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Warren Buffett - The Big Four, High Conviction Stocks

Sally Jones

Sally Jones

49 followers
Guru Warren Buffett once said, “Price is what you pay. Value is what you get.” Here’s a current look at Berkshire Hathaway (BRK.A) (BRK.B)’s high conviction stocks the value investor keeps buying.

Directv (DTV)

Warren Buffett keeps buying DTV. He owns 34,037,500 shares of Directv (DTV), valued at $1.71 billion as of Dec. 31, 2012. DTV accounts for 2.3% of his equity portfolio. Buffett increased his position in the Sept. 30, 2012 quarter by 3.99% and again in the December 31, 2012 quarter by 15.16%.

Providing digital television entertainment in the U.S. and Latin America, Directv has a market cap of $29.91 billion; its shares were traded around $52.19 with a P/E ratio of 11.4 and P/S ratio of 1.1. Directv had an annual average earnings growth of 28.7% over the past five years.

Buffett’s holding history of DTV shows a steady increase since third quarter of 2011:



DaVita HealthCare Partners (DVA)

As the largest owner of the kidney dialysis provider DaVita HealthCare Partners (DVA), Buffett made his eighth add of this high-growth company on March 4, 2013, bringing his total current DVA shares to 14,973,906. The current stock price is $118.72, with a change from average down 1%.



The following stocks were named as the "Big Four" in Berkshire Hathaway's most recent shareholder letter:

Wells Fargo & Company (WFC)

Buffett’s number one high conviction stock is currently Wells Fargo & Co. (WFC), with a portfolio weighting of 20%, and 439,857,861 shares, as of Dec. 31, 2012.

The largest mortgage lender in the U.S., Wells Fargo & Company (WFC) serves one out of three households in the U.S., and reaches 35 countries. Buffett has cited the bank’s excellent management during the industry implosion.

Wells Fargo & Co. has a market cap of $187.38 billion. The current share price is $36.85 with a P/E ratio of 10.6 and P/S ratio of 2.2. Wells Fargo & Co. has had revenue growth of 9% (annual rates per share) over the past ten years.

International Business Machines Corp. (IBM)

Buffett keeps buying International Business Machines Corp. (IBM), another high conviction stock, with a portfolio weighting of 17.3%, for 68,115,484 shares, as of Dec. 31, 2012.

Praising IBM leadership for meeting their goals, Buffett has called their financial management “…brilliant, particularly in recent years as the company’s financial flexibility improved.”

IBM has a market cap of $227.92 billion; its current share price is $215.31, with a P/E ratio of 14.1 and P/S ratio of 2.2. The dividend yield of IBM stocks is 1.7%. IBM had an annual average earnings growth of 12.1% over the past 10 years.



Coca-Cola Co. (KO)

A recent look at Buffett’s Berkshire Hathaway (BRK.A)(BRK.B) portfolio also shows that the Oracle of Omaha’s stake in Wells Fargo & Co. (WFC) is outperforming long-favored Coca-Cola (KO).

Buffett holds 400,000,000 shares of Coca-Cola Co. (KO), with a portfolio weighting of 19.3%, as of Dec. 31, 2012.

A world-wide brand, the Coca-Cola Company (KO) had an annual average earnings growth of 9.6% over the past ten years. The Coca-Cola Co. has a market cap of $172.16 billion; its shares were traded at around $38.63 with a P/E ratio of 19.6 and P/S ratio of 3.7.



American Express Co. (AXP)

Another of Buffett’s "Big Four," American Express Co. (AXP), makes up 11.6% of his portfolio, holding 151,610,700 shares, valued at $8.62 billion as of Sept. 30, 2012.

American Express Co. has a market cap of $72.13 billion; its share price is currently $65.35, with a P/E ratio of 16.8 and P/S ratio of 2.359. American Express Co. shows revenue growth at 3.2% over ten years (annual rates per share), with EBITDA growth of 5% over ten years.

In the first week of March 2013, Buffett reported to shareholders that the Berkshire Hathaway book value increased by 14.4% in 2012, compared with the 16% total gain of the S&P 500. For the years from 1965 to 2012 (48 years), Berkshire's book value gained 19.7% a year, while the S&P 500 gained 9.4% a year. The company has a market cap of $254.24 billion.

For investor Guru Buffett’s top buys, top sales and top holdings, take a look:



Here is the complete portfolio of Warren Buffett.

More valuable information on Warren Buffett:

1. Warren Buffett's Undervalued Stocks

2. Warren Buffett's Top Growth Companies

3. Warren Buffett's High Yield stocks

4. Stocks that Warren Buffett keeps buying

[url=http://www.gurufocus.com/holdings.php?GuruName=Warren+Buffett&tab=highconviction][/url]

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 2.7/5 (18 votes)

Comments

vgm
Vgm - 1 year ago
Sally,

You must be the only person on Earth that doesn't know that DTV and DVA are NOT Buffett picks. They are by Berkshire's money managers Ted Weschler and Todd Combs.

It's tiresome to see such a lack of awareness from someone who's purporting to be informed about their subject matter.
adamcz
Adamcz - 1 year ago
Are you too lazy to read Buffett's shareholder letters, or just being dishonest in your presentation?

Please leave your comment:


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