Warren Buffett’s Top Stock Pick for 22 Straight Quarters

What is Elon really planning?

Sponsored

What the heck is Elon planning? Twitter has been an absolute dumpster fire… And we still don't have fully self-driving cars. …But did one man just finally connect the dots? He says “Elon's Endgame” has nothing to do with social media or even electric cars… And points three groundbreaking patents as proof.

Billionaire VC Chamath Palihapitiya agrees, saying… “This is no longer about cars… [This] is worth trillions of dollars.” Click here to get the details now before it's too late.


By The Motley Fool

There are a number of great money managers on Wall Street, but few, if any, can hold a candle to the “Oracle of Omaha,” Warren Buffett. Since Buffett became CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) in the mid-1960s, he's overseen a greater than 4,900,000% aggregate return in his company's Class A shares (BRK.A), and practically doubled up the annualized total return, including dividends, of the benchmark S&P 500.

Patient investors have become financially independent mirroring the Oracle of Omaha's investments. This can be done by analyzing Berkshire's quarterly Form 13F filings with the Securities and Exchange Commission. A 13F details what Wall Street's brightest minds purchased and sold in the most recent quarter.

But while Berkshire Hathaway's 13Fs have clued investors into a number of businesses Buffett appreciates, the Oracle of Omaha's favorite stock to buy — one which he's added to for 22 consecutive quarters — won't be found on his company's 13F.

Apple and Occidental Petroleum have been popular buys, but neither is Buffett's favorite stock

A quick glance at Berkshire's $361 billion portfolio would appear to suggest that tech stock Apple (NASDAQ: AAPL) is Warren Buffett's favorite business. After all, it accounted for 42.5% of invested assets as of the closing bell on March 6.

Innovation is a big reason Apple held the title of world's largest publicly traded company for so long (it only recently ceded this title to Microsoft). Since upgrading iPhone to handle 5G speeds in late 2020, the company's flagship smartphone has accounted for half or more of domestic smartphone market share. Even though Warren Buffett doesn't understand the mechanics of how an iPhone works, he fully understands consumer behavior and the exceptional loyalty of Apple's customers to its products.

But what investors may have overlooked is Apple's innovation beyond its physical products. CEO Tim Cook is overseeing an extended transformation that has Apple focused on various subscription services. Subscriptions should smooth out Apple's revenue recognition during iPhone upgrade cycles, steadily lift the company's operating margin over time, and encourage Apple's customers to stay within the company's ecosystem of products and services.

However, the best aspect of owning a lot of Apple stock for Warren Buffett might be its unbeatable capital-return program. Apple is returning $14.8 billion annually in dividends to its shareholders, and has repurchased in excess of $600 billion worth of its common stock since the start of 2013. Buffett is a huge fan of businesses that reward long-term-minded investors like himself.

The other stock in Berkshire's portfolio that you'd probably think is Warren Buffett's favorite to buy is energy juggernaut Occidental Petroleum (NYSE: OXY). Since the beginning of 2022, the Oracle of Omaha and his investment aides, Ted Weschler and Todd Combs, have purchased more than 248 million shares of Occidental — a position with a market value of $15.2 billion.

Although energy stocks haven't played a big role in Berkshire's portfolio throughout much of this century, the past couple of years have represented something of a change of heart for Buffett and his team. Piling into Occidental the way Berkshire's investment team has signals that they believe the spot price of crude oil will remain above historic norms, or perhaps head even higher.

While it's tough to predict the directional movements of energy commodities with any certainty, there are factors working in Buffett's favor. For instance, capital underinvestment for multiple years from energy majors during the COVID-19 pandemic has led to tight global oil supply. When the supply of an in-demand commodity is constrained, it's not uncommon for the price of that commodity to rise.

A higher spot price for crude oil would be noteworthy for two reasons for Occidental. First, it generates the lion's share of its revenue from its drilling operations. If the price of oil climbs, it disproportionately benefits, when compared to other integrated oil and gas operators.

Secondly, Occidental is still digging itself out of debt. The company is counting on a higher spot price to fuel the steady paydown of its remaining debt.

Meet the stock Warren Buffett has purchased for 22 consecutive quarters

Though it's abundantly clear that Apple and Occidental Petroleum are core holdings in the $361 billion portfolio Warren Buffett oversees at Berkshire Hathaway, neither stock has been purchased by the Oracle of Omaha for 22 consecutive quarters.

To find Warren Buffett's favorite stock, investors will want to peer beyond the company's 13Fs and take a closer look at Berkshire Hathaway's quarterly operating results. Contained within these operating results is a section on share repurchases. That's right — the stock Buffett genuinely can't stop buying is shares of his own company.

