The increased adoption of high-speed 5G networks continues to fuel demand for the company's products. Over the next decade, I expect that augmented reality will become another major growth driver for Apple's ecosystem. You can bet that Buffett isn't selling any of his Apple shares on the latest pullback. I wouldn't be surprised if he's instead buying more of the top stock in Berkshire's portfolio. Again, though, the snapshot of what the company has already done isn't nearly as critical as what its future prospects are.
And Mastercard's future still looks very bright, particularly with several new initiatives. Mastercard Installments puts the company at the center of the fast-growing "buy now, pay later" opportunity. The new service can be used anywhere across the Mastercard network, both online and in stores.
The company's acquisition of CipherTrace bolsters its expansion of cryptocurrency services. Its pending buyout of European technology provider Aiia extends Mastercard's efforts in leading the way in open banking, which enables consumers and businesses to use their data to get financial services easily and securely.
These new products and deals reinforce the key role that Mastercard plays in the transition from cash to digital payments. Mastercard is a Buffett stock that you can buy in November and hold forever.
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Stock Market. Industries to Invest In. Getting Started. Like with Pfizer, it's possible that Buffett made a decent short-term profit depending on when exactly he sold in Q4.
But that still marks an uncharacteristically short turnaround for the famed buy-and-holder. While brick-and-mortar retailers have struggled mightily over the past few years thanks in part to the rise of e-commerce, RH has found success catering to the upper crust. It also found success catering to the work-from-home movement, as Americans decided to upgrade their home offices … and their homes in general. This is a young holding that started during the third quarter of , but it's one that fits broadly with Buffett's worldview.
Buffett stocks tend to be bets on America's growth, which is exactly what a bet on housing and housing-related industries is. And he wasn't done buying. Buffett hiked the stock by another 3. BMY beefed up in a big way a year ago when it acquired pharmaceutical giant Celgene, and that has to be a big part of the attraction to this stock. The deal brought in a pair of blockbuster multiple myeloma treatments: Pomalyst and Revlimid, the latter of which also treats mantle cell lymphoma and myelodysplastic syndromes.
That's kind of par for Bristol-Myers' course. A long track record of successful acquisitions has kept the pharma company's pipeline primed with big-name drugs over the years. Among the better-known names today are Coumadin, a blood thinner, and Glucophage, for type 2 diabetes. Indeed, recently released Q4 results were a pleasant shock for UBS analysts, who said, "We are surprised to the upside by the magnitude of beats for key growth drivers Skyrizi and Rinvoq. But another likely draw for Warren Buffett is the biopharma firm's storied dividend history.
AbbVie is a Dividend Aristocrat, by virtue of having raised its dividend every year for nearly half a century. Even better, its current 5. He added to the position with another 4. The pharma giant now accounts for almost 0. B's equity holdings. Central to Merck's fundamental performance is Keytruda, a blockbuster cancer drug approved for more than 20 indications.
Additionally, MRK has a favorable patent setup with no key brands losing marketing exclusivity until Keytruda is on patent until As for Merck's dividend, it's reliable and growing. The payout had been rising by a penny per share for years, but now it's starting to heat up.
MRK upgraded its payouts by Berkshire Hathaway's initial stake in supermarket titan Kroger, entered in Q4 , was a little bit of a head-scratcher. Many long-term investors have soured on traditional supermarket chains in a world where Walmart WMT , Amazon. But KR isn't taking the fight lying down. Believe it or not, it's one of the largest retailers in the world.
Kroger has roughly 2, retail food stores operating under such banners as Dillons, Ralph's, Harris Teeter and its namesake brand, as well as 1, gas stations and even jewelry stores under banners including Fred Meyer Jewelers and Littman Jewelers. Kroger also is an excellent dividend growth stock, upping the ante in June by B first bought shares in telco in the third quarter of The deal created a real No. It's hardly a large position, at just 0.
