Berkshire Hathaway, the conglomerate owned by Warren Buffett, has a reputation for investing in stocks that generate long-term gains. The company’s investment portfolio includes six stocks that make up almost three-quarters of its total investment. In this blog post, we will discuss these six stocks, their percentage of invested assets, and the reasons why Berkshire Hathaway invests in them.
Table of Warren Buffet Berkshire Hathaway’s top holdings
| Company | Value of holding | Percentage of invested assets |
|---|---|---|
| Apple | $141.9 billion | 44.1% |
| Bank of America | $28.7 billion | 8.9% |
| Chevron | $25.5 billion | 7.9% |
| Coca-Cola | $24 billion | 7.5% |
| American Express | $23.7 billion | 7.4% |
| Kraft Heinz | $12.3 billion | 3.8% |
Note: The above table includes the top 6 holdings of Berkshire Hathaway as of the provided information, and the values and percentages are rounded off.
The first stock on the list is Apple, which accounts for 44.1% of Berkshire Hathaway’s invested assets. Apple is viewed by Buffett as one of Berkshire Hathaway’s “four giants,” and the company’s products and brand are well-known, which tends to keep customers loyal as well as draw in new businesses and consumers. Additionally, Apple has shifted its focus to a services-oriented business model, which should continue to generate impressive cash flow in any economic environment.
The second stock is Bank of America, which accounts for 8.9% of invested assets. Among banks, none has Warren Buffett’s attention quite like Bank of America, as he is very comfortable and confident investing in bank stocks. One of the most interesting things about Bank of America is its sensitivity to interest rate movements, which makes it beneficial in a growing U.S. economy.
The third stock is Chevron, which accounts for 7.9% of invested assets. Berkshire Hathaway’s large position in Chevron is likely a reflection of Buffett and his team’s expectation that oil prices will remain above their historical norm. Additionally, Chevron is quite shareholder-friendly, having raised its base annual dividend for 36 consecutive years.
The fourth stock is Coca-Cola, which accounts for 7.5% of invested assets. Coca-Cola is Berkshire Hathaway’s longest-held position since 1988, and the company’s dividend payout has risen in each of the past 61 years. What Coca-Cola brings to the table for Buffett and his team is almost unparalleled consistency, as it operates in all but three countries worldwide and is able to bring in predictable operating cash flow in developed markets while continuing to penetrate emerging markets.
The fifth stock is American Express, which accounts for 7.4% of invested assets. American Express is a payment processor and lender that can generate annual fees and interest income on top of payment-processing fees. The company has a history of successfully attracting high-income clientele, who are often less susceptible to inflationary and economic pressures.
The sixth and final stock is Kraft Heinz, which accounts for 3.8% of invested assets. Berkshire Hathaway and 3G Capital jointly acquired Heinz in 2013 and later merged it with Kraft Foods. While the company has faced some challenges in recent years, including a $15 billion write-down in 2019, Berkshire Hathaway continues to invest in Kraft Heinz, as it believes that the company has the potential to turn things around.
Occidental Petroleum (NYSE: OXY) is one of Warren Buffett’s energy sector investments, alongside Chevron. With more than 208 million shares purchased since the beginning of 2022, Buffett is bullish on Occidental’s prospects. Occidental offers even more upstream exposure than Chevron, which makes it more susceptible to sustained crude oil prices above historical averages. However, as an integrated operator, Occidental’s downstream chemical operations can benefit from lower oil prices, providing some hedge against fluctuating oil prices.
Moody’s (NYSE: MCO) is a credit-ratings agency and is the eighth stock in Berkshire Hathaway’s portfolio, accounting for approximately 2.3% of invested assets. Moody’s credit-rating segment has been its primary source of revenue since the financial crisis, but with interest rates rising and inflation rates soaring, credit-rating demand may slow. However, the company’s analytics division can pick up the slack by providing software and tools to manage risk and compliance. In a time of increasing macro uncertainty, Moody’s Analytics could thrive.
In conclusion, Berkshire Hathaway’s investment portfolio includes 8 stocks that make up almost 86% of its total investment. These stocks, including Apple, Bank of America, Chevron, Coca-Cola, American Express, and Kraft Heinz, have different reasons for being in the portfolio, but they all have a history of generating long-term gains.