In this article, we discuss the top 5 stock picks of Warren Buffett. If you want to read our detailed analysis of these stocks, go directly to Warren Buffett’s Top 10 Stock Picks.
5. The Kraft Heinz Company (NASDAQ:KHC)
Percentage of Berkshire Hathaway’s 13F Portfolio: 4.08%
Berkshire Hathaway’s Stake Value: $11,989,874,000
Number of Hedge Fund Holders: 33
The Kraft Heinz Company (NASDAQ:KHC) is an American food and beverage company. Among its most popular brands are Jell-O, Kool-Aid, Capri Sun, Lunchables, Heinz, and TGI Fridays.
The Kraft Heinz Company (NASDAQ:KHC) topped analyst revenue estimates by $241 million when the company announced a $6.32 billion in sales in Q3. According to BofA analysts, the company’s pricing contributed to greater organic sales and $1.2 billion in adjusted EBITDA.
The blue-chip stock is one of Warren Buffett’s top stock picks as the food company offers a handsome dividend yield of 4.59%.
Berkshire Hathaway is the leading shareholder of The Kraft Heinz Company (NASDAQ:KHC), with 325 million shares worth $11 billion as of the end of the third quarter of 2021. Overall, there were 33 funds that had a stake in the food company between June and September. The total value of this stake is $12.3 billion.
4. The Coca-Cola Company (NYSE:KO)
Percentage of Berkshire Hathaway’s 13F Portfolio: 7.15%
Berkshire Hathaway’s Stake Value: $20,988,000,000
Number of Hedge Fund Holders: 61
Warren Buffett has held The Coca-Cola Company (NYSE:KO) since 1988. At the end of the third quarter of 2021, the hedge fund owned 400 million shares of the Atlanta-based company, accounting for 7.15% of the fund’s total holdings.
At the end of the September quarter, 61 funds out of the 867 tracked by Insider Monkey had stakes in The Coca-Cola Company (NYSE:KO), compared to 62 in the previous quarter.
The beverage giant announced in early November its acquisition of a New York-based sports drink company BodyArmor SuperDrink. The Coca-Cola Company (NYSE:KO) initially acquired a 15% stake in the energy drink company in 2018 and recently paid $5.6 billion to buy the remaining 85% of BodyArmor. Following this, Morgan Stanley analyst Dara Mohsenian maintained a $65 price target for The Coca-Cola Company (NYSE:KO) with an Overweight rating.
3. American Express Company (NYSE:AXP)
Percentage of Berkshire Hathaway’s 13F Portfolio: 8.65%
Berkshire Hathaway’s Stake Value: $25,399,340,000
Number of Hedge Fund Holders: 57
Berkshire Hathaway is the biggest stakeholder of American Express Company (NYSE:AXP) as of the end of the September quarter. Warren Buffett’s conglomerate owned nearly 152 million shares of the stock worth $25 billion between June and September. According to the 13F filings tracked by Insider Monkey, the value of Berkshire’s holding in American Express Company (NYSE:AXP) has climbed by nearly $10 billion from a year ago as the stock returned 30% in the last twelve months.
Overall, 57 funds of the 867 elite funds tracked by Insider Monkey reported owning stakes in the New York-based company at the end of the third quarter of 2021.
In October, the New York-based credit card company announced its Q3 earnings and the company’s year over year revenue climbed 25% to $10.9 billion. The increase in sales in the third quarter is supported by a 19% boost in consumer and small business spending on goods and services. CEO Stephen Squeri of American Express Company (NYSE:AXP) recently announced that the bank’s operations performed better in October and November than in Q3, a trend he expects to persist into 2022.
Meanwhile, Deutsche Bank analyst Meng Jiao kept a Buy rating on American Express Company (NYSE:AXP) on October 25 post-earnings result. Jiao increased his price target for the bank stock to $200 from $190 previously.
In the Q2 2021 investor letter of ClearBridge Investments, the fund mentioned American Express Company (NYSE:AXP) and discussed its stance on the firm. Here is what the fund said:
“In financials, American Express 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 consumers 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.”
