In this article, we discuss the stocks Warren Buffett trusts despite suffering losses. If you want to read about some more stocks in Buffett’s portfolio, go directly to Warren Buffett Trusts in These 10 Stocks Despite Losses.
5. Celanese Corporation (NYSE:CE)
Berkshire Hathaway’s Stake Value: $1.07 billion
YTD Percentage Decline in Share Price as of August 21: 33.66%
Number of Hedge Fund Holders: 36
Celanese Corporation (NYSE:CE), formerly known as Hoechst Celanese, is an American technology and specialty materials company that operates as a global chemical leader in the production of differentiated chemistry solutions used in most major industries and consumer applications. Warren Buffett raised his stake in Celanese Corporation (NYSE:CE) by 17% in Q2, holding 9.15 million shares worth more than $1 billion.
On August 2, Barclays analyst Michael Leithead lowered the price target on Celanese Corporation (NYSE:CE) to $165 from $190 and kept an ‘Overweight’ rating on the shares. The analyst thinks the second quarter represented another solid quarter for the company, with the one negative in the quarter being its acetate tow margin weakness.
Among the hedge funds tracked by Insider Monkey, Lyrical Asset Management is a notable stakeholder of Celanese Corporation (NYSE:CE), with roughly 1.3 million shares worth $152 million. Overall, 36 hedge funds were bullish on the stock at the end of June 2022, with collective stakes amounting to $1.82 billion.
Here is what Vltava Fund had 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.”
4. U.S. Bancorp (NYSE:USB)
Berkshire Hathaway’s Stake Value: $5.5 billion
YTD Percentage Decline in Share Price as of August 21: 16.48%
Number of Hedge Fund Holders: 43
U.S. Bancorp (NYSE:USB) is an American bank holding company based in Minnesota. The company offers a variety of financial services, including lending and depository services, cash management, as well as investment management services.
On July 12, Citi analyst Keith Horowitz lowered his price target on U.S. Bancorp (NYSE:USB) to $50 from $53 and maintained a ‘Neutral’ rating on the shares. The analyst refreshed his U.S. bank models ahead of the second quarter earnings season, dropping his price targets to reflect the losses from the recent Federal Reserve stress test. According to Horowitz, a lot of uncertainty is priced into bank stocks, making the risk/reward setup for the group “very attractive.”
At the end of the second quarter of 2022, 43 hedge funds tracked by Insider Monkey owned stakes in U.S. Bancorp (NYSE:USB), up from 40 in the previous quarter. Those stakes held a collective value of over $6.54 billion. First Eagle Management was the company’s leading shareholder in Q2, owning a $439 million stake.
ClearBridge Investments mentioned U.S. Bancorp (NYSE:USB) in its Q4 2021 investor letter. Here is what the firm had to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We have increased our exposure to interest-rate sensitive banks by adding to existing positions in U.S. Bancorp.”
3. Moody’s Corporation (NYSE:MCO)
Berkshire Hathaway’s Stake Value: $6.7 billion
YTD Percentage Decline in Share Price as of August 21: 20.53%
Number of Hedge Fund Holders: 48
Moody’s Corporation (NYSE:MCO) is an American business and financial services company that acts as the holding company for Moody’s Investors Service and Moody’s Analytics. The company provides investors with credit ratings, risk analysis, and research for stocks, bonds, and government entities.
On August 19, Oppenheimer analyst Owen Lau raised the price target on Moody’s Corporation (NYSE:MCO) to $348 from $313 and kept an ‘Outperform’ rating on the company’s shares. According to the analyst, there are early indicators, such as the most recent fund flows and IG/HY spreads, that point towards supply issuance and demand reaching equilibrium soon. Although Q3 issuance remains challenging, the analyst remains bullish on the long term trend and the company’s competitive position.
