In this article, we will take a detailed look at the 10 Stocks Warren Buffett and Insiders Are Crazy About.
Bullish calls on the stock market are growing louder by the day as more and more analysts believe the stock market rally that started on the back of mega-cap tech stocks is sustainable and the US economy might not see the much-dreaded recession after all. Wedbush analysts led by Dan Ives recently said in a note that the tech rally fueled by the AI revolution can keep going. Wedbush analysts in a note called the current AI wave a “transformational tech trend” that they have “not seen since the start of the internet in the mid-90s.”
Wedbush analysts also believe the AI revolution would create more opportunities for software companies down the road and could lead to a massive $1 trillion in spending over the next decade.
2024: “An Abnormally Normal Year”?
Dynasty Financial’s Ron Insana recently said while talking to CNBC that the market would remain calm and stable in 2024. Insana believes the market overreacted to the latest inflation report and PPI was not as bad as it looks. He thinks that making assumptions based on a single month’s inflation data would be a wrong approach as he believes inflation will continue to decline for the rest of the year. He also thinks the Fed will begin cutting rates starting the middle of 2024. He thinks 2024 would be an “abnormally normal” year barring any “external shocks” which he is not expecting.
Given this bullish outlook, it would be important to see which stocks masters of the money game have been buying heading into 2024.
Methodology
For this article we first scanned Warren Buffett’s Q4’2023 portfolio and picked stocks that have seen a significant insider buying activity since mid-2023 through March 6, 2024. We picked only those stocks that were bought by directors, officers and executives. These are the stocks in which Warren Buffett has significant stakes and they also saw strong insider buying activity. Some of the top names in the list include Bank of America Corp (NYSE:BAC), Mastercard Inc (NYSE:MA) and Snowflake Inc (NYSE:SNOW). With each stock we have mentioned Buffett’s stake as of the end of 2023. Why do we pay attention to what hedge funds are buying? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Liberty Latin America Ltd Class A (NASDAQ:LILA)
Warren Buffett’s Stake: $9,424,707
Liberty Latin America Ltd Class A (NASDAQ:LILA) ranks 10th in our list of the stocks Warren Buffett and insiders are crazy about. Liberty Latin America Ltd Class A (NASDAQ:LILA) CEO Balan Nair bought 16,313 shares of Liberty Latin America Ltd Class A (NASDAQ:LILA) at $6.14 per share on February 26, when the stock was trading at around $6.13. As of March 6 the stock was trading at around $6.28. This means since Liberty Latin America Ltd Class A’s (NASDAQ:LILA) CEO bought the company shares the stock has gained about 2.45%.
Warren Buffett’s Berkshire Hathaway owns a $19.2 million stake in the telecom company Liberty Latin America Ltd Class A (NASDAQ:LILA). Over the past one year the stock has lost about 30% in value.
Last month, during its latest earnings call, the company talked about guidance and gave key business updates:
“Additionally, we remain focused on volume growth and improving our pricing effectiveness through utilization of AI tools and capabilities, which should underpin our top line expansion in 2024. Importantly, we are near the finish line in Puerto Rico and are looking forward to inflecting the business in H2 and driving improved financial performance on the back of cross sell activities, more compelling CVPs and cost rationalization, including the elimination of the AT&T TSA expenditures. As Balan said, Puerto Rico is a tale of two halves. We will get through the migration and the team is poised to launch strong commercial plans in the second half. Inorganically, we had two key announcements in 2023 – our tower modernization, which unlocks capital and enhances flexibility across the group, and the DISH transaction which upon expected close in 2024 should further strengthen our Puerto Rico business and help us further accelerate our mobile growth.
In terms of capital deployment, we continue to shrink our equity in 2023 and reduce the outstanding principal on our LLA convertible bond. We expect to see more of that in 2024, including the repayment of the remaining outstanding balance of the convertible bond this summer. Wrapping up, we delivered 2023 growth in terms of adjusted OIBDA and adjusted FCF before partner distributions, which is a solid result when viewed across the industry and the overall business climate across the region.”
