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James Li
James Li
Articles (895)  | Author's Website |

Warren Buffett’s Top 7 Holdings as of His 89th Birthday

Several of Oracle of Omaha’s top holdings are broadly owned by gurus

Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett (Trades, Portfolio) is celebrating his 89th birthday on Friday, the last trading day of August and the day before investors enjoy three days off in light of Labor Day. As of Friday, the conglomerate’s top-seven holdings according to current portfolio statistics are Apple Inc. (NASDAQ:AAPL), Bank of America Corp. (NYSE:BAC), Coca-Cola Co. (NYSE:KO), Wells Fargo & Co. (NYSE:WFC), American Express Co. (NYSE:AXP), The Kraft Heinz Co. (NASDAQ:KHC) and US Bancorp (NYSE:USB).

Berkshire’s $208.10 billion equity portfolio contains 47 stocks as of quarter-end. The top-three sectors in terms of weight are financial services, technology and consumer staples, with weights of 47.18%, 25.71% and 15.73%.

“Birthday Oracle’s” favorite market indicator still significantly high despite volatile August

The Dow Jones Industrial Average closed at 26,399.25, up 363.15 points from Wednesday’s close of 26,036.10, the first time the Dow closed above 26,000 since dropping below the milestone on Aug. 23. Despite this, approximately 325 points of the increase occurred on Thursday on China’s comments that it opposed escalating trade tensions, hinting that it would suspend retaliation to U.S. President Trump’s tariff hikes on Chinese imports.

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Despite the volatile month, the ratio of total market cap to gross domestic product stood at 138.4%, down approximately 7% from the all-time high of 148.5% yet over 23% higher than the “significant overvaluation” threshold of 115%. Based on this valuation level, the expected market return over the next eight years is -1.6% per year, assuming a reversion to the mean valuation level of 80%.

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Gurus celebrate Buffett’s birthday by agreeing to his investments

According to the Aggregated Portfolio of Gurus, a Premium feature, most of Berkshire’s top holdings are in the most-broadly-held portfolio, a model portfolio that tracks the performance of the 25 stocks with the highest number of gurus owning shares. According to backtest results, the model portfolio returned a cumulative return of 238.58% since 2006, with an annualized return of 13.26% per year over the past 10 years. The portfolio’s annualized return outperforms the Standard & Poor’s 500 index's annualized return of 11.1% over the same period.

Table 1 details the number of gurus owning each of Berkshire’s top-seven holdings.

Company (Ticker)

Berkshire Equity Portfolio Weight

# of Gurus Owning Shares

# of Gurus Buying Shares

Combined Weight

Apple Inc. (NASDAQ:AAPL)

23.74%

35

9

72.34%

Bank of America Corp. (NYSE:BAC)

12.92%

39

15

104.43%

Coca-Cola Co. (NYSE:KO)

9.79%

19

3

37.87%

Wells Fargo & Co. (NYSE:WFC)

9.32%

42

18

93.69%

American Express Co. (NYSE:AXP)

8.99%

24

4

39.32%

The Kraft Heinz Co. (NASDAQ:KHC)

4.86%

9

3

5.77%

US Bancorp (NYSE:USB)

3.34%

27

8

34.68%

Table 1

Apple

Buffett’s conglomerate owns 249,589,329 shares of Apple as of quarter-end, unchanged from the prior quarter. Despite this, the equity portfolio weight declined approximately 0.03% from the prior-quarter weight of 23.77%. Shares of Apple closed at $208.49, down 0.25% from Thursday’s close of $209.01.

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The Cupertino, California-based company designs and manufactures various consumer electronic products, including iPhones, iPads, Macs and the Apple Watch. GuruFocus ranks Apple’s profitability 8 out of 10 on several positive indicators, which include a strong Piotroski F-score of 7, a three-star business predictability rank, and operating margins that are outperforming over 93% of global competitors.

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Other gurus joining Buffett’s “Apple Club” include Ken Fisher (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio).

