Latest news with #BRK
Globe and Mail
2 days ago
- Business
- Globe and Mail
Warren Buffett Doubled His Position in These 2 Stocks Last Quarter. Should You Invest in Them?
Warren Buffett's company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) recently filed its latest 13F report, showing which stocks it has a position in. And by analyzing the filing, investors can see which stocks the company has been buying and selling. Berkshire hasn't been doing too much buying lately but there are a couple of stocks which it has dramatically increased its position in: Constellation Brands (NYSE: STZ) and Pool Corp (NASDAQ: POOL). Berkshire's share count in both of these stocks has more than doubled in just the past quarter. Are these stocks you should consider for your portfolio as well? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Constellation Brands Berkshire increased its position in beer maker Constellation Brands by 114% this past quarter, and it now owns more than 12 million shares. However, that's still modest in relation to Berkshire's overall portfolio as Constellation accounts for less than 1% of its total holdings. Why would Berkshire be bullish on Constellation Brands right now? What Buffett may like is that it has some strong, identifiable consumer brands in Corona and Modelo, which gives the company a competitive advantage over its peers. The company has also been steadily growing its revenue over the years and its operating income has also been strong. In the trailing 12 months, Constellation's operating income totaled $3.4 billion on revenue of $10.2 billion, for an impressive margin of 33%. What may have enticed Berkshire to add to the position was that in mid-February, the stock hit a new 52-week low, and bargain investor that Buffett is, decided to load up on the stock at the time. Constellation Brands may look appealing but there are risks to consider as well. The company makes its beers in Mexico and tariffs pose a risk for the foreseeable future. And there are also rising health concerns around alcohol as it has been linked to an increased risk of developing several types of cancers, which could impact demand in the long run as consumers become more health conscious. For those reasons, I wouldn't go out and buy the stock. But if you want a cheap dividend stock, Constellation could make for a compelling option as it pays 2.2%, which is better than the S&P 500 average of 1.3%. Pool Corp The stock that jumped the most (in terms of percentage points) in Berkshire's portfolio this past quarter was Pool Corp. Berkshire's position in that stock increased by 145%, but at around 1.5 million shares, it's a much smaller position overall for the company than Constellation. Pool Corp makes up just 0.2% of Berkshire's entire portfolio. As its name suggests, Pool Corp is in the business of pools; it refers to itself as "the world's leading wholesale distributor of swimming pool equipment, parts and supplies, and related outdoor living products." The company has a strong global presence with sales centers in North America, Europe, and Australia. Pool Corp's numbers are good but not as impressive as Constellation's. For one thing, the company's sales declined for the past two years, from $6.2 billion in 2022 to $5.5 billion the following year, and falling to $5.3 billion this past year. It is profitable, but its operating income of $617 million in 2024 was a more modest 12% of its top line. That's a decent margin, but it doesn't look terribly exciting. As with Constellation Brands, Pool Corp stock has also been falling in recent months, and that may have incentivized Buffett to add the stock to Berkshire's holdings. Overall, it's a simple business to understand, it makes decent profits, and it pays a dividend of 1.7%. It's a no-nonsense stock that fits well with other consumer stocks that Berkshire has in its portfolio. But here again, I'd pass on the stock simply because its numbers aren't all that compelling, and a time when consumers are scaling back on discretionary purchases, there may not be growing demand for swimming pools anytime soon. Should you invest $1,000 in Constellation Brands right now? Before you buy stock in Constellation Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Constellation Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to170%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Globe and Mail
2 days ago
- Business
- Globe and Mail
Is Berkshire Hathaway Stock a Buy Now?