Read the full earnings call transcript here.
9. Lennar Corp (NYSE:LEN)
Warren Buffett’s Stake: $20,452,277
Amy Banse, a director at Lennar Corp (NYSE:LEN), started amassing Lennar shares in June 2023 and continued her buying spree until October 2023. In her latest transaction, on October 13, she bought 920 shares of Lennar Corp (NYSE:LEN) at $108.71 per share. Since then, the stock has gained about 45.94% through March 6, 2024.
Warren Buffett also loves the home construction company. Berkshire Hathaway owns a $20.5 million stake in Lennar Corp (NYSE:LEN) as of the end of 2023. Warren Buffett started buying shares in Lennar Corp (NYSE:LEN) in the second quarter of 2023.
As of the end of the fourth quarter of 2023, 65 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Lennar Corp (NYSE:LEN).
8. Sirius XM Holdings Inc (NASDAQ:SIRI)
Warren Buffett’s Stake: $220,129,527
Jennifer C. Witz, the CEO of Sirius XM Holdings Inc (NASDAQ:SIRI), snapped up 250,000 shares of the media and radio company in August 2023 at $4.11 per share. Since then the stock has gained about 1.7%
As of the end of 2023, Warren Buffett’s Berkshire Hathaway owns a $220 million stake in Sirius XM Holdings Inc (NASDAQ:SIRI). Over the past one year Sirius XM Holdings Inc (NASDAQ:SIRI) shares have lost about 3% in value.
Like Sirius, Warren Buffett is also long Bank of America Corp (NYSE:BAC), Mastercard Inc (NYSE:MA) and Snowflake Inc (NYSE:SNOW).
7. Paramount Global Class B (NASDAQ:PARA)
Warren Buffett’s Stake: $936,539,643
Shari Redstone, the daughter of media magnate Sumner Redstone, is the non-executive chairwoman of Paramount Global Class B (NASDAQ:PARA). She bought 165,000 shares of Paramount Global Class B (NASDAQ:PARA) in May 2023 at $15.06 per share. At that time the stock was trading at around $14.95, while as of March 6 the stock price was $10.21. This shows that during this time the stock fell about 46%.
Warren Buffett decreased his stake in Paramount Global Class B (NASDAQ:PARA) by 33% in the fourth quarter of 2023, ending the period with a $937 million stake in Paramount Global Class B (NASDAQ:PARA).
6. Aon PLC (NYSE:AON)
Warren Buffett’s Stake: $1,193,182,000
Management consulting firm Aon PLC (NYSE:AON) ranks sixth in our list of the stocks Warren Buffett and insiders love. On February 7 Lester B. Knight, a board member at Aon PLC (NYSE:AON), bought 25,000 shares of Aon PLC (NYSE:AON) at $301.97 per share. Over the past one month the stock has gained about 4.8%.
As of the end of the fourth quarter of 2023, Warren Buffett’s Berkshire owns a $1.2 billion stake in Aon PLC (NYSE:AON). In addition to AON, Warren Buffett also loves Bank of America Corp (NYSE:BAC), Mastercard Inc (NYSE:MA) and Snowflake Inc (NYSE:SNOW).
Aon talked about guidance and future plans in its latest earnings call:
“Looking forward, we expect to deliver margin expansion in 2024 and over the long-term, as we continue our track-record of cost discipline and managing investments in long-term growth on ROIC basis. We expect restructuring savings will fall to the bottom-line and contribute to full-year adjusted operating margin expansion. Restructuring actions completed in 2023 are expected to generate $70 million of run-rate savings in 2024. At this time, we continue to expect a $100 million of run-rate savings in 2024 as we continue to execute against our plans at Aon Business Services and our business. As we’ve previously communicated, we conservatively modeled the expected acquisition of NFP to close mid-year 2025.