Share buybacks at Berkshire Hathaway took a big turn in mid-July 2018. Prior to this point, repurchases could only be undertaken if the company's shares traded at or below 120% of book value (i.e., no more than 20% above reported book value in the most recent quarter). Since Berkshire Hathaway's stock never retreated to or below this preset threshold, the company went years without any share repurchases.

Everything changed on July 17, 2018, which is when Berkshire's board reworked the covenants governing share repurchases to allow Warren Buffett and the late, great Charlie Munger to work their magic.

Under the new criteria, as long as Berkshire Hathaway has at least $30 billion in aggregate cash, cash equivalents, and U.S. Treasuries on its balance sheet, and both Buffett and Munger agreed that shares of their company were intrinsically cheap, buybacks could continue with no preset cap.

During the fourth quarter of 2023, Buffett oversaw the repurchase of 3,623 Class A shares and 660,585 Class B shares (BRK.B) of Berkshire stock at a total cost of almost $2.15 billion. Since the criteria for buybacks changed in July 2018, Buffett has bought back more than $74 billion worth of his company's stock, with repurchases occurring every single quarter.

The reason the Oracle of Omaha and his team spend such a small fortune on buybacks is because it's the easiest way to reward investors who share their long-term vision. Since Berkshire doesn't pay a dividend, regular buybacks are incrementally increasing the ownership stakes of existing shareholders.

Furthermore, buying back stock can lift earnings per share (EPS) for businesses with steady or growing net income. As Berkshire's outstanding share count shrinks over an extended period, EPS should increase. Ideally, this makes Berkshire Hathaway appear even cheaper to investors.

Regardless of how well or poorly the U.S. economy and stock market are performing, Warren Buffett buying back shares of his favorite stock, Berkshire Hathaway, is a virtual given.


New Super Conductor Could Unleash $11.5 Trillion Windfall

Sponsored

Do you see this tiny sheet in my hand?

It's stronger than steel… Lighter than paper… The best conductor of electricity on Earth… And it could potentially become 4-Times More Valuable Than Amazon, Google and Tesla… COMBINED. There's only one move investors should consider to get in on this burgeoning $11.5 Trillion dollar technology. See the full story here…

Get Access To Marc Chaikin's "Power Gauge Report"

Enter your email address to access all the details.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

The AI Stocks Every Investor Should Have On Their Radar

Enter your email address to access all the details.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Write This Stock Ticker Down Right Now

Enter your email and phone number below to see the stock name and ticker on the next page.



By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Write This Stock Ticker Down Right Now

Enter your email below to see the stock name and ticker on the next page.



By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Write This Stock Ticker Down Right Now

Enter your email below to see the stock name and ticker on the next page.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Write This Stock Ticker Down Right Now

Enter your email address to see the name and ticker on the next page.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

How to Collect "Amazon Royalty" Payouts Before the Deadline

Thanks to a little-known IRS loophole, regular Americans can collect up to $28,544 (or more) in payouts from what is called “Amazon’s secret royalty program”…
Enter your email address to access all the details.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Elon Musk's "Project Omega"

It could soon mint new millionaires, while plunging millions of unprepared Americans into poverty. Get the stocks at the center of it all.
Enter your email address to receive the names and ticker symbols.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

The #1 Trade For 2023

Elon Musk is set to reveal his secret “Project X” that could revolutionize a $23 Trillion industry, and potentially be 1,000x bigger than EV’s. 
This Backdoor play could hand early investors a windfall of gains.
Enter your email address to receive this company’s name and ticker symbol for free.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Every Investor Should Have This $3 AI Stock On Their Radar

Enter your email address to get access to all the details.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Project An-E

Breakthrough A.I. Just Predicted What the Stock Prices of Tesla, Nvidia, and Apple Will Be 30 Days from Now…
Enter your email address for immediate access.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

Elon Musk's "Project Omega"

It could soon mint new millionaires, while plunging millions of unprepared Americans into poverty. Get the stocks at the center of it all.
Enter your email address to receive the names and ticker symbols.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)

#1 A.I. Stock Currently Trading For $3

Gain immediate access to this revolutionary $3 A.I. stock that is set to disrupt a $15 Trillion Market soar 75X.
Enter your email address to receive the name and ticker symbol for free.


By submitting your email address, you give Profitable Lifestyles permission to deliver the report or research you’re requesting to your email inbox. As a bonus, you will also get a free subscription to one of our carefully selected marketing partners. To learn more about our partners, click here. You can unsubscribe at any time. (Privacy Policy)