In this article, we discuss the 5 best stocks picks and performance of Warren Buffett in 2021. If you want to read our detailed analysis of these stocks, go directly to Warren Buffett’s Performance in 2021: 10 Best Stock Picks.
5. The Bank of New York Mellon Corporation (NYSE:BK)
Number of Hedge Fund Holders: 46
Gain in 2021: 39%
The Bank of New York Mellon Corporation (NYSE:BK) is one of many finance stocks in the Berkshire Hathaway portfolio. Like other big banks in his portfolio, Buffett invested in The Bank of New York Mellon Corporation (NYSE:BK) in late 2010, before selling off that stake in 2012. He then re-invested in the bank in the third quarter of 2013, adding to it significantly in 2017. The holding is now worth $3.7 billion and the fund last registered new activity around the stock more than a year ago.
The Bank of New York Mellon Corporation (NYSE:BK) is also high on the hedge fund radar as inflation rises. At the end of the third quarter of 2021, 46 hedge funds in the database of Insider Monkey held stakes worth $4.6 billion in The Bank of New York Mellon Corporation (NYSE:BK).
4. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 39
Gain in 2021: 40%
The Kroger Co. (NYSE:KR) is a food and drug retailer. The stock is a relatively new addition to the Berkshire Hathaway portfolio, considering the long-term investment strategy of Buffett. The fund first bought a stake in The Kroger Co. (NYSE:KR) in late 2019 worth close to 19 million shares at an average price of $26.5 per share. Since then, the fund has handsomely added to that position. At the end of September 2021, this holding represented 0.85% of the Berkshire portfolio and was worth close to $2.5 billion.
There is lots of hedge fund interest in The Kroger Co. (NYSE:KR) as well. At the end of the third quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $3.9 billion in The Kroger Co. (NYSE:KR), the same as in the preceding quarter worth $3.5 billion.
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 72
Gain in 2021: 48%
Bank of America Corporation (NYSE:BAC) is perhaps one of the best investments of Warren Buffett. The legendary investor first bought a stake in the bank in the third quarter of 2017 and has since added to it significantly. The holding has grown in value to around $42 billion and represents over 14% of the Berkshire Portfolio. It is the second largest holding in the portfolio behind tech giant Apple and ahead of American Express.
Bank of America Corporation (NYSE:BAC) is one of the largest banks in the US and naturally attracts lots of hedge fund interest. At the end of the third quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $46.4 billion in Bank of America Corporation (NYSE:BAC), compared to 87 in the previous quarter worth $46.5 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation (NYSE:BAC) was one of them. Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
2. Marsh & McLennan Companies, Inc. (NYSE:MMC)
Number of Hedge Fund Holders: 42
Gain in 2021: 53%
Marsh & McLennan Companies, Inc. (NYSE:MMC) operates as a professional services firm. It is the leader in the industry with a market cap of over $81 billion. At the end of the third quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Marsh & McLennan Companies, Inc. (NYSE:MMC), up from 41 in the preceding quarter worth $2.5 billion.
The strong performance of Marsh & McLennan Companies, Inc. (NYSE:MMC) this year would suggest that it is perhaps the most underrated holding in the Berkshire Hathaway portfolio. Buffett first bought a stake in Marsh & McLennan Companies, Inc. (NYSE:MMC) in the third quarter of 2020, just before the reopening of the economy after the pandemic. He then added to that significantly in the next two quarters before trimming it by close to half in the last few months of 2021. The holding is now worth $415 million.
1. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 88
Gain in 2021: 62%
Wells Fargo & Company (NYSE:WFC) was once one of the largest holdings in the Berkshire Hathaway portfolio. Buffett has, over the past few months, steadily reduced the holding, selling off as much as 90% of it in 2020. At the end of September, Berkshire Hathaway held less than a million shares in Wells Fargo & Company (NYSE:WFC). At the peak of his bull calls on the bank, Buffett had held close to $479 million shares of Wells Fargo & Company (NYSE:WFC).
Hedge funds are largely bullish on Wells Fargo & Company (NYSE:WFC) as a new year begins. At the end of the third quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $6 billion in Wells Fargo & Company (NYSE:WFC).
In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the fund said:
“Detractors to performance relative to the index include financial services holdings such as Wells Fargo. While banks in general have suffered due to the recession and experienced credit losses, Wells Fargo also suffered from operational missteps. It is our expectation, however, that our bank holdings in general will benefit from stronger economic growth as the pandemic recedes; and we believe Wells Fargo in particular, will, over time, lower their costs and successfully grow their businesses.”
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