15 Stocks Warren Buffett Is Investing a Ton of Money In
The Warren Buffett stock portfolio might provide clues about where to invest next.
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Warren Buffett — perhaps the greatest investor of his or any other generation — is known for buying stocks and holding them for long periods of time through his firm, Berkshire Hathaway. Yet, it was recently announced that he has sold nearly all of his shares of Walmart. And last year, he exited his investment in AT&T.
It was also recently announced that Buffett increased his shares of Apple and invested heavily in several airline stocks, including a new investment in Southwest Airlines. Previously, he largely shunned the airline industry.
Here’s a look at some stocks where Buffett has increased his investment in recent years, as well as a recap of some of the larger Berkshire Hathaway holdings. Looking over the list might help you decide where to invest in stocks during 2017.
1. Apple
Berkshire Hathaway added to its Apple stake significantly in 2016. In the fourth quarter alone, it nearly quadrupled its shares of Apple.
Apple continues to grow, and its products remain popular. The stock price is near its all-time high, buoyed in part by the company buying back shares of the stock, and by a steady dividend.
Many mutual funds hold Apple stock. The company is setting records for unit sales of the iPhone. Although Apple continues as a leader in the tech space, a caution surrounds the continued pace of price appreciation, with the stock up more than 18 percent so far in 2017.
2. Delta Air Lines
In mid-February, Berkshire Hathaway reported that it had amassed more shares of Delta Air Lines as part of a move to increase holdings in the airline industry. Berkshire Hathaway’s investment in Delta was worth about $3 billion at the end of 2016.
Delta had reported average annual earnings growth of more than 21 percent for the previous five years and a dividend yield of 1.47 percent, according to Morningstar.
3. United Continental Holdings
Berkshire Hathaway reported holdings of about $2.1 billion of United Continental stock at the end of 2016. One of Buffett’s best performing stocks of 2016, United Continental had reported average annual earnings growth of 13 percent for the previous five years. Over the past 12 months, the stock has traded in the range of $37.41 to $76.80 per share, with a recent close of $75.41.
4. American Airlines
Berkshire Hathaway reported holdings of about $2.1 billion of American Airlines stock at the end of 2016.
Like other carriers, American Airlines is constantly trying to innovate to gain an edge in a competitive industry. Recently, it unveiled Basic Economy fares in a handful of markets.
5. Southwest Airlines
As part of an increase in airline holdings, Berkshire Hathaway reported a fourth-quarter 2016 purchase of $2 billion of stock in Southwest, a new position for Buffett.
The stock posted a total return of 42.44 percent over the 12 months ending Feb. 24. That beat the Standard & Poor’s 500 index (25.36 percent) and the average stock in Morningstar’s airline group (24.53 percent).
6. Monsanto
Berkshire Hathaway reported the purchase of about 8 million shares — worth more than $800 million — of Monsanto, a sustainable agriculture company. The stock posted a total return of 29.98 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent).
7. Sirius XM
Berkshire Hathaway reported a $790 million purchase of shares of Sirius XM, a new position for Buffett in 2016.
The stock posted a total return of 42.78 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) but slightly below the average stock in Morningstar’s broadcasting-radio group (41.34 percent). The company has a history of exceeding its earnings guidance.
8. International Business Machines
IBM is one of the largest investments in the Berkshire Hathaway portfolio, worth almost $15 billion as of the end of 2016.
The stock posted a total return of 40.78 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) and above the average stock in Morningstar’s information technology services group (27.58 percent).
In fact, IBM might be a great stock for you to consider purchasing — especially if you’re new to investing.
9. Phillips 66
Berkshire’s stake in Phillips 66 was about $6.3 billion as of the end of 2016. The stock posted a total return of 1.85 percent over the 12 months ending Feb. 24, trailing the S&P 500 index (25.36 percent) and below the average stock in Morningstar’s information oil and gas refining and marketing group (14.38 percent).
Before you invest in Phillips 66, make sure you learn how to invest in oil stocks.
10. Kraft Heinz
Kraft Heinz is Berkshire Hathaway’s largest holding, worth nearly $30 billion as of the end of 2016. The stock posted a total return of 30.74 percent over the 12 months ending Feb. 24, trailing the S&P 500 index (25.36 percent) and above the average stock in Morningstar’s information packaged goods group (16.76 percent).
11. MasterCard
Berkshire Hathaway’s stake in MasterCard was more than $545 million at the end of 2016.
The stock posted a total return of 29.36 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) but trailing the average stock in Morningstar’s credit services group (30.33 percent).
Morningstar analysts feel the company has solidified its competitive position. They cite the company’s network of global banks, merchants and cardholders as huge advantages.