Chris Hohn’s TCI Fund Management was one of Moody’s Corporation (NYSE:MCO)’s largest investors among the funds tracked by our database, owning a $2.24 billion stake that consisted of 8.24 million shares. Overall, 48 hedge funds reported owning stakes in Moody’s Corporation (NYSE:MCO) as of the second quarter of 2022.
2. Snowflake Inc. (NYSE:SNOW)
Berkshire Hathaway’s Stake Value: $851.79 million
YTD Percentage Decline in Share Price as of August 21: 54.25%
Number of Hedge Fund Holders: 81
Snowflake Inc. (NYSE:SNOW) is a cloud computing data company. Warren Buffett’s Berkshire Hathaway owns 6.12 million shares of Snowflake Inc. (NYSE:SNOW) as of Q2, worth about $852 million. Despite a 54% year-to-date drop, billionaire Warren Buffett has not lost trust in Snowflake, Inc. (NYSE:SNOW).
Barclays analyst Raimo Lenschow raised the price target on Snowflake Inc. (NYSE:SNOW) to $210 from $158 and kept an ‘Overweight’ rating on the shares. According to the analyst, investors are likely searching for confidence that the company’s consumption model will remain strong in a more challenging spend environment and he expects “another quarter of elevated volatility post earnings.”
At the end of Q2 2022, 65 hedge funds were long Snowflake Inc. (NYSE:SNOW), holding stakes worth $5.12 billion in the company. This is compared to 81 positions in the previous quarter with stakes worth $9.73 billion. Brad Gerstner’s Altimeter Capital Management is the biggest stakeholder of the company, with 17 million shares worth $5.75 billion.
Here is what ClearBridge Aggressive Growth Strategy had to say about Snowflake Inc. (NYSE:SNOW) in its Q2 2022 investor letter:
“Snowflake operates a cloud-based data platform for small and medium-sized businesses and enterprise customers. The company is a key beneficiary of software spending moving to the cloud, as well as the increasing strategic importance of data. With the potential to address the large and growing market for data cloud, a roughly $250 billion plus opportunity by 2026, we see a long runway for growth ahead. Although the company is already profitable, we believe Snowflake still has significant room for free cash flow margin expansion.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Berkshire Hathaway’s Stake Value: $1.13 billion
YTD Percentage Decline in Share Price as of August 21: 21.58%
Number of Hedge Fund Holders: 252
One of the most prominent stocks in Warren Buffett’s investment portfolio, Amazon.com, Inc. (NASDAQ:AMZN) stock has dropped more than 21% year-to-date. The billionaire investor raised his stake in Amazon.com, Inc. (NASDAQ:AMZN) by 1,900% in Q2, giving him ownership of 10.6 million shares worth $1.13 billion, accounting for 0.37% of his total 13F portfolio’s exposure.
Amid August 17 reports that Amazon.com, Inc. (NASDAQ:AMZN) will impose an incremental $0.35 per item fee on Fulfilled By Amazon items sold in the U.S. or Canada during the holiday season, Morgan Stanley analyst Brian Nowak noted that this incremental fee comes after the company raised its FBA fees by about 5% earlier in the year. According to the analyst, the incremental fee will lead to about $570 million and $90 million in Q4 and Q1 EBIT respectively, and calls the move a “positive signal.” Nowak maintained an ‘Overweight’ rating and $175 price target on Amazon.com, Inc. (NASDAQ:AMZN) shares.
According to Insider Monkey’s Q2 data, 252 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 271 funds in the previous quarter. Skye Global Management is a prominent position holder in the company, with 15.4 million shares worth $1.6 billion.
Here is what Alphyn Capital had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:
“It is interesting to see how sentiment on Amazon went from positive to negative in one quarter, as it transpired that it too was not as immune to post-covid slowdowns as some, myself included, had expected. However, I feel confident that Amazon, as the apex predator in the e-commerce space, will navigate market softness better than most other retailers. Moreover, once it finishes with its current capex cycle, it will continue to improve margins. Andy Jassy is reportedly spending one-third of his time focused on capacity and supply issues in the retail division.”
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