Warren Buffett 2024 Portfolio: Top 12 Stock Picks

Published on February 27, 2024 at 7:47 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a detailed look at the Warren Buffett 2024 Portfolio: Top 12 Stock Picks. For a quick overview of such stocks, read our article Warren Buffett 2024 Portfolio: Top 5 Stock Picks.

Warren Buffett recently penned his anticipated annual letter to Berkshire shareholders. The key themes of Buffett’s letter were similar to what they are every year, and understandably so. Buffett does not believe in changing his investing strategies based on short-term market movements. Buffett said Berkshire’s goal remains owning entire or parts of businesses which “enjoy good economics that are fundamental and enduring.”

Buffett on Lack of Good Investing Opportunities

What caught the market’s attention was Buffett’s revelation that Berkshire’s cash pile has soared to about $167.6 billion as of the end of 2023. But what was alarming in this figure was the reason why Buffett, who is always a fan of letting the money do the work, is not deploying this cash. Buffett said that there remain “only a handful” of companies that impress Berkshire in the US and outside the country there are “essentially no candidates” for capital deployment opportunities for Berkshire.

Buffett said to think that investors have gotten wiser over time would be a mistake. The billionaire said the constant availability of financial news and trading platforms have only made the investors “active” because of the “casino-like” behavior of the markets.

“Market Seizures”: An Opportunity for Warren Buffett

In his latest letter, Warren Buffett talked about how he likes to view “market seizures” as investing opportunities:

“Occasionally, markets and/or the economy will cause stocks and bonds of some large and fundamentally good businesses to be strikingly mispriced. Indeed, markets can – and will – unpredictably seize up or even vanish as they did for four months in 1914 and for a few days in 2001. If you believe that American investors are now more stable than in the past, think back to September 2008. Speed of communication and the wonders of technology facilitate instant worldwide paralysis, and we have come a long way since smoke signals. Such instant panics won’t happen often – but they will happen. Berkshire’s ability to immediately respond to market seizures with both huge sums and certainty of performance may offer us an occasional large-scale opportunity. Though the stock market is massively larger than it was in our early years, today’s active participants are neither more emotionally stable nor better taught than when I was in school. For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.”

Methodology

For this article we scanned Warren Buffett’s Q4’2023 portfolio and chose his top 12 stock picks. These were the stocks Buffett had in his portfolio heading into 2024. Some top picks of Berkshire are Apple Inc. (NASDAQ:AAPL), Coca-Cola Co (NYSE:KO) and Chevron Corp (NYSE:CVX). 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).

12. Kroger Co (NYSE:KR)

Warren Buffett’s Stake: $2,285,500,000

Warren Buffett continues to hold Kroger Co (NYSE:KR) in his portfolio for 2024. Berkshire Hathaway had a $2.3 billion stake in the grocery company as of the end of 2023. BofA recently set a $65 price target on Kroger Co (NYSE:KR) stock, which shows a strong upside potential from the current levels of around $47.

As of the end of the fourth quarter of 2023, 45 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Kroger Co (NYSE:KR).

In its fourth quarter 2023 investor letter, Oakmark Global Fund stated the following regarding The Kroger Co. (NYSE:KR):

“The Kroger Co. (NYSE:KR) (U.S.) is the second-largest grocery retailer in America, behind only Walmart. Although the grocery industry is highly competitive, Kroger’s scale advantages allow it to offer a more compelling value proposition than smaller peers and earn higher returns on capital. In recent years, the market has assigned Kroger a lower multiple due to concerns that e-commerce would disrupt traditional brick-and-mortar grocery businesses. However, we believe Kroger’s performance through the pandemic highlighted that its store footprint, distribution infrastructure, technology investments and strong brand all position the company well for a world with higher online grocery adoption. The stock trades for just 10x our estimate of next year’s EPS, which we believe is attractive given Kroger’s competitive positioning and earnings growth outlook. The pending merger with Albertsons could accelerate the company’s earnings growth and produce additional scale advantages. If the merger is not approved, the company will have the capacity to return over 25% of its market cap to shareholders.”

11. VeriSign, Inc (NASDAQ:VRSN)

Warren Buffett’s Stake: $2,639,503,654

DNS registry and internet infrastructure company VeriSign, Inc (NASDAQ:VRSN) ranks 11th in our list of the best Warren Buffett stocks for 2024. Berkshire owns a $2.6 billion stake in VeriSign, Inc (NASDAQ:VRSN) as of the end of 2023. The stock is down by about 3.8% over the past one year.

In February, VeriSign, Inc (NASDAQ:VRSN) posted Q4 results. Adjusted EPS in the period came in at $2.60, beating estimates by $0.74. Revenue in the period jumped 3% year over year to $380.4 million, surpassing estimates by $2.53 million.

10. Citigroup Inc (NYSE:C)

Warren Buffett’s Stake: $2,841,792,358

Warren Buffett’s 2024 portfolio includes Citigroup Inc (NYSE:C), in which the billionaire’s Berkshire Hathaway owns a $2.84 billion stake. BofA recently published a list of “Magnificent 80” stocks which are expected to deliver more in dividends than cash over the next three years. Citigroup Inc (NYSE:C) was part of the list. According to BofA estimates Citi has a three-year annualized dividend yield of 4.8%

As of the end of the fourth quarter of 2023, 87 hedge funds tracked by Insider Monkey had stakes in Citigroup Inc (NYSE:C).