12. Coca-Cola
Berkshire Hathaway’s stake in Coca-Cola was more than $16.7 billion at the end of 2016. The stock posted a total loss of 1.66 percent over the 12 months ending Feb. 24, trailing the S&P 500 index (25.36 percent) and the average stock in Morningstar’s beverages-soft drinks group (3.22 percent).
Morningstar analysts are optimistic about the company, citing its position as the leader in its segment as a factor in its ability to maintain a premium price. Morningstar also likes the opportunities for growth in emerging-market countries.
13. Wells Fargo
Wells Fargo is a longtime Berkshire Hathaway holding that Buffett added to in 2015. Even in the wake of the fake account opening scandal last year, he has not liquidated any shares.
Even with the scandal and its fallout, the stock’s total return over the 12 months ending Feb. 24 was 24.62 percent, only slightly below that of the S&P 500 index at 25.36 percent. The total return was about half that of the average stock in Morningstar’s bank group, however.
According to the latest Morningstar analysis, “Wells Fargo’s January business update confirmed our thesis that the impact of widespread sales fraud will be relatively short lived. Consumer checking account openings exceeded closings, deposit balances grew at a healthy rate during the ear, and reported customer satisfaction metrics are closing in on pre-scandal levels.”
14. Bank of New York Mellon
Berkshire Hathaway’s position in Bank of New York Mellon was worth just over $1 billion at the end of 2016.
The stock posted a total return of 37.56 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) and the average stock in Morningstar’s asset management group (34.25 percent).
Morningstar cites the “stickiness” of the firm’s asset custody business and the leverage inherent in the firm’s operations as reasons for optimism about the stock in the coming months.
15. General Motors
Berkshire Hathaway’s stake in General Motors was worth around $1.8 billion at the end of 2016.
The stock posted a total return of 33.22 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) and the average stock in Morningstar’s auto manufacturers group (20.96 percent).
Morningstar analysts feel General Motors has tremendous earnings potential now that it can focus its U.S. marketing efforts on just four car brands instead of eight.
Up Next: How to Make Your First Million the Warren Buffett Way
About the Author
Roger Wohlner
Roger is an experienced financial writer and financial advisor who uses his experience to explain complex financial topics in an easy to understand format. Roger contributes to his own popular finance blog, The Chicago Financial Planner where he writes about issues concerning financial planning, investments and retirement plans. His work has been featured on Investopedia, US News & World Report, Yahoo! Finance, Equifax Finance Blog and other sites.
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Warren Buffett — perhaps the greatest investor of his or any other generation — is known for buying stocks and holding them for long periods of time through his firm, Berkshire Hathaway. Yet, it was recently announced that he has sold nearly all of his shares of Walmart. And last year, he exited his investment in AT&T.
It was also recently announced that Buffett increased his shares of Apple and invested heavily in several airline stocks, including a new investment in Southwest Airlines. Previously, he largely shunned the airline industry.
Here’s a look at some stocks where Buffett has increased his investment in recent years, as well as a recap of some of the larger Berkshire Hathaway holdings. Looking over the list might help you decide where to invest in stocks during 2017.
1. Apple
Berkshire Hathaway added to its Apple stake significantly in 2016. In the fourth quarter alone, it nearly quadrupled its shares of Apple.
Apple continues to grow, and its products remain popular. The stock price is near its all-time high, buoyed in part by the company buying back shares of the stock, and by a steady dividend.
Many mutual funds hold Apple stock. The company is setting records for unit sales of the iPhone. Although Apple continues as a leader in the tech space, a caution surrounds the continued pace of price appreciation, with the stock up more than 18 percent so far in 2017.
2. Delta Air Lines
In mid-February, Berkshire Hathaway reported that it had amassed more shares of Delta Air Lines as part of a move to increase holdings in the airline industry. Berkshire Hathaway’s investment in Delta was worth about $3 billion at the end of 2016.
Delta had reported average annual earnings growth of more than 21 percent for the previous five years and a dividend yield of 1.47 percent, according to Morningstar.
3. United Continental Holdings
Berkshire Hathaway reported holdings of about $2.1 billion of United Continental stock at the end of 2016. One of Buffett’s best performing stocks of 2016, United Continental had reported average annual earnings growth of 13 percent for the previous five years. Over the past 12 months, the stock has traded in the range of $37.41 to $76.80 per share, with a recent close of $75.41.
4. American Airlines
Berkshire Hathaway reported holdings of about $2.1 billion of American Airlines stock at the end of 2016.
Like other carriers, American Airlines is constantly trying to innovate to gain an edge in a competitive industry. Recently, it unveiled Basic Economy fares in a handful of markets.
5. Southwest Airlines
As part of an increase in airline holdings, Berkshire Hathaway reported a fourth-quarter 2016 purchase of $2 billion of stock in Southwest, a new position for Buffett.