It has been a few weeks since Warren Buffett shocked Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) investors by announcing his intention to step down as CEO at the end of 2025 after more than 60 years at the helm of the massive conglomerate. Berkshire's stock reacted negatively after the announcement and remains about 7% below where it was before the company's annual meeting, where the news was revealed. And it's worth noting that this is during a period when the S&P 500 gained about 2%. Obviously, the leadership of the legendary billionaire investor is a big reason many people own the stock. However, the company's succession plan has been in place for a long time, and in the foreseeable future, not much is really changing even though Warren Buffett is stepping down. So here's a summary of why I'm not planning to sell a single share of Berkshire, and why investors may want to consider adding after the post-Buffett dip. A diverse and recession-resistant portfolio, all in one stock Berkshire Hathaway owns more than 60 subsidiary business, according to its website, and it's important for investors to realize that all of its businesses have their own leadership teams that largely operate independently of Berkshire's central office. In other words, Buffett has virtually nothing to do with the day-to-day operations of GEICO, Dairy Queen, Duracell, or any of Berkshire's other businesses. Ajit Jain has been in charge of insurance operations, and Greg Abel, the incoming CEO, has already been in charge of non-insurance operations, so there really isn't that much changing with Buffett's departure. Most of Berkshire's businesses are rather recession resistant. For example, GEICO will keep collecting auto insurance premiums and Berkshire Hathaway Energy will receive payment for its utility services, even in an economic downturn. In addition to its businesses, Berkshire has a large portfolio of common stocks, as well as about $348 billion in cash on its balance sheet. The stock portfolio is managed by Buffett along with two portfolio managers, Todd Combs and Ted Weschler, and while Abel will have the final say on capital allocation, it's likely that the two managers will play a somewhat larger role in the stock portfolio. They've both established solid track records of stock-picking so far, and this could ultimately be a net positive for investors, as both have a somewhat more modern (that is, tech-centric) stock approach. Finally, Berkshire's cash gives management unprecedented financial flexibility to take advantage of opportunities as they arise. However, with interest rates still relatively high and the cash stockpile earning well in excess of $10 billion in annual interest income for Berkshire, Abel and his team aren't likely to be in a big rush to put it to work. But if a recession or market crash arrives, no company will have as much financial firepower as Berkshire. It's cheaper than you might think At the current share price, Berkshire has a market cap of $1.085 trillion, making it the only non-technology company in the trillion-dollar club. But just because it has a 13-figure valuation doesn't necessarily mean it's an expensive stock. Here's why. Two of the three components of Berkshire are very easy to value. It has about $348 billion in cash, and the current market value of the stock portfolio is just under $277 billion as of this writing, not including an undisclosed "secret stock" position Berkshire is accumulating. Backing these two numbers out of the valuation shows that the market is valuing Berkshire's operating businesses at $460 billion. Over the past four quarters, the company has produced about $33 billion in operating profit, excluding investment income, which mainly comes from interest on its cash. So that means Berkshire trades for less than 14 times earnings, at least in terms of its fully owned businesses. Plus, there's a big case to be made that Berkshire could unlock significant profitability from its massive insurance business by improving its technology. The bottom line I've said before that if I could only own one stock, it would be Berkshire. And although I own far more than just one stock, Berkshire is one of my largest investments and I have no plans to change that. I'd even go so far as to say that it's never a bad time to buy shares of Berkshire. It holds up better than most other stocks during most downturns and has a solid history of coming out even stronger on the other side. The bottom line is that Berkshire offers a diverse collection of rock-solid businesses all in one investment, and it has unmatched financial flexibility. With all the right pieces in place for continued success, Berkshire Hathaway could be a smart buy on any weakness. Should you invest $1,000 in Berkshire Hathaway right now? Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor 's total average return is982% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Globe and Mail
18-05-2025
- Business
- Globe and Mail
Warren Buffett Nearly Made His Biggest Investment Since 2022. Here's What's Holding Him Back.
