In this article, we discuss Warren Buffett’s top 5 stock picks. If you want to read our comprehensive analysis of Warren Buffett’s history, investment philosophy, and hedge fund performance, go directly to Warren Buffett’s Four Giants, Latest Investor Letter and Top 10 Stock Picks.
5. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 39
In Kraft Heinz, Berkshire has an $11.7 billion stake with over 325.63 million shares. The food company is yet another dividend-paying stock in Buffett’s portfolio. Kraft Heinz (NASDAQ:KHC) recently declared a quarterly dividend of $0.40 per share quarterly dividend, in line with previous. The forward dividend yield is 4.6%. Kraft Heinz Company (NASDAQ:KHC) is a decent stock pick in times of inflation as the company enjoys the power to mitigate costs via pricing. The company beat fourth-quarter results and posted organic revenue growth of 3.9%.
Hedge funds are also showing an increased interest in the company. A total of 39 funds in the database of Insider Monkey had stakes in Kraft Heinz at the end of the fourth quarter, up from 33 in the third quarter.
4. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Berkshire Hathaway owns 400 million shares of Coca-Cola as of the end of the fourth quarter of 2021. These shares had a worth of $23.7 billion. Cocoa Cola is a dividend aristocrat, having increased its dividend consistently for the last 50 years. That’s why hedge funds love it. The stock also features on our list of the best dividend stock picks of billionaire Paul Tudor Jones.
Our data of 924 hedge funds show that hedge funds started loading up on Coca-Cola as inflationary pressures increased. 70 funds in our database had stakes in the company at the end of the fourth quarter, compared to 61 funds a quarter earlier.
3. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 64
American Express accounts for about 7.4% of Berkshire Hathaway’s total Q4 portfolio. The fund has a stake worth about $25 billion in the credit card services company. Bank of America Securities analyst Mihir Bhatia in late January upgraded American Express (NYSE:AXP) to Buy from Neutral. The rating action came after American Express increased its long-term guidance to 10%+ revenue growth and mid-teens EPS growth.
A total of 64 hedge funds in our database had long positions in American Express as of the end of the fourth quarter, as compared to 57 funds in the previous quarter.
2. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 84
Bank of America is the second-biggest stake of Berkshire Hathaway as of the fourth quarter of 2021. Warren Buffett first bought over 690 million shares of the bank in the third quarter of 2017. The billionaire has since added to his stake, ending 2021 with over 1 billion shares of the company. The total worth of these shares at that time was about $45 billion. Bank of America is a dividend-paying company and has become a favorite of hedge funds, especially when the Fed is expected to hike rates. The stock features on our list of dividend stock picks of Bill Miller’s hedge fund.
Bank of America saw a huge rise in positive hedge fund sentiment in the fourth quarter. 84 funds in our database had stakes in the company at the end of the quarter, as compared to 72 funds in the third quarter.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Accounting for about 48% of Berkshire’s 13F portfolio, Apple is the biggest stake and indeed a “giant” in Berkshire’s business. The hedge fund has a $157 billion stake in the company. Warren Buffett added Apple to Berkshire’s portfolio for the first time in 2016 with about 39 million shares. At the end of 2021, the fund owned over 887 million shares of the company. Over the last five years, Apple stock has gained about 366%.
Alger, an investment management firm, published its “Alger Spectra Fund” fourth quarter 2021 investor letter and mentioned Apple Inc. (NASDAQ:AAPL). Here‘s what the fund said:
“Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives tight engagement with consumers and enterprises, fostering the growing purchases of high-margin services like music, apps and Apple Pay. Apple’s quarterly earnings exceeded street estimates on strong margin realization driven by a sales mix of more profitable services. The margin strength was even more impressive given significantly higher freight costs and supply constraints that prevented approximately $6 billion in revenue realization.”
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