You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long, dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing. – Warren Buffett in “Supermoney” (1972)
Berkshire Hathaway’s (BRK/A, BRK/B) fourth-quarter 13F was filed after the market closed on May 15. This regulatory filing gives us a quarterly opportunity to observe what Warren Buffett and his investment team of Todd Combs and Ted Weschler are doing within Berkshire’s publicly traded equity portfolio. Berkshire has a large stable of wholly-owned entities, but this report provides us with the details of the U.S. publicly traded stock portion of their investments. Berkshire’s first-quarter earnings report, which contains information about the extensive portfolio of wholly-owned operating companies, was released on Saturday, May 3. The annual meeting was held on the same day, with further discussion about Berkshire Hathaway’s operations and the momentous announcement of Buffett’s retirement as CEO at the end of the year.
Berkshire Hathaway’s Top Ten Holdings
Berkshire’s $258.7 billion investment portfolio consists of 36 companies, down two from last quarter. Berkshire was a net seller of publicly traded stocks during the quarter. The top five holdings, in order of the size of holding, are Apple (AAPL), American Express (AXP), Coca-Cola (KO), Bank of America (BAC), and Chevron (CVX). The top 5 holdings account for almost 71% of the total portfolio, down from 76% in the first quarter of 2024. The investment portfolio remains very concentrated, with 89% of assets in the top ten holdings.
Berkshire Hathaway’s Portfolio By Sector
Before the 2024 sales, Apple stock comprised over 50% of its publicly traded portfolio, but it remains the most significant holding at around 26%. The Berkshire portfolio was overweight technology due to its massive Apple stake, but the selling in 2024 has taken technology to a slight underweight. Berkshire Hathaway had no change in the Apple (AAPL) position for the first quarter.
Despite the elimination of Citigroup (C) and Nu Holdings (NU) and the trimming of Bank of America (BAC) and Capital One Financial (COF), the financial sector is the most significant overweight in the portfolio at almost 40% of assets. Due to its top five holdings, plus Occidental Petroleum (OXY) and Kraft Heinz (KHC), the portfolio remains considerably overweight in consumer staples and energy relative to the S&P 500. Berkshire controls almost 27% of the outstanding shares in Occidental, which, combined with Chevron, leads to a significant energy sector overweight. A deeper analysis of the probable reasons behind the Occidental purchase can be found here. Berkshire has only one small holding in the industrial sector and no real estate companies or utilities. However, Berkshire’s wholly-owned entities include a large railroad, Burlington Northern Santa Fe (BNSF), and multiple regulated utilities and pipelines via Berkshire Hathaway Energy (BHE).
Because the 13F does not include international stocks, Berkshire Hathaway initially announced the acquisition of about 5% of five Japanese trading companies at the end of August 2020. These holdings are Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd., and Sumitomo Corp. According to regulatory filings in March 2025, Berkshire now has 8.5% to 9.8% ownership in these trading companies. In Buffett’s 2024 annual letter, he noted that all five companies had agreed to relax the previously agreed-upon 10% ownership ceiling. At the recent annual meeting, Buffett said he “won’t give a thought” to selling them and expects Berkshire to own them for fifty years or more.
Portfolio Changes
Berkshire added a new secret holding. It requested and received confidential treatment for “one or more holding(s)” from the Securities and Exchange Commission (SEC). Typically, this means Buffett or another investment professional is attempting to continue to add to the holding, and disclosure would likely drive the price higher. It is likely one new stock since the value is estimated at $1 to $2 billion when comparing the 13F filing with earlier first-quarter earnings disclosures via the 10Q filing.
Berkshire added to its positions in Constellation Brands (STZ), Domino’s Pizza (DPZ), Pool Corporation (POOL), Occidental Petroleum (OXY), Verisign (VRSN), Sirius XM Holdings (SIRI), and Heico-A (HEI/A).
Within financials, Berkshire jettisoned its Citigroup (C) and NU Holdings (NU) positions, while continuing to trim its Capital One Financial (COF) and Bank of America (BAC) shares. Warren Buffett is regarded as one of the greatest bank stock investors ever. Hence, the continued reduction in exposure to the banking sector is notable, but almost 40% of the stock portfolio remains in financial companies.
Berkshire also reduced its positions in T-Mobile (TMUS), Charter Communications (CHTR), Liberty Media—Formula One (FWONK), and Davita (DVA). Notably, the Davita sales were related to a 2024 agreement in which Davita will buy back shares quarterly from Berkshire when its stake rises above 45%.
Portfolio Valuation Metrics
This analysis looks at the Berkshire portfolio across a host of measures, including 12-month forward estimated: price-to-earnings (P/E), price-to-sales (P/S), return-on-equity (ROE), enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), price-to-book (P/B), dividend yield, current debt-to-EBITDA, current free cash flow yield, current operating margin, and long-term earnings-per-share growth consensus estimates.
Overall, the Berkshire portfolio analysis reflects a cheaper price-to-earnings valuation than the S&P 500 while having superior returns on capital as measured by return on equity with similar debt levels. The long-term (next 3 to 5 years) consensus earnings-per-share growth rate is expected to be lower than the S&P 500. Buffett’s preference for high-quality companies that generate significant cash flows is evident from the superior return on equity combined with an exceptional free cash flow yield.
Summary
Berkshire was a net seller of stocks in its portfolio for the tenth quarter in a row, with relatively modest net sales of $1.5 billion in publicly traded stocks. Driven by earnings and continued stock sales, Berkshire has amassed a record cash level on an absolute basis and relative to the company’s size. Buffett and company have been unable to find enough attractive acquisition targets in his circle of competence and at a valuation he is willing to pay. At the annual meeting, Buffett said that Berkshire “holds a lot more cash and Treasury bills than I would like.” He always looks for investments, but “things don’t come along in an orderly fashion.”
Disclosure: Glenview Trust holds Berkshire Hathaway (BRK/A, BRK/B) and other stocks mentioned in this article within its recommended investment strategies. I am a long-time Berkshire Hathaway shareholder and worked for Salomon Brothers when Warren Buffett became Chairman and CEO.
Read the full article here
