured 161.4 million Chevron Corporation (NYSE:CVX) shares worth $23.3 billion, representing 7.78% of the total 13F securities.
On July 27, Chevron Corporation (NYSE:CVX) declared a $1.42 per share quarterly dividend, in line with previous. The dividend is distributable on September 12, to shareholders of record on August 19. The stock delivers a dividend yield of 3.63% as of August 16. The company also posted market-beating second quarter results.
Cowen analyst Charles Ryhee on August 15 raised the price target on Chevron Corporation (NYSE:CVX) to $120 from $119 and kept an Outperform rating on the shares. The analyst contended he remains optimistic on Chevron Corporation (NYSE:CVX) as he adjusted his estimates to factor in higher Q2 guidance. He said his latest estimates have a more positive outlook for Retail/LTC and robust results in HCB and PBM.
According to Insider Monkey’s Q1 data, 53 hedge funds were long Chevron Corporation (NYSE:CVX), with collective stakes worth about $28 billion. Ken Fisher’s Fisher Asset Management is a prominent shareholder of the company, with 6.5 million shares worth more than $1 billion.
In addition to Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Occidental Petroleum Corporation (NYSE:OXY), smart investors are piling into Chevron Corporation (NYSE:CVX).
Here is what ClearBridge Investments Large Cap Value Strategy has to say about Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
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Disclosure: None. Warren Buffett Loaded Up on These 10 Stocks for the Rest of 2022 is originally published on Insider Monkey.