While the combined adjusted operating margin will initially be lower than Aon standalone, we expect over time to continue to improve Aon’s overall margins through operational improvement and the impacts from previously communicated cost synergies. Turning to EPS. Adjusted EPS was flat in Q4. Operating income grew 10%, but was offset by a headwind from a higher tax-rate in the quarter and non-operating expense. For the full-year, organic revenue growth and margin expansion translated into adjusted EPS growth of 6%, overcoming a headwind from non-operating expense. I’d note, the change in other non-operating expense had a $0.15 per share or 4% unfavorable impact in Q4 and a $0.98 per share or 7% unfavorable impact for the full-year.”
Read the full earnings call guidance here.
Polen Global Growth Strategy stated the following regarding Aon plc (NYSE:AON) in its fourth quarter 2023 investor letter:
“AON PLC’s (NYSE:AON) stock price underperformed this past quarter following the announcement of the company’s acquisition of NFP, a middle market insurance broker, for $13 billion. Though the deal complements Aon’s current business, it is expected to be dilutive to earnings in the near term, prompting a sell-off in the shares. We will continue to assess the merits of the NFP transaction, but it does not currently change our long-term view of Aon, which we view as a steady, durable, low-teens earnings compounder.”
5. Snowflake Inc (NYSE:SNOW)
Warren Buffett’s Stake: $1,218,949,824
Mark D. McLaughlin on May 31, 2023, bought 1,831 shares of Snowflake Inc (NYSE:SNOW) at $163.80 per share. At the time the stock was trading at around $165.36, while as of March 6 the stock price was $167.75, showing a 1.44% increase in share price.
Warren Buffett’s Berkshire Hathaway owns a $1.3 billion stake in Snowflake Inc (NYSE:SNOW) as of the end of 2023. The Oracle of Omaha first bought a stake in Snowflake Inc (NYSE:SNOW) back in the third quarter of 2020 and since then he has left the stake almost untouched.
ClearBridge Multi Cap Growth Strategy made the following comment about Snowflake Inc. (NYSE:SNOW) in its Q2 2023 investor letter:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.
Snowflake Inc. (NYSE:SNOW), a cloud-based data platform company, is positioned well to help enterprises better leverage their own data to get the most out of AI models. Though it is still early days in terms of adoption, Snowflake saw workloads for data science, machine learning, and AI use cases grow more than 90% year-over-year in its most recent quarter.”
4. Liberty Media Corp Series C (NASDAQ:LSXMK)
Warren Buffett’s Stake: $1,243,534,615
John C. Malone, who is the Chairman of Liberty Media Corp Series C’s (NASDAQ:LSXMK) board and also the largest voting shareholder, bought 5,219 shares of Liberty Media Corp Series C (NASDAQ:LSXMK) on August 7, 2023 at $36.77 per share. On that day the stock was trading at around $23.46 while today the stock price stands at $29.41. The stock gained about 25% in this period.
Insider Monkey’s database of hedge funds and their holdings shows that Warren Buffett’s Berkshire Hathaway had a $1.24 billion stake in Liberty Media Corp Series C (NASDAQ:LSXMK) as of the end of the fourth quarter of 2023.
Baron Small Cap Fund stated the following regarding The Liberty SiriusXM Group (NASDAQ:LSXMK) in its fourth quarter 2023 investor letter:
“We exited positions in E2open Parent Holdings, Inc. and The Liberty SiriusXM Group (NASDAQ:LSXMK) this quarter. Liberty SiriusXM was a longtime successful holding. The stock reacted favorably to their definitive agreement for the tracking stock to be combined with SiriusXM in creating a new public company. This was the catalyst we had been anticipating, and the implied valuation for the combination felt fair to us so we sold out because future growth is suspect.”
3. Charter Communications Inc (NASDAQ:CHTR)
Warren Buffett’s Stake: $1,488,232,788
Chris Winfrey, the President and CEO of Charter Communications Inc (NASDAQ:CHTR), snapped up 5,050 shares of the telecom company on February 6 at $295.29 per share. As of March 6 the stock was trading at around $280.85. That means since Winfrey bought Charter Communications Inc (NASDAQ:CHTR) shares the stock has gained about 5.14%.
