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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.'
Reuters
15-05-2025
- Business
- Reuters
Berkshire doubles Constellation stake, sheds Citigroup
May 15 (Reuters) - Warren Buffett's Berkshire Hathaway (BRKa.N), opens new tab said on Thursday it more than doubled its stake in alcoholic beverages producer Constellation Brands (STZ.N), opens new tab, while selling its holdings in Citigroup (C.N), opens new tab and Brazilian fintech lender Nu Holdings (NU.N), opens new tab. Berkshire disclosed the trades in a regulatory filing detailing its U.S.-listed stock holdings as of March 31. It said its Constellation stake grew to about 12 million shares from 5.6 million at year end, giving it a 6.6% stake in the maker of Corona and Modelo Especial beer, and Meiomi, Robert Mondavi and Kim Crawford wines. Berkshire's quarterly disclosures of its stock portfolio do not say whether Buffett, his portfolio managers Todd Combs and Ted Weschler, or future chief executive Greg Abel are behind individual sales and purchases.
Irish Times
11-05-2025
- Business
- Irish Times
Warren Buffett, stock-picker extraordinaire? Not quite
As Berkshire Hathaway's Warren Buffett prepares to retire, most tributes focus on his reputation as the world's greatest stock-picker. (Disclosure: I own shares in Berkshire.) However, the truth is more nuanced. Buffett made many brilliant investments, but it wasn't all plain sailing. The last decade saw some expensive missteps, like Kraft Heinz, Precision Castparts, and a $4 billion loss on airline stocks. One pick – Apple – made all the difference. Without that position (largely credited to Berkshire's Todd Combs), the Market Sentiment blog notes that Berkshire would have 'significantly lagged' the S&P 500 over the past 10-year and 20-year periods. READ MORE It's hard to isolate the performance of Buffett's stock picks, but in 2018 Discipline Funds founder Cullen Roche estimated that they lagged the S&P 500 by about 2 per cent annually over the prior decade, suggesting Berkshire's private businesses did much of the heavy lifting. Buffett's real edge was access to stable, long-term capital. Thanks to the steady float from Berkshire's insurance businesses – premiums collected up front and paid out later – he could invest with low-cost, low-risk leverage. A widely cited paper by AQR Capital Management found his performance largely reflected exposure to high-quality, low-risk, value stocks, amplified by leverage (around 1.6:1) and disciplined execution over decades. Buffett often urged ordinary investors to stick with index funds. That was good advice. His success wasn't just about picking stocks: it was about building an investment vehicle few could ever hope to imitate.
Yahoo
10-05-2025
- Business
- Yahoo
Prediction: Owning Berkshire Hathaway Stock Will Not Be the Same After Warren Buffett Steps Down
Warren Buffett is stepping down as CEO of Berkshire at year-end. Greg Abel could mark a shift in the strategy of how Berkshire's cash is allocated. The stock is still trading near historic highs. 10 stocks we like better than Berkshire Hathaway › Berkshire Hathaway (NYSE: BRK.B) (NYSE: BRK.A) has been a tremendous investment since the stock went public back in 1980. During that span, the insurance-led conglomerate has had only one chief executive officer: Warren Buffett. Buffett would prove himself to be one of the greatest investors of all time during his tenure at Berkshire. However, Buffett shocked shareholders when he announced at the company's annual shareholder meeting that he would step down from the CEO role at the end of the year. Taking his place will be Greg Abel, his long-appointed successor and current head of Berkshire's energy division. Buffett will, however, stay on as a member of Berkshire's board. Unlike Buffett, Abel is not a renowned investor. Instead, his strength lies in his operating expertise and being a shrewd dealmaker. He made a string of acquisitions to help turn a sleepy Iowa utility into a major power production and pipeline company that is now called Berkshire Hathaway Energy. Meanwhile, he has been running Berkshire's non-insurance businesses since 2018. However, Abel will not be running Berkshire's huge investment portfolio. That job will fall to Todd Combs and Ted Weschler, whom Buffett brought on to help run that side of the business several years ago. Ajit Jain, meanwhile, will continue to run the day-to-day business of Berkshire's insurance operations. Buffett will leave his CEO role at Berkshire, leaving behind an unmatched legacy. He created a unique model for the insurance industry where he eschewed investing Berkshire's insurance float in safe, fixed-income investments, instead investing it in stocks. Float is the money that insurance companies collect in premiums and hold until a claim is paid out. This decision, combined with Buffett's investment acumen, has created an enormous amount of shareholder value over the years. Buffett has a long-term investment focus, and he would buy stakes in companies