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.”
4. Kraft Heinz Co (NASDAQ:KHC)
Warren Buffett’s Q1 2024 Stake: $12,015,924,784
Illinois-based food company Kraft Heinz Co (NASDAQ:KHC) is one of the top favorite stocks of Warren Buffett. Kraft has a dividend yield of about 4.5%. Warren Buffett’s Berkshire owns a $12 billion stake in Kraft Heinz Co (NASDAQ:KHC) as of the end of March 2024.
Earlier this month Kraft Heinz posted first quarter results, which show that Kraft Heinz Co’s (NASDAQ:KHC) adjusted EPS in the period came in at $0.69, meeting estimates. Revenue in the quarter slipped 1.2% year over year to $6.41 million, missing estimates by $20 million. Over the past one year the stock has lost about 8% in value. However, in the last five years, the stock went up 10%.
3. Occidental Petroleum Corp (NYSE:OXY)
Warren Buffett’s Q1 2024 Stake: $16,118,698,139
Warren Buffett’s Berkshire Hathaway owns a $16.1 billion stake in Occidental Petroleum Corp (NYSE:OXY), which makes the Texas-based oil company one of the billionaire’s top favorite stocks for 2024. So far this year Occidental Petroleum Corp (NYSE:OXY) shares have gained about 5.5%.
2. Chevron Corp (NYSE:CVX)
Warren Buffett’s Q1 2024 Stake: $19,398,897,853
Warren Buffett started building stakes in Chevron Corp (NYSE:CVX) back in 2020. He then reduced his exposure to the oil company for a few quarters, before piling into the stock again. As of the end of the first quarter of 2024, Chevron Corp (NYSE:CVX) accounts for about 5.8% of the total portfolio of Berkshire Hathaway.
Chevron Corp (NYSE:CVX) shares have gained about 9% so far this year.
Carillon Eagle Growth & Income Fund stated the following regarding Chevron Corporation (NYSE:CVX) in its fourth quarter 2023 investor letter:
“Chevron Corporation (NYSE:CVX) traded lower, along with oil prices, and issued a disappointing earnings announcement due to overseas refining losses. Separately, the company announced an agreement to buy another energy company with operations offshore of Guyana, as well as in North Dakota, the Gulf of Mexico, and the Gulf of Thailand. This is a strategic acquisition for very little takeout premium.”
1. Coca-Cola Co (NYSE:KO)
Warren Buffett’s Q1 2024 Stake: $24,472,000,000
With more than 60 years of consecutive dividend increases and a solid business that remains steady and unscathed even during recessions and market downturns, Coca-Cola Co (NYSE:KO) is one of the best stocks in Warren Buffett’s portfolio. Buffett has time and again talked about and praised Coca-Cola Co’s (NYSE:KO) dividends.
In his 2023 letter to investors, Buffett wrote that he believes Coca-Cola Co (NYSE:KO) will almost “certainly” increase its dividend and he will “most certainly” leave his position Coca-Cola Co (NYSE:KO) “untouched.” Buffett’s comments really show the trust Coca-Cola Co (NYSE:KO) has developed with the billionaire with its performance:
“During 2023, we did not buy or sell a share of either AMEX or Coke – extending our own Rip Van Winkle slumber that has now lasted well over two decades. Both companies again rewarded our inaction last year by increasing their earnings and dividends. Indeed, our share of AMEX earnings in 2023 considerably exceeded the $1.3 billion cost of our long-ago purchase. Both AMEX and Coke will almost certainly increase their dividends in 2024 – about 16% in the case of AMEX – and we will most certainly leave our holdings untouched throughout the year. Could I create a better worldwide business than these two enjoy? As Bertie will tell you: “No way.” Though Berkshire did not purchase shares of either company in 2023, your indirect ownership of both Coke and AMEX increased a bit last year because of share repurchases we made at Berkshire. Such repurchases work to increase your participation in every asset that Berkshire owns. To this obvious but often overlooked truth, I add my usual caveat: All stock repurchases should be price-dependent. What is sensible at a discount to business-value becomes stupid if done at a premium. The lesson from Coke and AMEX? When you find a truly wonderful business, stick with it. Patience pays, and one wonderful business can offset the many mediocre decisions that are inevitable.”
Read Buffett’s full letter here.
Hayden Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its third 2023 investor letter:
“It’s not just emerging markets either, where one could argue a “scarcity premium” given fewer quality public companies. Even in the US, The Coca-Cola Company (NYSE:KO) trades at ~30x P/E despite having the same earnings as 10 years ago.
Both of these companies actually have lower revenues than 10 – 15 years ago too, indicating that their profit growth is mostly from margin expansion. This can only last for so long before there’s no more excess expenses left to cut.
I find it ironic that all these companies trade as “bond-equivalents” in the minds of investors – even commanding lower yields than US treasuries, the safest security in the world. But it’s clear that their businesses are not nearly as safe. Coca-Cola is facing disruption risk from consumers shifting to new, heathier beverage brands.
But these companies are ~35% more expensive than US Treasuries, despite the heightened risk. On a risk-adjusted basis, one could argue the implied premium is even higher.”
Perhaps the explanation is simply the price volatility difference between these stocks and treasuries over the last two years. For example, 10-year Treasury bonds are down ~-20% since the beginning of 2022. By comparison, KO and PG are remarkably down only -4 – 6% over that time frame.”
To see the biggest 3 holdings of Warren Buffett, click Warren Buffett’s Top Favorite Stocks for 2024.