As of the end of the fourth quarter of 2023, Warren Buffett owns a $1.5 billion stake in Charter Communications Inc (NASDAQ:CHTR).
Here is what Weitz Conservative Allocation Fund has to say about Charter Communications, Inc. (NASDAQ:CHTR) in its Q3 2023 investor letter:
“We swapped the Fund’s Liberty Broadband Corporation (NASDAQ:LBRDK) shares back to Charter Communications, Inc. (NASDAQ:CHTR) (Charter is by far Liberty Broadband’s largest asset), and the combined position was the most notable quarterly contributor. Investor sentiment around broadband’s competitive position became less negative, and the stocks rebounded nicely from what we considered oversold levels.”
2. Mastercard Inc (NYSE:MA)
Warren Buffett’s Stake: $1,700,345,238
Richard K. Davis is a board member at Mastercard Inc (NYSE:MA). He bought 1,000 shares of the payments giant on November 9, 2023, at $390.96 per share. On November 9 last year the stock was trading at $387.96. As of March 6 the stock is trading at around $467.52. This shows the stock gained about 20% during this period.
Warren Buffett has been holding stakes in Mastercard Inc (NYSE:MA) since the first quarter of 2011. As of the end of 2023 Berkshire had a $1.7 billion stake in Mastercard Inc (NYSE:MA).
Ensemble Capital Management stated the following regarding Mastercard Incorporated (NYSE:MA) in its fourth quarter 2023 investor letter:
“Mastercard Incorporated (NYSE:MA) (7.21% weight in the Fund): Payment companies are data companies. As we discussed last quarter in our write up of Mastercard, merchants can generate significant value from analyzing payment data to better understand their customers. Mastercard has long built AI-based products to enhance payment security and provide merchants with rich data analytics. In December, they rolled out Muse, a new online shopping companion that merchants who utilize certain Mastercard services can install on their own websites.
Muse seeks to replicate the instore experience of working with a salesclerk by allowing the customer to use natural language to browse products. Online shopping already works well if you know exactly what you are looking for, but Muse is striving to help customers find things to buy even when they aren’t sure what they are looking for.
Mastercard (7.21% weight in the Fund): In late October, Mastercard reported earnings that investors interpreted as pointing to a near term slowdown in payment growth. The stock fell 5.6% on the day. By the end of the next week, the stock had recovered its losses and went on to reach a new all time high on the last day of the year. But the 7.9% gain on the quarter slightly trailed the S&P 500.”
1. Bank of America Corp (NYSE:BAC)
Warren Buffett’s Stake: $34,776,127,042
Thomas Woods, a board member at Bank of America Corp (NYSE:BAC), bought 25,000 shares of the bank on November 1, 2023, at $26.25 per share. At that time Bank of America Corp (NYSE:BAC) stock was trading at $26.40, while on March 6 the stock price was $35.39. This shows a gain of about 34%.
Warren Buffett’s Berkshire owns a $34 billion stake in Bank of America Corp (NYSE:BAC) as of the end of the fourth quarter of 2023.
Diamond Hill Large Cap Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its fourth quarter 2023 investor letter:
“Among our top individual contributors in Q4 were KKR and Bank of America Corporation (NYSE:BAC). Banking and financial services company Bank of America rallied alongside large-cap banks broadly in Q4 as the market focused less on interest-rate risks amid the Fed’s announcement it was likely done raising interest rates. Banks also likely generally benefited from a relief rally following three-plus quarters of negative sentiment to start the year. Industry trends aside, however, we maintain our conviction in Bank of America’s position given its diversified, low-cost deposit base, which we believe remains less susceptible to flight.”
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Disclosure. None. 10 Stocks Warren Buffett and Insiders Are Crazy About was initially published on Insider Monkey.
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