he believed were undervalued that have the ability to keep compounding for decades. One of his most famous investments is Coca-Cola, which Berkshire began buying in 1988 and still holds today. Buffett also leaves Abel and Berkshire Hathaway with a tremendous stockpile of cash. Buffett began selling stocks last year ahead of the market sell-off, while also ending the company's buyback program. Together with increased operating profits, Berkshire ended the first quarter with a whopping $347.7 billion in cash on its balance sheet. Despite the recent market volatility, Buffett also didn't seem eager to run out to buy stocks ahead of stepping down as CEO. He told investors that Berkshire will eventually find places to invest its cash, but that "it's very unlikely to happen tomorrow." However, he noted that it would likely find someplace to invest in the next five years. He has shrugged off the recent market downturn, saying it hasn't been a dramatic bear market. Unless a great investment comes along in the next eight months, it looks like Abel will have a large cash hoard when he steps in as CEO. How he allocates that money will be interesting, but it likely will be different than if Buffett were CEO. After all, Buffett is a stock picker, and Abel is an operator. Instead of investing in stocks, I would expect Abel to be on the lookout to buy entire businesses. I wouldn't be surprised if he sold some Berkshire businesses, as well. The conglomerate has nearly 200 disparate businesses, ranging from railroads to ice cream parlors. Buffett collected a lot of undervalued businesses with little to no synergies, while at MidAmerican Energy, Abel went out and made synergistic acquisitions that positioned the company to be one of the largest utility companies in the U.S. This strategy shift would not be a bad thing, but it would certainly be much different than how Berkshire was run in the past. Buffett is also leaving Berkshire with a pretty high stock valuation. The stock currently has a price-to-book (P/B) ratio of 1.7, which is one of the highest levels during the past decade. Buffett even stopped buying back Berkshire stock mid-year last year due to its high valuation. When Buffett is no longer CEO, there's also a good chance that the Buffett premium in the stock will start to wane. In the past, Buffett would only buy back stock when it traded at a P/B below 1.2 times, so if the stock were to return to about this level, it could have some meaningful downside from current levels. With Buffett appearing unlikely to use his cash stockpile anytime soon and a potential shift in its overall investment strategy (more toward buying operating businesses than stocks), my prediction is that this won't be the same Berkshire Hathaway stock in the years to come. Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $717,471!* Now, it's worth noting Stock Advisor's total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy. Prediction: Owning Berkshire Hathaway Stock Will Not Be the Same After Warren Buffett Steps Down was originally published by The Motley Fool 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
Yahoo
24-02-2025
- Business
- Yahoo
Berkshire Hathaway Reports $47.4 Billion in 2024 Operating Earnings
Berkshire Hathaway (BRK.A, Financials) reported $47.4 billion in operating earnings for 2024, a 27% increase from $37.4 billion in 2023, fueled by higher investment income and improved insurance performance. From $9.6 billion, investment income climbed to $13.7 billion as Treasury rates jumped. Thanks to GEICO's turnaround under CEO Todd Combs, insurance underwriting revenue jumped from $5.4 billion to $9 billion. With $26.8 billion in corporate taxes paid in 2024, Berkshire made the highest yearly contribution of any American firm. Over six decades, the company's overall tax contributions come out to be over $101 billion. With interests estimated at $23.5 billion, the corporation raised its ownership in five key Japanese trading companies: ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo. Its public equities portfolio dropped from $354 billion to $272 billion meanwhile. Purchasing the remaining 8% share for $3.9 billion, Berkshire took complete control of Berkshire Hathaway Energy. The company in property and casualty insurance had its float rise to $171 billion. Berkshire has produced $32 billion in after-tax underwriting gains over the last 20 years. Buffett pointed out growing insurance risks from higher losses brought on by convective storms and the possibility of a big catastrophic catastrophe. Greg Abel stays in position to replace Warren Buffett (Trades, Portfolio). On May 3, Omaha will host the annual shareholder meeting with a revamped agenda featuring a book sale commemorating Berkshire Hathaway's 60-year legacy. In accordance with the 25% return of the S&P 500, Berkshire shares climbed 25.5% in 2024. Compared to the S&P 500, Berkshire's stock has had a compounded annual return of 19.9% since 1965, compared to 10.4%. This article first appeared on GuruFocus. Sign in to access your portfolio
