Warren Buffett 2024 Portfolio: Top 5 Stock Picks

4. Coca-Cola Co (NYSE:KO)

Warren Buffett’s Stake: $23,572,000,000

Berkshire Hathaway opened its position in Coca-Cola Co (NYSE:KO) back in 2001 and as of date Warren Buffett is a huge fan of Coca-Cola Co (NYSE:KO). Over the years Berkshire has enjoyed billions in consistent dividend payments from the beverage company. As of the end of the fourth quarter of 2023 Berkshire owns a $23 billion stake in Coca-Cola Co (NYSE:KO).

As of the end of the fourth quarter of 2023, 62 hedge funds had stakes in Coca-Cola Co (NYSE:KO).

Hayden Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its third 2023 investor letter:

“It’s not just emerging markets either, where one could argue a “scarcity premium” given fewer quality public companies. Even in the US, The Coca-Cola Company (NYSE:KO) trades at ~30x P/E despite having the same earnings as 10 years ago.

Both of these companies actually have lower revenues than 10 – 15 years ago too, indicating that their profit growth is mostly from margin expansion. This can only last for so long before there’s no more excess expenses left to cut.

I find it ironic that all these companies trade as “bond-equivalents” in the minds of investors – even commanding lower yields than US treasuries, the safest security in the world. But it’s clear that their businesses are not nearly as safe. Coca-Cola is facing disruption risk from consumers shifting to new, heathier beverage brands.

But these companies are ~35% more expensive than US Treasuries, despite the heightened risk. On a risk-adjusted basis, one could argue the implied premium is even higher.”

Perhaps the explanation is simply the price volatility difference between these stocks and treasuries over the last two years. For example, 10-year Treasury bonds are down ~-20% since the beginning of 2022. By comparison, KO and PG are remarkably down only -4 – 6% over that time frame.”