In this article, we discuss 10 value stocks in Warren Buffett’s latest portfolio.
Warren Buffett of Berkshire Hathaway is widely known for his value investing prowess in the finance world. Some of the most prominent stories of his incredible career in the stock market so far have hinged around his profits during times of crisis. As inflation rises, interest rates rise, and technology stocks get battered, Buffett has quietly grown his fortune. According to news platform Bloomberg, the personal net worth of the Oracle of Omaha, as Buffett is affectionately known, has climbed close to $8 billion this year.
Buffett is now among the five richest people in the world. His rise is in stark contrast to the fortunes of other billionaires. In fact, all the four people above Buffett on the Bloomberg Billionaires Index, Elon Musk, Jeff Bezos, Bernard Arnault, and Bill Gates, have lost money amid a massive slide in growth stocks. As of March 11, Musk has lost $62 billion, while Gates has lost around $13 billion. Buffett, long a proponent of value investing, is profiting from the crisis as bank stocks, which he purchased at a bargain during the last financial crisis, skyrocket.
As per latest data, the portfolio of Berkshire Hathaway at the end of Q4 2021 was worth more than $330 billion, an increase of over $30 billion compared to filings for the end of September 2021. Buffett added three new stocks to his portfolio during the fourth quarter and reduced holdings in eight equities. He also sold off two stocks completely while making additional purchases in four stocks. Some of the top value stocks in the portfolio of Warren Buffett at the end of December 2021 included Verizon Communications Inc. (NYSE:VZ), U.S. Bancorp (NYSE:USB), and Bank of America Corporation (NYSE:BAC), among others discussed in detail below.
Our Methodology
The companies listed below were picked from the investment portfolio of Berkshire Hathaway at the end of the fourth quarter of 2021. The stocks that have a Price-to-Earning (PE) Ratio of less than 21 were preferred for the list.
Data from around 900 elite hedge funds tracked by Insider Monkey in Q4 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Value Stocks in Warren Buffett’s Latest Portfolio
10. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
PE Ratio: 20.83
Chevron Corporation (NYSE:CVX) is an integrated oil and gas firm. Hedge funds have been piling into the stock as energy prices surge. At the end of the fourth quarter of 2021, 53 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Chevron Corporation (NYSE:CVX), up from 51 in the preceding quarter worth $4.4 billion.
Securities filings reveal that Berkshire Hathaway owned over 38 million shares of Chevron Corporation (NYSE:CVX) at the end of the fourth quarter of 2021 worth $4.4 billion, representing 1.35% of the portfolio. The fund increased its stake in the firm by 34% compared to filings for the third quarter.
Just like Verizon Communications Inc. (NYSE:VZ), U.S. Bancorp (NYSE:USB), and Bank of America Corporation (NYSE:BAC), Chevron Corporation (NYSE:CVX) is one of the stocks that elite investors are monitoring as inflation rises.
In its Q3 2021 investor letter, Goehring & Rozencwajg Associates highlighted a few stocks and Chevron Corporation (NYSE:CVX) was one of them. Here is what the fund said:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron Corporation (NYSE:CVX) executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron Corporation (NYSE:CVX) expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
9. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 40
PE Ratio: 19.14
Mondelez International, Inc. (NASDAQ:MDLZ) makes and sells food and beverage products. According to the latest filings, Berkshire Hathaway owned 578,000 shares of the company at the end of the fourth quarter of 2021 worth $38.3 million, representing 0.01% of the portfolio.
Elite hedge funds are bullish on Mondelez International, Inc. (NASDAQ:MDLZ) stock. Among the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Mondelez International, Inc. (NASDAQ:MDLZ), with 9.2 million shares worth more than $611 million.
8. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 64
PE Ratio: 16.78
American Express Company (NYSE:AXP) provides payment and travel services. According to the latest data, Berkshire Hathaway owned over 151 million shares of American Express Company (NYSE:AXP) at the end of the fourth quarter of 2021 worth $24.8 billion, representing 7.49% of the portfolio.
Major hedge funds hold large stakes in American Express Company (NYSE:AXP). Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in American Express Company (NYSE:AXP), with 15.7 million shares worth more than $2.5 billion.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:
“In financials, American Express Company (NYSE:AXP) has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
7. RH (NYSE:RH)
Number of Hedge Fund Holders: 58
PE Ratio: 15.43
RH (NYSE:RH) operates as a home furnishing retailer. The hedge fund sentiment around the stock is largely positive. At the end of the fourth quarter of 2021, 58 hedge funds in the database of Insider Monkey held stakes worth $4.8 billion in RH (NYSE:RH), compared to 57 in the previous quarter worth $4.9 billion.
Regulatory filings show that Berkshire Hathaway owned more than 1.8 million shares of RH (NYSE:RH) at the end of December 2021 worth $973 million, representing 0.29% of the portfolio.
In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and RH (NYSE:RH) was one of them. Here is what the fund said:
“RH (NYSE:RH) was also a top contributor during the quarter. RH (NYSE:RH) is a leading luxury retailer in home furnishings, including high-end luxury furniture, home décor, lighting, textiles, etc. RH (NYSE:RH) has experienced high demand for its products over the past year, despite many of its galleries and integrated restaurants being closed, at least temporarily, in 2020. We think the management team has continued to make thoughtful investments in the core business as well as other adjacencies to further meet customer needs. We believe RH (NYSE:RH) has a long runway to further expand into other home furnishings categories, expand its footprint both domestically and internationally, and launch other luxury adjacent categories.”
6. DaVita Inc. (NYSE:DVA)
Number of Hedge Fund Holders: 32
PE Ratio: 12.46
DaVita Inc. (NYSE:DVA) provides kidney dialysis services. It is one of the top health stocks in the finance world. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Gates Capital Management is a leading shareholder in DaVita Inc. (NYSE: DVA), with 1.6 million shares worth more than $182 million.