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Bank of America

Berkshire owns 927,248,600 shares of Bank of America, up 31,081,000 shares, or 3.47%, from the prior quarter. The equity portfolio weight increased approximately 0.53% from the prior-quarter weight of 12.39%. While shares averaged $28.85 during the June quarter, shares closed at $27.51 on Friday, up 0.62% from the previous close of $27.33.

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Bank of America said in its July 29 quarterly report that net earnings for the first half of 2019 were $1.45 per diluted share, up 20 cents from the prior-year quarter. Higher net interest income and lower noninterest expenses contributed to the increase in net earnings. According to GuruFocus, Bank of America’s net margin of 31.77% outperforms 68.20% of global banks.

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Other gurus with large holdings in Bank of America include Dodge & Cox and PRIMECAP Management (Trades, Portfolio).

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Coca-Cola

Berkshire owns 400 million shares of Coca-Cola, unchanged from the prior quarter. Despite this, the equity portfolio weight increased 0.39% from the prior-quarter weight of 9.40%. Shares closed at $55.04, down just 1 cent from the previous close of $55.05.

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The Atlanta-based company manufactures a wide range of nonalcoholic beverages, including Coca-Cola, Diet Coke, Fanta, Sprite and Minute Maid. GuruFocus ranks Coca-Cola’s profitability 6 out of 10: Although the company’s profit margins are outperforming over 90% of global competitors, Coca-Cola’s per-share revenue has declined approximately 6.50% per year on average over the past five years.

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Wells Fargo

Berkshire owns 409,803,773 shares of Wells Fargo, unchanged from the prior quarter but down 16,965,129 shares, or 3.98%, from fourth-quarter 2018. The equity portfolio weight declined 0.61% from the prior-quarter weight of 9.93%. Shares of Wells closed at $46.57, up 0.82% from the previous close of $46.19.

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The San Francisco-based bank operates financial services through three business segments: community banking, wholesale banking and wealth and investment management. According to GuruFocus, the bank’s cash-debt ratio and debt-equity ratio underperform over 61% of global competitors, suggesting poor financial strength. Despite this, Wells Fargo’s equity-asset ratio of 0.10 underperforms just 50.32% of global banks.

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American Express

Berkshire owns 151,610,700 shares of American Express, unchanged from the prior quarter. Despite this, the equity portfolio weight increased 0.68% from the prior-quarter weight of 8.31%. Shares of American Express closed at $120.37, down 0.30% from the previous close of $120.73.

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2019 GuruFocus Value Conference Speaker Mario Gabelli (Trades, Portfolio) said in his June-quarter letter that the New York-based credit services company can “enter the deposit gathering market as an alternate source of funding.” Gabelli said he that in the long run, American Express has potential to “expand its product base” through other channels like corporate purchasing and social media.

The Kraft Heinz

Berkshire owns 325,442,152 shares of Kraft Heinz, unchanged from the the prior quarter. Despite this, the equity portfolio weight declined 0.47% from the prior-quarter weight of 5.33%. Shares closed at $25.52, up 0.75% from the previous close of $25.33.

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Kraft Heinz is trading near its 52-week low of $24.86 on the heels of the company reporting weak first-half results and postponing the filing of its first and second-quarter reports in light of its Securities and Exchange Commission subpoena regarding its impairment asset controls.

US Bancorp

Berkshire owns 132,459,618 shares of US Bancorp, up 3,150,787, or 2.44%, from the prior quarter. The equity portfolio weight increased 0.22% from the prior-quarter weight of 3.12%. While shares averaged $51.52 during the second quarter, shares closed at $52.69, up 0.58% from the previous close of $52.38.

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The Minneapolis-based bank operates four financial services segments: wholesale and commercial real estate banking; consumer and small-business banking; wealth management and security services; and payment services. According to GuruFocus, US Bancorp’s cash-debt and debt-equity ratios underperform over 66% of global competitors, suggesting poor financial strength. Despite this, US Bancorp’s equity-asset ratio of 0.11 outperforms 59.91% of global banks.

Disclosure: No positions.

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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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