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James Li
James Li
Articles (1355)  | Author's Website |

Warren Buffett's Top 5 Holdings as of the 2nd Quarter

Berkshire increases Apple's portfolio weight to over 40%

According to top 10 holdings statistics, a Premium feature of GuruFocus, the top five holdings of Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) as of the second quarter were Apple Inc. (NASDAQ:AAPL), Bank of America Corp. (NYSE:BAC), Coca-Cola Co. (NYSE:KO), American Express Co. (NYSE:AXP) and The Kraft Heinz Co. (NASDAQ:KHC).

Buffett, who is celebrating his 90th birthday on Aug. 30, studied under the legendary Benjamin Graham at Columbia University in 1951. The "Oracle of Omaha" purchased Berkshire Hathaway, which was then a textile manufacturing company, during the 1960s. Under his leadership, shares of Berkshire averaged a 21.4% compounded annual gain in book value per share from 1965 to 2006. The Omaha, Nebraska-based insurance conglomerate's market cap stood at approximately $519 billion on Thursday.

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Buffett follows a value investing strategy based on his mentor's approach. The legendary guru and his co-manager, Charlie Munger (Trades, Portfolio), seek companies using a four-criterion approach to investing: understandable business, favorable long-term prospects, operated by honest and competent people and available at a very attractive price.

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As of the June-quarter filing date, Berkshire's $202.41 billion equity portfolio contains 44 stocks, with one new position and a turnover ratio of 1%. The top three sectors in terms of weight are technology, financial services and consumer defensive, representing 45.76%, 31.72% and 15.01% of the equity portfolio.

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Apple

Berkshire owns 245,155,566 shares of Apple, unchanged from the first-quarter filing. Shares occupy 44.18% of the equity portfolio, up from the previous quarter's weight of 35.52%.

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On Thursday, shares of the Cupertino, California-based tech giant closed at $500.04, down 1.20% from Wednesday's close of $506.09. Berkshire has gained over $80 billion in its investment in Apple since initially buying shares during the first quarter of 2016.

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GuruFocus ranks Apple's profitability 10 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and margins and returns that are outperforming over 95% of global competitors. Despite this, Apple's valuation ranks 1 out of 10 on several signs of overvaluation, which include price-book and price-sales ratios near 10-year highs and are underperforming over 90% of global hardware companies.

Bank of America

According to GuruFocus Real-Time Picks, a Premium feature, Berkshire owns 1,032,852,006 shares of Bank of America as of Aug. 4, giving the stake 14.57% weight in the equity portfolio.

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GuruFocus ranks the Charlotte, North Carolina-based bank's financial strength rank 3 out of 10 on the back of debt ratios underperforming over 64% of global competitors despite equity-to-asset ratios outperforming over 56% of global banks.

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Coca-Cola

Berkshire owns 400 million shares of Coca-Cola, giving the position 8.83% weight in the equity portfolio.

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GuruFocus ranks the Atlanta-based beverage giant's financial strength 5 out of 10, weighed down by debt-to-equity ratios near 3 and underperforming 94% of global competitors despite a strong Altman Z-score of 3.43.

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American Express

Berkshire owns 151,610,700 shares of American Express, giving the holding 7.13% weight in the equity portfolio.

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GuruFocus ranks the New York-based credit card company's financial strength 3 out of 10, weighed down by equity-to-asset and debt-to-equity ratios underperforming over 68% of global competitors.

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Kraft Heinz

Berkshire owns 325,634,818 shares of Kraft Heinz, giving the position 5.13% weight in the equity portfolio.

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GuruFocus ranks Kraft Heinz's financial strength 4 out of 10 on several warning signs, which include a weak Altman Z-score of 0.79 and debt ratios that are underperforming over 60% of global competitors.

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See also

The following video summarizes Berkshire's top holdings.

Disclosure: The author is long Apple and Coca-Cola as of this writing. The mention of holdings in this article reflect data as of the June filing and does not include trades made in July-August.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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