Warren Buffett has overseen the investment portfolio at Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) for 60 years. In that time, he's produced mind-boggling returns for shareholders. Since Buffett took over the company in 1965, Berkshire shares have returned an average of 20% per year. Over the course of 60 years, that adds up to a whopping 6,135,058%. Even if you had waited until the end of the trading session when Berkshire announced Buffett's takeover and bought a single $18 share, it'd be worth over $750,000 as of this writing. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » That's why the investing world pays close attention to the moves Buffett and his team of investment managers make in Berkshire's portfolio. Unfortunately, the Oracle of Omaha has been selling much more than he's bought over the last two and a half years. The last big investment he made was in Alleghany Corp. in 2022, which Berkshire acquired for a value of $11.6 billion. At the company's annual shareholder meeting earlier this month, Buffett said he and the team came pretty close to spending $10 billion recently, which would have been Berkshire's biggest acquisition since Alleghany. But one thing held him back and continues to hold him back from making any big investments right now. The only two things Buffett looks for in an investment Buffett contends that investment decisions aren't as complicated as some experts might lead you to believe. In fact, he says a decisions can be downright easy as long as there are two things in place. "We'd spend $100 billion," Buffett told the audience after revealing Berkshire came close to a $10 billion deal. "Those decisions are not tough to make when something is offered that makes sense to us and that we understand and offers good value." If the business is understandable and offered at good value, Buffett will buy it. Perhaps in more recent years, there should be a caveat that Buffett probably isn't looking at deals unless they're in the $10 billion range or bigger. Buffett later commented, "$10 billion wouldn't have done that much," referencing Berkshire's approximately $630 billion in liquid assets between its cash and equity portfolio. But Buffett's simple investing philosophy has led to unparalleled long-term success, and it's not like the 94-year-old has completely lost touch with how businesses work. The explanation for why it's been so tough for Buffett to invest a lot of money recently is that there's not a lot of value in the market, especially among bigger companies. A very opportunistic business To run a business like Buffett runs Berkshire Hathaway requires being very opportunistic. Buffett and his team have to spot an opportunity and be prepared to take advantage of it when it arises. A good opportunity rarely lasts very long. "Occasionally, very occasionally, I don't know when it will happen, it could be next week, it could be five years off, but it won't be 50 years off, we will be bombarded with offerings that we'll be glad we have the cash for," Buffett said at the meeting. All this is to say that if you want to outperform a benchmark index like the S&P 500, you have to wait for the right opportunities. That said, Buffett says there's nothing wrong if an investor wants to buy an index fund and keep all of their money passively invested. In fact, that's what he's instructed the executor of his estate to do. But for investors looking for an opportunity to buy individual stocks, the opportunities are few and far between. The S&P 500 trades for a very high valuation relative to its historic average. Its forward P/E ratio of 20.4 sits well above the mid-teen level investors are used to seeing. The CAPE ratio, which looks at the last 10 years of inflation-adjusted earnings, has climbed above 35, while it typically sits around 20. But average investors have a big advantage over Buffett -- they can go small. Smaller companies aren't nearly as expensive as the biggest stocks in the market right now. Buffett would agree, as the purchases he has made over the last two and a half years have all been near the bottom end of any company Berkshire could consider to move the needle. The small-cap S&P 600 and mid-cap S&P 400 both trade closer to the 15 times forward P/E investors are used to, so it's worth looking for opportunities among these sectors. Should you invest $1,000 in Berkshire Hathaway right now? Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor 's total average return is975% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 12, 2025
Forbes
16-05-2025
- Business
- Forbes
Berkshire Hathaway's First Quarter 2025 Portfolio Moves
