According to top 10 holdings data, the top six holdings of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) as of year-end 2018 were Apple Inc. (AAPL, Financial), Bank of America Corp. (BAC, Financial), Wells Fargo & Co. (WFC, Financial), The Coca-Cola Co. (KO, Financial), American Express Co. (AXP, Financial) and The Kraft Heinz Co. (KHC, Financial).
Known as the “Oracle of Omaha,” Buffett follows a value investing strategy that adapts Benjamin Graham’s approach. Buffett and Berkshire co-manager Charlie Munger (Trades, Portfolio) prefer to buy good companies at fair prices instead of fair companies at good prices. Such companies meet the following four criteria: an understandable business, favorable long-term prospects, operated by honest and competent management and available at an attractive price.
Apple
Even though Berkshire reduced its holding of Apple during the fourth quarter, Buffett’s conglomerate still owns 249,589,329 shares of the Cupertino, California-based tech giant. The position occupies 21.51% of Berkshire’s equity portfolio as of year-end 2018.
GuruFocus ranks Apple’s profitability 8 out of 10 on several positive indicators, which include consistent revenue growth and operating margins that are still outperforming 96% of global competitors even though margins have contracted over the past five years.
Bank of America
Berkshire increased its Bank of America holding to 896,167,600 shares during the quarter. The conglomerate dedicated 12.06% of its equity portfolio to the position.
The Charlotte, North Carolina-based bank provides a wide variety of financial products and services to individuals, companies and institutional investors. Auxier Focus Fund manager Jeff Auxier (Trades, Portfolio) said in his December quarter shareholder letter the bank’s management is working to reduce risk and increase efficiency. Despite this, GuruFocus ranks the bank’s financial strength 4 out of 10, primarily due to debt ratios underperforming over 60% of global competitors.
Wells Fargo
Berkshire owns 426,768,902 shares of Wells Fargo as of quarter-end, giving the position 10.74% equity portfolio space.
The San Francisco-based bank offers a wide variety of financial products and services through three business segments: community banking, wholesale banking and wealth and investment management. GuruFocus ranks the bank’s financial strength 4 out of 10 on several weak signs, which include cash-to-debt and debt-to-equity ratios underperforming 69% of global competitors. The website warns Wells Fargo has increased its long-term debt by $60.2 billion over the past three years.
Coca-Cola
Berkshire owns 400 million shares of Coca-Cola as of quarter-end, giving the stake 10.35% equity portfolio weight.
The Atlanta-based company manufactures a wide variety of nonalcoholic beverage brands, including Coca-Cola, Diet Coke, Fanta, Sprite, Minute Maid, Powerade and Dasani. GuruFocus ranks the company’s profitability 6 out of 10: even though revenues have declined 9.70% per year over the past three years, a rate that underperforms 85% of global competitors, Coca-Cola’s operating margin has increased 5.40% per year over the past five years and is outperforming 89% of global competitors.
American Express
Berkshire owns 151,610,700 shares of American Express as of quarter-end, giving the position 7.89% equity portfolio space.
American Express offers a wide variety of credit services, including credit cards, travel services, network services, stored value products and loans to businesses and individuals. GuruFocus ranks the company’s financial strength 3 out of 10 on several weak signs, which include an equity-to-asset ratio that underperforms 89% of global competitors. Additionally, the website warns American Express has increased its long-term debt by $8.7 billion over the past three years.
Kraft Heinz
Berkshire owns 325,634,818 shares of Kraft Heinz, giving the stake 7.66% equity portfolio space.
CNBC columnist Thomas Franck said Berkshire took a more than $4 billion hit on Kraft Heinz, a stock that tumbled over 27% on Friday on weak fourth-quarter performance and announcements regarding a dividend cut and a subpoena from the U.S. Securities and Exchange Commission. Despite this, Buffett still defended his investments in Coca-Cola and Kraft Heinz: in May 2018, Buffett said to CNBC reporter Becky Quick it is “very hard” to take share away from “good businesses” like Heinz Ketchup and Philadelphia Cream Cheese.
See also
Premium members have access to key features like the All-in-one Guru Screener and predefined screens that are based on legendary investors like Graham and Buffett. Table 1 lists the value screener record for our most popular value screens as of Friday.
| Screener | USA | Canada | UK | Europe | Asia | Oceania | Latin America | Africa | India |
| Graham Net-Net | 279 | 66 | 56 | 274 | 615 | 13 | 5 | 12 | 180 |
| Undervalued Predictable | 56 | 6 | 32 | 79 | 59 | 5 | 28 | 8 | 7 |
| Buffett-Munger | 34 | 4 | 16 | 46 | 70 | 0 | 21 | 4 | 29 |
| Peter Lynch PE | 36 | 2 | 14 | 43 | 57 | 0 | 5 | 2 | 4 |
| Peter Lynch PS | 118 | 9 | 49 | 104 | 102 | 8 | 33 | 25 | 22 |
| Peter Lynch PB | 170 | 20 | 69 | 149 | 101 | 9 | 39 | 20 | 41 |
| Lynch p2ebitda | 187 | 8 | 59 | 190 | 117 | 8 | 10 | 15 | 26 |
| Hist Low PS | 42 | 3 | 18 | 38 | 108 | 0 | 14 | 5 | 16 |
| Hist Low PB | 53 | 2 | 21 | 44 | 108 | 2 | 21 | 9 | 14 |
| High Div Yield | 72 | 7 | 12 | 103 | 23 | 11 | 15 | 13 | 5 |
Table 1: Value screener record as of Feb. 22
Disclosure: No positions.
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