Warren Buffett is one of the best investors of all time. Since 1965, Berkshire Hathaway (BRK.A -1.16%) (BRK.B -1.15%)the masterfully engineered conglomerate he helped build has returned more than 20% a year, creating fortunes for his shareholders along the way.
Therefore, Berkshire’s public stock portfolio is closely watched by investors looking to create lasting wealth in the stock market. Investing alongside great investors can be an excellent strategy for those looking for extraordinary returns. Here are Buffett’s largest stock holdings.
Buffett once called Apple (AAPL -1.86%) “probably the best business I know of in the world.” That’s high praise from the master investor, who has become one of the world’s richest people by carefully identifying elite companies with powerful competitive advantages.
So it’s perhaps not surprising that Apple is Berkshire’s largest holding by far. Buffett’s investment company owns more than 915 million shares of Apple that are currently valued at a staggering $142 billion.
Buffett values Apple’s beloved brand and the sticky ecosystem. He has come to understand the central place of the iPhone in the lives of more than a billion people. Buffett also knows that once someone buys an iPhone, they tend to buy other Apple products and services and remain a loyal customer.
Plus, Buffett appreciates the tech titan’s tremendous cash flow output. Apple generated more than $90 billion in free cash flow during the first nine months of its fiscal year 2022. That huge sum allows Apple to reward its investors with an ever-increasing stream of dividend income and a massive program of repurchase of shares. These stock purchases have helped increase Berkshire’s ownership percentage of Apple’s earnings over time, which Buffett applauds.
Bank of America: 10.2%
Bank of America (BAC -1.90%) it is Berkshire’s second-largest holding company and another of Buffett’s favourites. BofA, as the company is often called, represents more than 10% of Berkshire’s portfolio, a stake valued at roughly $35 billion.
Buffett thinks highly of CEO Brian Moynihan, who helped strengthen BofA’s operations after its near collapse during the Great Recession and financial crisis of 2007-2009. Since he took office on January 1, 2010, Moynihan has prioritized risk management and a return to traditional banking fundamentals.
While pandemic-related disruptions and a difficult macroeconomic backdrop have been challenging for BofA and other financial institutions, Buffett sees the bank as a long-term central holding company. And over longer periods of time, blue-chip banks tend to grow and profit along with the expansion of the broader economy.
To maximize its chances of success, BofA is cutting costs in its traditional branch operations and aggressively investing in digital banking technology. This has positioned BofA to benefit from the rise of mobile banking and app-based transactions, and gain market share against less tech-savvy rivals.
With Bank of America’s share price down approximately 22% in 2022 primarily due to fears of a near-term recession, you now have an opportunity to buy shares of this leading bank at a deep discount.
The oil sector has recently become the apple of Buffett’s eye. Is easy to see why. Energy stocks tend to do well during inflationary times. Y Chevron (CLC -2.75%) it is particularly well positioned to benefit from higher oil and gas prices.
The war in Ukraine is prompting many countries in Europe and around the world to seek new sources of reliable energy supplies. Chevron is working to meet this vital global need for energy by increasing its production of oil and liquefied natural gas.
The energy titan’s profits, in turn, are soaring. Chevron’s revenue rose 83% year over year to $68.8 billion in the second quarter, while its adjusted profit soared 245% to $11.4 billion. Chevron is committed to passing much of its earnings on to shareholders through a strong dividend (its shares currently yield 3.5%) and share buybacks.
These factors undoubtedly contributed to Buffett’s decision to make Chevron Berkshire the third largest public shareholding. Berkshire owns more than 163 million shares of the oil and gas giant, a stake valued at nearly $27 billion.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. dark joe has no position in any of the mentioned stocks. The Motley Fool holds positions and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 Call on Berkshire Hathaway (B shares), long March 2023 $120 Call on Apple, short January 2023 $200 Call on Berkshire Hathaway (B shares), short January 2023 $265 Call on Berkshire Hathaway (B shares) and short $130 March 2023 calls on Apple. The Motley Fool has a disclosure policy.