Warren Buffett's Berkshire Hathaway added one new stock to its portfolio and added to a few more ... More recent new purchases. On the other hand, he continued to reduce his bank holdings. (Photo by: David A. Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images) You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long, dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing. – Warren Buffett in 'Supermoney' (1972) Berkshire Hathaway's (BRK/A, BRK/B) fourth-quarter 13F was filed after the market closed on May 15. This regulatory filing gives us a quarterly opportunity to observe what Warren Buffett and his investment team of Todd Combs and Ted Weschler are doing within Berkshire's publicly traded equity portfolio. Berkshire has a large stable of wholly-owned entities, but this report provides us with the details of the U.S. publicly traded stock portion of their investments. Berkshire's first-quarter earnings report, which contains information about the extensive portfolio of wholly-owned operating companies, was released on Saturday, May 3. The annual meeting was held on the same day, with further discussion about Berkshire Hathaway's operations and the momentous announcement of Buffett's retirement as CEO at the end of the year. Berkshire's $258.7 billion investment portfolio consists of 36 companies, down two from last quarter. Berkshire was a net seller of publicly traded stocks during the quarter. The top five holdings, in order of the size of holding, are Apple (AAPL), American Express (AXP), Coca-Cola (KO), Bank of America (BAC), and Chevron (CVX). The top 5 holdings account for almost 71% of the total portfolio, down from 76% in the first quarter of 2024. The investment portfolio remains very concentrated, with 89% of assets in the top ten holdings. Percent Of Berkshire Hathaway 13F Portfolio - 1Q 2025 Before the 2024 sales, Apple stock comprised over 50% of its publicly traded portfolio, but it remains the most significant holding at around 26%. The Berkshire portfolio was overweight technology due to its massive Apple stake, but the selling in 2024 has taken technology to a slight underweight. Berkshire Hathaway had no change in the Apple (AAPL) position for the first quarter. Despite the elimination of Citigroup (C) and Nu Holdings (NU) and the trimming of Bank of America (BAC) and Capital One Financial (COF), the financial sector is the most significant overweight in the portfolio at almost 40% of assets. Due to its top five holdings, plus Occidental Petroleum (OXY) and Kraft Heinz (KHC), the portfolio remains considerably overweight in consumer staples and energy relative to the S&P 500. Berkshire controls almost 27% of the outstanding shares in Occidental, which, combined with Chevron, leads to a significant energy sector overweight. A deeper analysis of the probable reasons behind the Occidental purchase can be found here. Berkshire has only one small holding in the industrial sector and no real estate companies or utilities. However, Berkshire's wholly-owned entities include a large railroad, Burlington Northern Santa Fe (BNSF), and multiple regulated utilities and pipelines via Berkshire Hathaway Energy (BHE). Berkshire Hathaway 13F Portfolio By Sector Because the 13F does not include international stocks, Berkshire Hathaway initially announced the acquisition of about 5% of five Japanese trading companies at the end of August 2020. These holdings are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd., and Sumitomo Corp. According to regulatory filings in March 2025, Berkshire now has 8.5% to 9.8% ownership in these trading companies. In Buffett's 2024 annual letter, he noted that all five companies had agreed to relax the previously agreed-upon 10% ownership ceiling. At the recent annual meeting, Buffett said he 'won't give a thought' to selling them and expects Berkshire to own them for fifty years or more. Berkshire added a new secret holding. It requested and received confidential treatment for 'one or more holding(s)' from the Securities and Exchange Commission (SEC). Typically, this means Buffett or another investment professional is attempting to continue to add to the holding, and disclosure would likely drive the price higher. It is likely one new stock since the value is estimated at $1 to $2 billion when comparing the 13F filing with earlier first-quarter earnings disclosures via the 10Q filing. Berkshire added to its positions in Constellation Brands (STZ), Domino's Pizza (DPZ), Pool Corporation (POOL), Occidental Petroleum (OXY), Verisign (VRSN), Sirius XM Holdings (SIRI), and Heico-A (HEI/A). Within financials, Berkshire jettisoned its Citigroup (C) and NU Holdings (NU) positions, while continuing to trim its Capital One Financial (COF) and Bank of America (BAC) shares. Warren Buffett is regarded as one of the greatest bank stock investors ever. Hence, the continued reduction in exposure to the banking sector