What Would Warren Buffett Do? 7 Stocks Berkshire Bought & Sold in Q4

Stock Market

Warren Buffett stocks always spark immense curiosity in the investing world. The Oracle of Omaha’s investment moves are closely watched, with his quarterly filings offering valuable insights. In the latest update, Berkshire Hathaway’s (NYSE:BRK.A,NYSE:BRK.B) 13F filing reveals a quiet fourth quarter marked by more selling than buying.

Berkshire Hathaway, known for its wide-moat investment approach, reported revenues of roughly $1.8 billion, excluding new purchases. Among the notable changes in Warren Buffett stocks are three stocks that were added and four that were sold. This careful curation of investments sheds light on the shifts in Buffett’s strategy, offering potential insights into sectors and stocks that are gaining or losing favor in the eyes of the market.

SiriusXM (SIRI)

Source: T. Schneider / Shutterstock.com

Warren Buffett’s investment into SiriusXM (NASDAQ:SIRI) underscores a keen recognition of its enduring value and growth potential in the satellite, internet radio, and automotive landscape.

His continued trust in SIRI stock in Q4 with a striking 315.6% increase to 30.6 million shares, signifies a bullish outlook on the company’s prospects.

SiriusXM ends the year with a strong subscriber base of almost 34 million, highlighting its dominance and investment appeal. It trades at an attractive 15x forward non-GAAP earnings, 32% below sector median. It trades at 9.6 times forward cash flows, 22% lower than the sector median. SiriusXM is one of the Warren Buffet stocks providing rewarding investment opportunity.

Occidental Petroleum (OXY)

Source: T. Schneider / Shutterstock.com

Another of the Warren Buffett stocks Berkshire Hathaway continued its bullish march on during Q4 is Occidental Petroleum (NYSE:OXY).

Berkshire bought an additional 4.3 million shares. This strategic accumulation has taken Berkshire’s OXY stake to over 248 million shares, valued at over $14 billion.

However, the allure of OXY stock, bolstered by Buffett’s endorsement, may raise valuation concerns. Yet, Berkshire’s expanding investment underscores a deeper conviction in OXY stock’s intrinsic value.

As one of Buffett’s top six stock holdings, OXY’s strategic importance to Berkshire Hathaway’s portfolio is undeniable. This latest investment spree reflects an optimistic view of the company’s long-term prospects.

Consequently, Tipranks’ analysts assign a ‘moderate buy’ rating to OXY stock, attracting a 12% upside potential from current prices. Moreover, it offers a 1.45% dividend yield, with 34 consecutive years of payouts.

Chevron Corporation (CVX)

Source: tishomir / Shutterstock.com

Warren Buffett’s investment journey with Chevron Corporation (NYSE:CVX) is a masterclass in conviction in the face of global market volatility.

Buffett’s investment in CVX stock in late 2020, while navigating through geopolitical tensions and a global energy crisis, showcases his investing prowess.

In early 2021, Berkshire made strategic sales of its CVX stock, followed by calculated purchases as crude oil prices peaked in 2022. During Q4, he added 16 million shares elevating the firm’s stake to 126 million shares valued at more than $18.5 billion.

Chevron’s allure as an investment lies not just in its impressive track record of dividend growth over 36 years but also in its enduring business model.

It has yielded a remarkable total return of 85.5% over the past three years, vastly outperforming the S&P 500’s 33.4%. Hence, Buffett’s renewed investment in CVX is a strong vote of confidence in the company’s robust fundamentals, strategic direction, and direction. That’s what makes it one of the Warren Buffett stocks to buy soon.

Apple (AAPL)

Source: Yalcin Sonat / Shutterstock.com

Warren Buffett’s decision to cut Berkshire Hathaway’s stake in Apple (NASDAQ:AAPL) by over 10 million shares seems to be more of a nuanced strategic move.

Since 2016, Buffett’s investment in Apple has been a cornerstone of Berkshire’s portfolio, representing 45% of its investments and delivering over 328% total return in three years.

AAPL stock is down 5.3% year-to-date, attributable to a dip in legacy device sales. The Vision Pro augmented reality headset is expected to change the game in the coming quarters.

As Apple’s first major launch since the Apple Watch, the Vision Pro has received rave reviews, heralding a potential new era for Apple’s product lineup. Hence, the recent sale is less about doubt and more about strategic portfolio management in anticipation of the company’s next growth phase.

D.R. Horton (DHI)

Source: Casimiro PT / Shutterstock.com

Warren Buffett’s foray into the homebuilder space with his firm’s investment in D.R. Horton (NYSE:DHI) underscored his knack for identifying undervalued gems in the second quarter of last year.

However, Berkshire surprised everyone, shedding its entire share stake in the company by the end of Q4.

D.R. Horton’s recent financial achievements, though, indicate a completely different picture. It achieved a 35% increase in net new home sales YoY, showing its resilience. The constrained housing inventory enhances D.R. Horton’s allure positions it for a rebound.

The anticipation of declining mortgage rates in late 2024 further bolsters the outlook for the company. Buffett’s broader economic concerns, highlighted during Berkshire Hathaway’s annual meeting, might have hinted at the strategic portfolio realignment with DHI stock.

Markel (MKL)

Source: madamF / Shutterstock.com

Berkshire Hathaway’s divestiture from Markel (NYSE:MKL)  in Q4 underscores a bleak outlook on the insurance giant’s operations.

Despite Markel’s commendable achievements in its investing and venture arms, the insurance sector’s horrible performance paints a grim picture of its operational health.

The stark 79% drop in underwriting profit to $133 million in 2023 from the previous year’s $627 million is alarming. These numbers indicate significant problems in the company’s insurance operations, suggesting major inefficiencies.

Buffett significantly lightened Berkshire’s investment in Markel by selling off more than 312,000 shares in the third quarter. It eventually culminated in a complete exit by the end of Q4, which speaks volumes.

This move, offloading all 159,000 remaining shares of MKL stock, is not merely a portfolio adjustment but a critique of Markel’s current trajectory and its dimming prospects in the insurance space.

HP (HPQ)

Source: Shutterstock

Berkshire Hathaway notably reduced its stake in HP (NYSE:HPQ), signaling a bearish outlook on the computer hardware player. This move aligns with a troubling trend in the PC market, marked by a stark decline in shipments, plummeting by double digits in the Q3.

In a dramatic shift, Berkshire slashed its HP holdings by 77% during Q4, offloading roughly 80 million shares. This divestiture reflects HPQ stock’s struggle to keep abreast with the broader market, as it has significantly underperformed the S&P 500 since 2022.

However, HP could be on to something as it revitalizes its sales trajectory by launching an AI-enhanced PC. The company already offers AI workstations for enterprise clients and wants to take this technology to the consumer market. Nevertheless, amidst the speculative nature of this turnaround and the current dismal performance, Buffett’s bearish position on HP is understandable.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

Articles You May Like

If You Can Only Buy One Magnificent 7 Stock in April, It Better Be One of These 3 Names
Cream of the Crop: The 3 Highest-Rated Dividend Aristocrats to Buy in April
The 3 Most Undervalued Healthcare Stocks to Buy in April 2024
3 Under-$100 Dividend Stocks to Add to Your April Buy List
3 AI Stocks Trading Below Their True Potential