Patient Capital Management stated the following regarding Citigroup Inc. (NYSE:C) in its fourth quarter 2023 investor letter:

“Citigroup Inc. (NYSE:C), run by Jane Fraser since 2021, is on a multi-year journey to reorganize the business and reach return on tangible common equity of 11-12% by 2025-2026 (and higher further out). Citigroup is finally taking the hard actions necessary, cutting unprofitable departments, taking out middle management layers, and reducing overall headcount. We have high confidence Citi will hit its targets.”

9. Davita Inc (NYSE:DVA)

Warren Buffett’s Stake: $3,781,371,913

Kidney dialysis services company Davita Inc (NYSE:DVA) ranks ninth in our list of Warren Buffett stocks for 2024. Berkshire owns a $3.78 billion stake in Davita Inc (NYSE:DVA) as of the end of the fourth quarter of 2023. Earlier this month Davita Inc (NYSE:DVA) posted fourth quarter results. Adjusted EPS in the quarter came in at $1.87, beating estimates by $0.21. Revenue in the quarter jumped 7.9% year over year to $3.15 billion, beating estimates by $140 million.

As of the end of the fourth quarter of last year, 39 hedge funds tracked by Insider Monkey had stakes in Davita Inc (NYSE:DVA).

8. Moody’s Corp (NYSE:MCO)

Warren Buffett’s Stake: $9,635,028,496

Warren Buffett’s 2024 portfolio features Moody’s Corp (NYSE:MCO), whose shares are up by about 29% over the past one year. Moody’s Corp’s (NYSE:MCO) recently increased its dividend by 10.4% and said its board of directors authorized an additional $1 billion in share repurchases.

A total of 56 hedge funds tracked by Insider Monkey had stakes in Moody’s Corp (NYSE:MCO) as of the end of the fourth quarter of 2023.

L1 Capital International Fund made the following comment about Moody’s Corporation (NYSE:MCO) in its Q3 2023 investor letter:

“Portfolio adjustments during the September 2023 quarter were modest, diversified, but meaningful. In total around 10% of the Fund was divested and reinvested into opportunities we consider provide a superior risk-adjusted base case return.

We continued to trim our investment in high-quality technology businesses such as Intuit, mentioned previously. These adjustments were purely for valuation considerations, rather than any business concerns and some of these companies remain significant portfolio holdings.

The Fund’s remaining investment in Moody’s Corporation (NYSE:MCO)’s was fully divested during the September quarter. Moody’s is the world’s leading credit rating, risk assessment and analytics business. The core credit ratings business is largely a duopoly with S&P Global, with modest competition from Fitch Ratings and regional competitors – a great example of our preferred ‘Noah’s Ark’ industry structure.

The share price of Moody’s has been volatile over recent times, often reacting too greatly to changes in short-term capital markets conditions. During the quarter we took advantage of positive market sentiment to divest our holding at a share price we considered to be above fair value. Moody’s is very well managed and ‘ticks all our boxes’ for one of the world’s highest-quality businesses. The company has moved from our Portfolio to our Bench of potential investments. Having a Bench of ‘ready to go’ investment opportunities is a core aspect of our investment process. We continue to analyse Moody’s as if we owned it and are excited by the pull-back in the share price from recent highs.”

7. Kraft Heinz Co (NASDAQ:KHC)

Warren Buffett’s Stake: $12,041,975,570

Kraft Heinz Co (NASDAQ:KHC) is one of the most important stocks in Warren Buffett’s 2024 portfolio. Berkshire has been holding the stock since 2015 and over the past nine years the fund hardly made any changes to its stake in the consumer company. As of the end of the last quarter of 2023 Berkshire had a $12 billion stake in Kraft Heinz Co (NASDAQ:KHC).

Kraft Heinz Co (NASDAQ:KHC) recently posed Q4 results. Adjusted EPS in the period came in at $0.78, surpassing estimates by $0.01. Revenue totaled $6.9 billion, missing estimates by $80 million.

6. Occidental Petroleum Corp (NYSE:OXY)

Warren Buffett’s Stake: $14,552,270,657

Warren Buffett owns a $15 billion stake in Occidental Petroleum Corp (NYSE:OXY) as of the end of 2023. Berkshire kept boosting its stake in the energy giant last year. Berkshire bought a whopping 10 million shares of Occidental Petroleum Corp (NYSE:OXY) worth $588 million during a single week in December 2023.

Reuters recently reported that Occidental Petroleum Corp (NYSE:OXY) was exploring a sale of Western Midstream Partners, its natural gas-focused pipeline operator.

As of the end of the fourth quarter of 2023, 66 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Occidental Petroleum Corp (NYSE:OXY). In addition to Occidental, Buffett also likes Apple Inc. (NASDAQ:AAPL), Coca-Cola Co (NYSE:KO) and Chevron Corp (NYSE:CVX).

Click to continue reading and see Warren Buffett 2024 Portfolio: Top 5 Stock Picks.

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Disclosure. None. Warren Buffett 2024 Portfolio: Top 12 Stock Picks was initially published on Insider Monkey.

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AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

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Click to continue reading…

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