is notable, but almost 40% of the stock portfolio remains in financial companies. Berkshire also reduced its positions in T-Mobile (TMUS), Charter Communications (CHTR), Liberty Media—Formula One (FWONK), and Davita (DVA). Notably, the Davita sales were related to a 2024 agreement in which Davita will buy back shares quarterly from Berkshire when its stake rises above 45%. This analysis looks at the Berkshire portfolio across a host of measures, including 12-month forward estimated: price-to-earnings (P/E), price-to-sales (P/S), return-on-equity (ROE), enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), price-to-book (P/B), dividend yield, current debt-to-EBITDA, current free cash flow yield, current operating margin, and long-term earnings-per-share growth consensus estimates. Berkshire Hathaway 13F Portfolio - Valuation Measures Overall, the Berkshire portfolio analysis reflects a cheaper price-to-earnings valuation than the S&P 500 while having superior returns on capital as measured by return on equity with similar debt levels. The long-term (next 3 to 5 years) consensus earnings-per-share growth rate is expected to be lower than the S&P 500. Buffett's preference for high-quality companies that generate significant cash flows is evident from the superior return on equity combined with an exceptional free cash flow yield. Berkshire Hathaway: Cash Berkshire was a net seller of stocks in its portfolio for the tenth quarter in a row, with relatively modest net sales of $1.5 billion in publicly traded stocks. Driven by earnings and continued stock sales, Berkshire has amassed a record cash level on an absolute basis and relative to the company's size. Buffett and company have been unable to find enough attractive acquisition targets in his circle of competence and at a valuation he is willing to pay. At the annual meeting, Buffett said that Berkshire 'holds a lot more cash and Treasury bills than I would like.' He always looks for investments, but 'things don't come along in an orderly fashion.'
Yahoo
15-05-2025
- Business
- Yahoo
Buffett Tells WSJ ‘Great Talent Is Rare,' as Berkshire CEO Talks Up Successor Abel's Skills
Legendary investor Warren Buffett's leadership of Berkshire Hathaway (BRK.A, BRK.B), the struggling textile company he made into a trillion dollar conglomerate, will be a tough act to follow. But the 'Oracle of Omaha' said his successor Greg Abel is ready for the challenge. 'He was already ready. I haven't taught him anything,' Buffett told the Wall Street Journal in an interview in which he called Abel a "natural" and praised the vice chair's skills, according to reports Wednesday. While Buffett lauded Abel's energy and business acumen in his role overseeing Berkshire's noninsurance subsidiaries, he also said Abel is a successful investor, who "will have ideas about where money should be invested," amid speculation about how Berkshire's record $347.7 billion cash pile could be deployed. 'Really great talent is rare,' Buffett reportedly said. 'It's rare in business. It's rare in capital allocation. It's rare in almost every human activity you can name," he said, adding that 'the more years that Berkshire gets out of Greg, the better.' Earlier this month, Buffett stunned attendees at Berkshire's annual shareholder meeting—including Abel, who was sitting beside Buffett on stage—when the CEO of 60 years announced Abel would assume the role at year-end. But it was a decision that many Berkshire investors anticipated would come soon, after the 94-year-old Buffett warned in February that "it won't be long before Greg Abel replaces me as CEO." The 62-year-old Abel has been with the company for 25 years, and has a strong track record leading the company's energy and railroad businesses. "I think the prospects of Berkshire will be better under Greg's management than mine," Buffett told investors at the event, adding that he has no plans of selling his shares. Buffett will remain chair of Berkshire's board after he steps down as CEO. Shares of Berkshire have taken a hit in the wake of the announcement, though they've still outperformed the broader market, with shares up about 11% since the start of the year, while the S&P 500 barely edged back into positive territory yesterday. "We believe Abel is a great operator and has already helped improve some of BRK's businesses," UBS analysts told clients in a note last week, adding they "expect little change at BRK and the culture/strategy to remain unchanged under Abel." Abel has said he aims to continue the investment philosophy and values that have guided Berkshire under Buffett, telling investors at the annual shareholder meeting, 'it will not change, and it's the approach we'll take as we go forward.' Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
