In this article we discussed Buffett’s top 7 stock picks. To see more of Buffett’s favorite stocks, click Warren Buffett’s Top Favorite Stocks for 2024.
7. Davita Inc. (NYSE:DVA)
Warren Buffett’s Q1 2024 Stake: $4,982,993,438
Denver, Colorado-based kidney dialysis services company Davita Inc. (NYSE:DVA) has been one of the top favorite Warren Buffett stocks for a long time, as the Oracle of Omaha’s Berkshire has been holding stakes in Davita Inc. (NYSE:DVA) since the last quarter of 2011. Over the years Buffett has reduced and added to his position in Davita Inc. (NYSE:DVA), concluding the first quarter of 2024 with 36,095,570 shares of Davita Inc. (NYSE:DVA), worth over $4.9 billion.
Earlier this month Davita Inc. (NYSE:DVA) posted upbeat Q1 results. Adjusted EPS in the first quarter came in at $2.38, beating estimates by $0.49. Revenue in the period jumped about 7% to $3.07 billion, surpassing estimates by $50 million.
Ariel Global Fund stated the following regarding DaVita Inc. (NYSE:DVA) in its fourth quarter 2023 investor letter:
“We added positions in, leading providers of dialysis services, DaVita Inc. (NYSE:DVA) and Fresenius Medical Care AG & Co. Fresenius Medical Care AG & Co. is the worldwide leader in the treatment of renal disease, while Davita, Inc. administers its services to over 2,700 outpatient dialysis centers across 45+ states and operates over 350 outpatient dialysis centers in 12 total countries. The shares of each company came under pressure following the release of clinical data on the efficacy of glucagon-like-peptide-1 (GLP-1) weight-loss drugs and their potential to negatively impact the demand for dialysis, providing us with attractive entry points in both names. Even assuming high rates of both uptake and effectiveness, we believe the overall impact on dialysis volumes will be small in the near-to-medium term. We also think the cardio protective effects of the GLP-1 class may enable patients to live longer, thereby increasing the overall size of the end-stage renal disease incidence pool. We believed the market misunderstood the actual long-term clinical impact on dialysis and were able to purchase at attractive valuation levels.”
6. Chubb Ltd (NYSE:CB) [Buffett’s Mystery Stock Pick]
Warren Buffett’s Q1 2024 Stake: $6,717,644,659
Chubb Ltd (NYSE:CB) is the mystery stock pick of Warren Buffett that he finally revealed in his latest Q1 filings for Berkshire Hathaway. Berkshire’s filings for the third and fourth quarter of 2023 showed that the fund had omitted at least one holding, requesting special treatment from the SEC. The market kept speculating what stock this might be over the past few months. Latest data shows Berkshire has been building stakes in the commercial property, casualty insurance company since the second half of 2023. As of the end of March 2024, Berkshire owns a $6.7 billion stake in Chubb Ltd (NYSE:CB).
Chubb Ltd (NYSE:CB) shares have gained about 26% over the past one year.
Aristotle Atlantic Core Equity Strategy made the following comment about Chubb Limited (NYSE:CB) in its third quarter 2023 investor letter:
“Chubb Limited (NYSE:CB) contributed to outperformance due to sustained momentum across business units and global regions, a favorable property and casualty (P&C) rate environment and an attractive valuation with shares trading below historical averages. The company’s earnings report early in the quarter highlighted its underwriting and risk-assessment capabilities, with management projecting a continuation of what we believe are positive pricing trends through the remainder of this year.”
5. Moodys Corp (NYSE:MCO)
Warren Buffett’s Q1 2024 Stake: $9,695,962,848
Berkshire Hathaway owns a $9.6 billion stake in Moodys Corp (NYSE:MCO), the New York-based credit rating and financial data company. Buffett has made almost no changes to his stakes in Moodys Corp (NYSE:MCO) since the last quarter of 2013, which shows the trust he has in Moodys Corp (NYSE:MCO) business.
Moodys Corp (NYSE:MCO) shares have rewarded the billionaire, having grown by about120% over the past five years.
L1 Capital International Fund made the following comment about Moody’s Corporation (NYSE:MCO) in its Q3 2023 investor letter:
“Portfolio adjustments during the September 2023 quarter were modest, diversified, but meaningful. In total around 10% of the Fund was divested and reinvested into opportunities we consider provide a superior risk-adjusted base case return.
We continued to trim our investment in high-quality technology businesses such as Intuit, mentioned previously. These adjustments were purely for valuation considerations, rather than any business concerns and some of these companies remain significant portfolio holdings.
The Fund’s remaining investment in Moody’s Corporation (NYSE:MCO)’s was fully divested during the September quarter. Moody’s is the world’s leading credit rating, risk assessment and analytics business. The core credit ratings business is largely a duopoly with S&P Global, with modest competition from Fitch Ratings and regional competitors – a great example of our preferred ‘Noah’s Ark’ industry structure.
The share price of Moody’s has been volatile over recent times, often reacting too greatly to changes in short-term capital markets conditions. During the quarter we took advantage of positive market sentiment to divest our holding at a share price we considered to be above fair value. Moody’s is very well managed and ‘ticks all our boxes’ for one of the world’s highest-quality businesses. The company has moved from our Portfolio to our Bench of potential investments. Having a Bench of ‘ready to go’ investment opportunities is a core aspect of our investment process. We continue to analyse Moody’s as if we owned it and are excited by the pull-back in the share price from recent highs.”
