Warren Buffett is undeniably the most closely watched, highest-profile investor in modern history. After all, no one boasts a superior track record of outperforming the S&P 500 Index than he. Not surprisingly, investors relentlessly clamor to match his success by analyzing his portfolio, hoping to absorb even a tiny morsel of Buffett's investment genius.
Despite his unparalleled success, Buffett's investment model has always been transparent, straightforward, and consistent. Fundamentally, he invests in fairly-priced, high-dividend paying blue-chip companies that feature strong balance sheets. Buffett buys such stocks with the intent to hang onto them over the long haul. The following five companies exemplify the types of investments housed within Buffett's holding company, Berkshire Hathaway.
- Warren Buffett's investment strategy is to build a portfolio of blue-chip companies with strong balance sheets, holding investments over a long time.
- The top five investments in Buffett's holding company, Berkshire Hathaway, are Apple, Bank of America, Coca-Cola, American Express, and Kraft Heinz.
- Apple is Berkshire Hathaway's largest portfolio holding, comprising 49.1% of the portfolio.
- Buffett has held shares of Coca-Cola since the late 1980s; the company accounts for about 8.6% of Berkshire Hathaway's portfolio.
- In 2011, Buffett began investing in Bank of America when Berkshire Hathaway purchased in a private offering 50,000 shares of the company's preferred stock at a liquidation value of $100,000 per share.
Comprising 49.1% of the Berkshire Hathaway portfolio, Apple Inc. (AAPL) represents Buffett's largest holding. Berkshire Hathaway owns approximately one billion shares in the tech giant, worth $109.3 billion at the time of this reporting. Apple surpassed Wells Fargo to capture the #1 spot in 2018 after Berkshire Hathaway purchased additional shares of the Steve Jobs-founded company in February of that year.
Bank of America
With 1.03 billion shares to his name, Buffett's second-largest holding is in Bank of America Corporation (BAC), valued at $24.1 billion and comprising 10.8% of his portfolio as of Aug. 4, 2020. Buffett's interest in this company began in 2011 when he helped solidify the firm's finances following the 2008 economic collapse.
Through a private offering worth $5 billion, Berkshire Hathaway agreed to buy 50,000 shares of Bank of America's preferred stock with a liquidation value of $100,000 per share. Investing in Bank of America, which is the nation's second-largest bank by assets, falls in line with Buffett's attraction to financial stocks, including Wells Fargo & Company and American Express (see below).
The Coca-Cola Company
Buffett once claimed to consume at least five cans of Coca-Cola per day, which may explain why the Coca-Cola Company (KO) stock is his third-largest holding. But one thing is for certain: Buffett appreciates the durability of the company’s core product, which has remained virtually unchanged over time, with the exception of the ill-fated "New Coke" formula rebranding in the mid-1980s. This makes sense, given that Buffett started buying Coca-Cola shares in the late 1980s following the stock market crash of 1987. As of Sept. 23. 2020, with 400 million shares, valued at approximately $19.2 billion, Coca-Cola accounts for 8.6% of the Berkshire Hathaway portfolio.
American Express (AXP) is the second financial services company to make Buffett's top five list, occupying 6.5% of the portfolio. Berkshire Hathaway holds 151.6 million shares, valued at $14.4 billion as of Sept. 23, 2020. Buffett acquired his initial stake in the credit card company in 1963 when it sorely needed capital to expand its operations. Buffett has since been a savior to the company, many times over, including during the 2008 financial crisis.
On Feb. 14, 2013, Berkshire Hathaway and 3G Capital announced a $28 billion deal to acquire global food brand H.J. Heinz Company. Two years later, the company merged with Kraft to become the Kraft Heinz Company (KHZ). In the years following the merger, the company has seen some rocky times, with share prices plummeting from a high of $96.65 in Feb. 2017 to $19.99 in March 2020.
Despite this, Buffett still seems to maintain faith in the company, holding 325.6 million shares of Kraft Heinz at an approximate value of $9.4 billion as of Sept. 23, 2020. This is enough to rank Kraft Heinz as number five in our list of Buffett holdings, occupying 4.2% of the portfolio.