The stock posted a total return of 42.44 percent over the 12 months ending Feb. 24. That beat the Standard & Poor’s 500 index (25.36 percent) and the average stock in Morningstar’s airline group (24.53 percent).
6. Monsanto
Berkshire Hathaway reported the purchase of about 8 million shares — worth more than $800 million — of Monsanto, a sustainable agriculture company. The stock posted a total return of 29.98 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent).
7. Sirius XM
Berkshire Hathaway reported a $790 million purchase of shares of Sirius XM, a new position for Buffett in 2016.
The stock posted a total return of 42.78 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) but slightly below the average stock in Morningstar’s broadcasting-radio group (41.34 percent). The company has a history of exceeding its earnings guidance.
8. International Business Machines
IBM is one of the largest investments in the Berkshire Hathaway portfolio, worth almost $15 billion as of the end of 2016.
The stock posted a total return of 40.78 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) and above the average stock in Morningstar’s information technology services group (27.58 percent).
In fact, IBM might be a great stock for you to consider purchasing — especially if you’re new to investing.
9. Phillips 66
Berkshire’s stake in Phillips 66 was about $6.3 billion as of the end of 2016. The stock posted a total return of 1.85 percent over the 12 months ending Feb. 24, trailing the S&P 500 index (25.36 percent) and below the average stock in Morningstar’s information oil and gas refining and marketing group (14.38 percent).
Before you invest in Phillips 66, make sure you learn how to invest in oil stocks.
10. Kraft Heinz
Kraft Heinz is Berkshire Hathaway’s largest holding, worth nearly $30 billion as of the end of 2016. The stock posted a total return of 30.74 percent over the 12 months ending Feb. 24, trailing the S&P 500 index (25.36 percent) and above the average stock in Morningstar’s information packaged goods group (16.76 percent).
11. MasterCard
Berkshire Hathaway’s stake in MasterCard was more than $545 million at the end of 2016.
The stock posted a total return of 29.36 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) but trailing the average stock in Morningstar’s credit services group (30.33 percent).
Morningstar analysts feel the company has solidified its competitive position. They cite the company’s network of global banks, merchants and cardholders as huge advantages.
12. Coca-Cola
Berkshire Hathaway’s stake in Coca-Cola was more than $16.7 billion at the end of 2016. The stock posted a total loss of 1.66 percent over the 12 months ending Feb. 24, trailing the S&P 500 index (25.36 percent) and the average stock in Morningstar’s beverages-soft drinks group (3.22 percent).
Morningstar analysts are optimistic about the company, citing its position as the leader in its segment as a factor in its ability to maintain a premium price. Morningstar also likes the opportunities for growth in emerging-market countries.
13. Wells Fargo
Wells Fargo is a longtime Berkshire Hathaway holding that Buffett added to in 2015. Even in the wake of the fake account opening scandal last year, he has not liquidated any shares.
Even with the scandal and its fallout, the stock’s total return over the 12 months ending Feb. 24 was 24.62 percent, only slightly below that of the S&P 500 index at 25.36 percent. The total return was about half that of the average stock in Morningstar’s bank group, however.
According to the latest Morningstar analysis, “Wells Fargo’s January business update confirmed our thesis that the impact of widespread sales fraud will be relatively short lived. Consumer checking account openings exceeded closings, deposit balances grew at a healthy rate during the ear, and reported customer satisfaction metrics are closing in on pre-scandal levels.”
14. Bank of New York Mellon
Berkshire Hathaway’s position in Bank of New York Mellon was worth just over $1 billion at the end of 2016.
The stock posted a total return of 37.56 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) and the average stock in Morningstar’s asset management group (34.25 percent).
Morningstar cites the “stickiness” of the firm’s asset custody business and the leverage inherent in the firm’s operations as reasons for optimism about the stock in the coming months.
15. General Motors
Berkshire Hathaway’s stake in General Motors was worth around $1.8 billion at the end of 2016.
The stock posted a total return of 33.22 percent over the 12 months ending Feb. 24, beating the S&P 500 index (25.36 percent) and the average stock in Morningstar’s auto manufacturers group (20.96 percent).
Morningstar analysts feel General Motors has tremendous earnings potential now that it can focus its U.S. marketing efforts on just four car brands instead of eight.
Up Next: How to Make Your First Million the Warren Buffett Way
About the Author
Roger Wohlner
Roger is an experienced financial writer and financial advisor who uses his experience to explain complex financial topics in an easy to understand format. Roger contributes to his own popular finance blog, The Chicago Financial Planner where he writes about issues concerning financial planning, investments and retirement plans. His work has been featured on Investopedia, US News & World Report, Yahoo! Finance, Equifax Finance Blog and other sites.