2. Bank of America Corporation (NYSE:BAC)
Percentage of Berkshire Hathaway’s 13F Portfolio: 14.61%
Berkshire Hathaway’s Stake Value: $42,878,771,000
Number of Hedge Fund Holders: 72
Bank of America Corporation (NYSE:BAC) is Berkshire Hathaway’s second-largest holding. At the end of the September quarter, the bank stock represents 14.6% of Warren Buffett’s portfolio. Overall, there were 72 hedge funds that held a total stake of $46.5 billion in the company in the third quarter of 2021.
The company’s profit increased 58% to $7.7 billion in the third quarter, indicating that the bank’s borrowing business is beginning to recover from a pandemic lows. Total revenue at the end of the September quarter grew 12% year over year to $22.8 billion and beat revenue estimates by $1.16 billion.
On November 23, Piper Sandler analyst Jeffery Harte increased his price target for Bank of America Corporation (NYSE:BAC) to $53 from $50. According to Harte, BAC has demonstrated the ability to gain market share efficiently while generating higher risk-adjusted returns. The analyst kept an Overweight rating on the bank stock.
In its Bill Nygren third-quarter 2021 market commentary, Oakmark Funds mentioned Bank of America Corporation (NYSE:BAC) and discussed its stance on the firm. Here is what the fund said:
“Earlier this year, one of our holdings, Bank of America, announced that it was raising its minimum hourly wage from $15 to $20 and would increase it to $25 by 2025. The company received great press for placing the well-being of its employees above profits. But was it really either/or? Bank of America’s chief human resources officer spoke to the bigger picture: “A core tenet of responsible growth is our commitment to being a great place to work…that includes providing strong pay and competitive benefits to help them and their families so that we continue to attract and retain the best talent.” Bank of America understood that engaged, high-caliber employees are more productive, less prone to turnover and, therefore, less expensive in the long run. Increasing the pay for employees wasn’t elevating employees above shareholders; it was the right thing to do for employees and for shareholders.
If an increase to $20 was good, why stop there? Why not $50 per hour? Because the benefits the business receives a $50 don’t justify the expense. The bank would no longer be able to price its products competitively and would lose business. The employees would “win” in the short term, but eventually, the lost business would lead to job cuts, meaning both employees and shareholders would lose. The negative effects of stakeholder overreach are no different than when CEOs overreach to inflate short-term profits. Both hurt shareholders and stakeholders.”
1. Apple Inc. (NASDAQ:AAPL)
Percentage of Berkshire Hathaway’s 13F Portfolio: 42.77%
Berkshire Hathaway’s Stake Value: $125,529,681,000
Number of Hedge Fund Holders: 120
Warren Buffett’s fund began purchasing Apple Inc. (NASDAQ:AAPL) in late 2016. It owns about 887 million shares of the company worth $125 billion as of the end of the third quarter of 2021. The iPhone maker accounts for 42.77% of the fund, making it the most valuable position in Berkshire Hathaway’s portfolio.
Wedbush analyst Daniel Ives is optimistic about Apple Inc.’s (NASDAQ:AAPL) fiscal Q1 results. Ives believes that the tech giant could sell 40 million iPhones between Black Friday weekend and Christmas. The Wedbush analyst recently stated that there is a 60% to 65% chance that Apple will unveil its own autonomous vehicle by 2025. On November 26, Ives maintained an Outperform rating on the tech stock with a price target of $185.
In the quarter that ended in September, the California-based tech company’s revenue came in at $83.4 billion, up 29% year over year.
Despite a drop in the number of hedge funds holding Apple Inc. (NASDAQ:AAPL) in the third quarter, the stock remains one of the most valuable tech stocks among institutional investors. At the end of September, 120 of the 867 funds tracked by Insider Monkey had stakes in the company, compared to 138 the previous quarter.
You can also take a peek at the 10 Infrastructure Stocks to Buy Under $10 and Top 10 Stock Picks of Wen Han Li’s Andar Capital.
