Few can argue with the track record of the world's richest man. And even if his latest year wasn't his best, Warren Buffet's market moves should be of at least passing interest to investors of every variety.
Here are four companies that the "Oracle of Omaha" bought for his Berkshire Hathaway (NYSE:BRK.A) portfolio within the latest reporting period. Does timing matter to Buffett? Count on it. (To learn more about Buffett, see Warren Buffett: The Road To Riches.)
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One Stock Buffett Already Owns
The first position highlighted is a stock that Buffett already owns: Wells Fargo & Company (NYSE:WFC). Since its acquisition of Wachovia last year, Wells has grown to be worth $131 billion in market cap. Along the way, like so many other banks, it forfeited its dividend, which currently pays an annual 0.71%. The current P/E on the stock is a not-so-impressive 32.98.
Buffett recently added over 10 million shares to his already mammoth 300 million share holding.
Three New Horses in the Berkshire Stable
In this last reporting period, Buffett also took an opening position in oil and gas megalith Exxon Mobil Corporation (NYSE:XOM) to the tune of $87 million. XOM shares currently trade with an annual yield of 2.24% and have a P/E of 17.61. Buffett likes stocks that generate lots of cash, and XOM fits the bill perfectly. The company reported nearly $43 billion in free cash flow this quarter, putting it at the top of U.S.-based stocks in terms of that particular metric.
Another new addition to the Berkshire stable is Republic Services, Inc. (NYSE:RSG), a waste management conglomerate with operations in 40 states. RSG stock will pay Mr. Buffett and his shareholders a 2.70% annual dividend while trading with a trailing multiple of 42.89x last year's earnings. Buffett opened with a purchase of $96 million worth of common stock.
Another Financial Giant
Nearly a third of Buffett's holdings are in financial services stocks, and he recently fortified his holdings in the sector with an opening purchase in former Dow component, The Travelers Companies, Inc. (NYSE:TRV). The purchase was very modest (by Berkshire Hathaway standards), totaling a mere $1.3 million. Indeed, one wonders what exactly the investing sage's endgame is in owning the shares.
TRV trades with a P/E of 9.77 and offers a dividend yield of 2.51%.
Warren Buffett's recent purchases reveal an ongoing affinity with financial services and a sturdy faith in the fate of equities in general. It behooves all value investors to keep abreast of the thinking - and the actions - of the world's wealthiest individual. (Find out more about the Oracle in Warren Buffett: How He Does It.)
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