But clearly Buffett and his lieutenants have warmed up to this telecom stock. Don't bother trying to copycat Buffett on this one. It's another case of him getting terms unavailable to mere mortals. Berkshire Hathaway's core operations are mostly to be found in the insurance industry, but they've never been a major factor in its equity portfolio. Indeed, the company dumped what was left in its stake of Travelers TRV in early So it's something of a surprise that BRK.
Buffett picked up 4. The position accounts for a minuscule 0. And it gives Berkshire control of only 0. Shares in MMC, which provides various risk, strategy and consulting services, are long-time market laggards. Perhaps Buffett sees untapped value. The company also pays a modest dividend yielding 1.
Although energy prices aren't expected to make huge moves in the year ahead, the outlook for oil and gas is much improved and should only get better as the global economy recovers from the depths of the pandemic.
The company's scale, asset quality and reserves make it one of the healthiest players in an industry where a lot of players are on injured reserve.
And then there's the dividend, which is both generous in today's low-yield world and about as steady as they come. A slew of oil and gas companies were forced to slash or suspend their dividends last year, but not Chevron.
Indeed, it has raised the payout for 33 straight years, and management says it will protect the dividend at all costs.
With 2. That's why it looks so at home in Berkshire Hathaway's portfolio. Berkshire and Buffett initiated a brand-new stake in VZ in Q4, picking up almost In one fell swoop, the telco accounts for a sizable 3. The move also makes Buffett the fourth-largest Verizon shareholder.
It's 3. As the Oracle of Omaha has proved, boring does not equal unprofitable. His investments often reflect the most basic products and services, ranging from consumer goods like razor blades and laundry detergent to soft drinks and automobile insurance.
A basic tenet of Buffett's strategy is to invest in companies he believes will provide a long-term value investment , rather than investing in fads or technologies that may be profitable in the short run but are likely to become obsolete in the foreseeable future. His investments are guided by his famous words: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
In , Buffett famously stated, "I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty. While these investments are profitable, Buffett's most ingenious picks were his purchases of See's Candy and Gillette.
Both were so seemingly ordinary that they belied their market shares and their capacity to generate profits that most companies only dream about.
See's has been around since , and its stores, designed to look like they belong on Main Street in a traditional American village, can be found throughout the western United States as well as in many airports. Their selection is neither trendy nor flashy; the company offers the type of fare that while not in style, also never goes out of fashion.
What attracted Buffett to this investment? Primarily, it was a highly profitable business with extraordinarily attractive fundamentals. As a cash business, accounts receivable was not an issue. As for cash flow, the rapid turnover of products combined with a short distribution cycle minimized inventories. Operating strategies, such as increasing prices before Valentine's Day, provided extra revenue that went straight to the bottom line.
Thus, this enterprise was a perfect business model. In addition to financing its growth over the years, See's has proved itself to be a valuable cash cow whose profits offer Berkshire Hathaway another internal source of revenues with which to make other acquisitions.
Gillette provides another example of Buffett's investment strategy. In , Gillette was a company with core products that were so firmly entrenched in the marketplace that seemingly every household in America used them. Gillette's razors, and more significantly the razor blades that fit them, once provided the bulk of the company's profits and held a huge market share as one of the top brands in the U.
The company's Paper Mate pens, pencils, erasers, and Liquid Paper, equally lacking in glamour, were sold in every venue imaginable, from stationery stores to supermarkets to newsstands.
During the s, the razor industry was shaken up as disposable razors initially took away a significant share of sales from Gillette. In , Coniston Partners attempted a hostile takeover of the Gillette company. Gillette won that battle, and in , the company redefined the industry with the introduction of the Sensor Razor, a product that appealed to men's desire for a high-quality, hi-tech product and reinvigorated the company's sales and profits.
Through the s, Gillette's stock price gave Berkshire Hathaway a significant paper profit. Buffett's modus operandi is to be patient, so he did not liquidate his holding and take an immediate profit.
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