The hedge fund of Warren Buffett entered the first quarter of 2022 with over 36 million shares of DaVita Inc. (NYSE:DVA) in its portfolio worth more than $4.1 billion, representing 1.24% of the total investments.
In addition to Verizon Communications Inc. (NYSE:VZ), U.S. Bancorp (NYSE:USB), and Bank of America Corporation (NYSE:BAC), DaVita Inc. (NYSE:DVA) is one of the stocks that institutional investors have on their radar amid rising interest rates.
5. The Bank of New York Mellon Corporation (NYSE:BK)
Number of Hedge Fund Holders: 49
PE Ratio: 11.95
The Bank of New York Mellon Corporation (NYSE:BK) provides financial products and services. Hedge funds have been loading up on the stock. At the end of the fourth quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $5.1 billion in The Bank of New York Mellon Corporation (NYSE:BK), compared to 46 in the previous quarter worth $4.6 billion.
Latest filings show that Berkshire Hathaway owned over 72 million shares of The Bank of New York Mellon Corporation (NYSE:BK) at the end of December 2021 worth $4.2 billion, representing 1.26% of the portfolio. The fund registered no new activity around the company during the quarter.
In its Q3 2020 investor letter, First Eagle Investment Management, an asset management firm, highlighted a few stocks and The Bank of New York Mellon Corporation (NYSE:BK) was one of them. Here is what the fund said:
“The world’s largest custody bank, Bank of New York Mellon has been challenged by the persistently low-rate environment. While custody tends to be a wide-moat business, revenue generation is highly sensitive to net interest margins. Low rates have also hurt Bank of New York’s other primary line of business—investment management—as it has been forced to waive fees on its money market funds to preserve their net asset value.”
4. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 94
PE Ratio: 11.49
Wells Fargo & Company (NYSE:WFC) is a diversified financial services firm. Securities filings reveal that Berkshire Hathaway owned over 675,054 shares of the company at the end of December 2021 worth $32 million, representing a small portion of the portfolio.
Wells Fargo & Company (NYSE:WFC) is one of the favorite finance stocks on Wall Street. At the end of the fourth quarter of 2021, 94 hedge funds in the database of Insider Monkey held stakes worth $6.11 billion in Wells Fargo & Company (NYSE:WFC), compared to 88 the preceding quarter worth $6.18 billion.
In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the fund said:
“Detractors to performance relative to the index include financial services holdings such as Wells Fargo. While banks in general have suffered due to the recession and experienced credit losses, Wells Fargo also suffered from operational missteps. It is our expectation, however, that our bank holdings in general will benefit from stronger economic growth as the pandemic recedes; and we believe Wells Fargo in particular, will, over time, lower their costs and successfully grow their businesses.”
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 84
PE Ratio: 11.28
Bank of America Corporation (NYSE:BAC) provides banking and financial products. Securities filings reveal that Berkshire Hathaway owned more than 1 billion shares in Bank of America Corporation (NYSE:BAC) at the end of December 2021 worth $44.9 billion, representing 13.57% of the portfolio.
Hedge funds have been piling into Bank of America Corporation (NYSE:BAC) stock as interest rates rise. At the end of the fourth quarter of 2021, 84 hedge funds in the database of Insider Monkey held stakes worth $47 billion in Bank of America Corporation (NYSE:BAC), compared to 72 in the previous quarter worth $46 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation (NYSE:BAC) was one of them. Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
2. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 46
PE Ratio: 10.31
U.S. Bancorp (NYSE:USB) is a financial services holding firm. The hedge fund sentiment around the stock is overwhelmingly positive. At the end of the fourth quarter of 2021, 46 hedge funds in the database of Insider Monkey held stakes worth $7.9 billion in U.S. Bancorp (NYSE:USB), up from 42 the preceding quarter worth $8.3 billion.
According to the latest data, Berkshire Hathaway owned more than 126 million shares of U.S. Bancorp (NYSE:USB) at the end of December 2021 worth $7.1 billion, representing 2.14% of the portfolio. The fund registered no new activity around the stock during the fourth quarter.
In its Q4 2020 investor letter, Mairs & Power, an asset management firm, highlighted a few stocks and U.S. Bancorp (NYSE:USB) was one of them. Here is what the fund said:
“On the negative side, one of the Fund’s biggest detractor in 2020 was U.S. Bancorp (USB). Like all banks, U.S. Bank was hurt by the difficult interest rate environment and credit cycle concerns. We believe banks are strong enough to survive the current sector doldrums, and they remain some of the market’s most attractive opportunities.”
1. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 63
PE Ratio: 10.00
Verizon Communications Inc. (NYSE:VZ) provides technology and communications services. At the end of December 2021, Berkshire Hathaway owned over 158 million shares in Verizon Communications Inc. (NYSE:VZ) worth $8.2 billion, representing 2.49% of the portfolio.
Elite hedge funds hold large stakes in Verizon Communications Inc. (NYSE:VZ). At the end of the fourth quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $10.8 billion in Verizon Communications Inc. (NYSE:VZ), compared to 57 in the previous quarter worth $10.3 billion.
In its Q1 2021 investor letter, Miller/Howard Investments, an asset management firm, highlighted a few stocks and Verizon Communications Inc. (NYSE:VZ) was one of them. Here is what the fund said:
“We sold Verizon (VZ) based on concerns over how much they might spend in ongoing spectrum auctions. Management may legitimately view spending billions of dollars to expand their spectrum holdings as necessary, but we believe the payoff will be slow and will make it challenging to grow the dividend at a good pace.”
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Disclosure. None. 10 Value Stocks in Warren Buffett’s Latest Portfolio is originally published on Insider Monkey.
