Let’s be honest – if you’re reading this, you might be wishing you had Warren Buffett’s wealth.
The Oracle of Omaha has long been the gold standard for investment advice, and following his lead means understanding top stocks that Berkshire Hathaway owns.
Buffett is beloved for showing the path to substantial financial returns, and it’s only natural to be curious how he’s weathering the turbulent 20s.
If you want to follow Berkshire Hathaway’s chairman out of this unprecedented economic turmoil, here are the top investments the company has made.
1. Coca Cola Co (KO)
Coke is one of the most recognizable brands on the planet, and its beverage distribution system encompasses brands like vitaminwater, Powerade, Minute Maid, Simply, Gold Peak, and more.
Of course, it didn’t survive the COVID-19 lockdowns by just selling sugar water. In fact, the company worked hard to pivot its revenue streams from closed stadiums, theaters, and other live venues into its supermarkets and ecommerce channels.
Despite its brand recognition, Coke isn’t resting on its laurels. It’s also reinforcing its supply chain to ensure it remains agile and competitive moving forward.
It’s still growing and finding ways to launch new products to fit modern dietary needs and even latching onto marketing trends like its smart Star Wars bottles. This is how Coke offered steady dividends for the past 58 years.
2. Apple (AAPL)
Even a global pandemic hasn’t stopped Apple, as the technology giant quickly rebounded back into range of its historic trillion-dollar empire.
The company has massive market share in mobile technology, accounting for nearly half the U.S. smartphone market and over a fifth of the global market.
It also has strong ecommerce revenues that were enough to weather the storm when its retail stores were closed.
The world filled with fear, uncertainty, and doubt in the wake of the viral quarantine, but its capital return delivered over $450 billion to shareholders since 2012.
While other companies brace for major losses, Apple is driving revenue growth by growing its wearables and services. This makes it a strong investment, so long as you can buy in at a reasonable price.
3. Costco (COST)
Costco’s club members are loyal for a reason – from the free samples to bulk items, Kirkland brand goods, and employees with great benefits, it has everything.
When the global coronavirus pandemic hit, consumers stocked up on bulk goods through panic shopping. This, combined with the company’s annual membership revenue, made it a strong-performing investment in the first half of 2020.
The membership bulk discount model and strong branding brought it nearly 100 million paying members by the end of 2019.
Costco removed its limit of guests per cardholder for the summer 2020 to help further expand revenues. It has a large real estate footprint, gas stations, and enough reasons for shoppers to keep coming back.
Many analysts believe Costco will continue driving returns to investors.
4. JPMorgan Chase (JPM)
Perhaps the most “villainized” sector, banks are a necessary evil that make the world go round.
Of course, Occupy wasn’t able to hammer the banking industry as much as the 2020 novel coronavirus pandemic did.
JPMorgan Chase is just one of many banks who faced a tough time as businesses closed, workers were unemployed, and consumer spending plummeted. On top of this, the lending industry will surely face issues with defaults.
Some analysts believe the company is undervalued, making it a strong contender to squeeze profits in the aftermath of the lockdowns.
Most, however, feel banks are a risky bet because of high risk of default for the foreseeable future.
5. Amazon.com (AMZN)
Amazon is a modern-day behemoth, digging its many revenue tentacles into markets like ecommerce, cloud computing, digital streaming, and artificial intelligence.
Its massive physical and digital distribution networks became the backbone of the U.S. coronavirus response, as we rushed toward at-home work, delivery, and streaming services.
The company has over 150 million Amazon Prime members and it’s still finding room to grow.
The company is not only competing on seemingly every front, it’s winning. It’s almost unfair to compare other companies to Amazon, and founder Jeff Bezos is on track to become the world’s first trillionaire.
Other stocks may outperform it in the short or even long-term, but it’s almost guaranteed to remain an operational business long after we’re all dead. Amazon is an established enterprise with a lasting legacy.
6. VeriSign (VRSN)
Verisign is one of the foundational companies at the root of the worldwide web. That means, like Amazon, it has a lot to gain from widespread internet usage.
Even before the push for virtual work, VeriSign was reporting 150% profit returns on the back of net margin increases and stronger infrastructure generating more revenue.
It also cut marketing and R&D to successfully manage its expenditures and become leaner in the face of a global epidemic.
Despite the internet’s expansion into other domain names, the .com and .net domains VeriSign has exclusive rights to through the Internet Corporation for Assigned Names and Numbers (ICANN) still hold a 44% market share.
It can also increase prices up to 7% each year through November 2024, according to its new agreement.
7. Procter & Gamble Co (PG)
When it comes to panic shopping, few companies understand more about how consumers reacted than P&G. Its first post-coronavirus earnings call outlined exactly how we panic bought.
As stay-at-home orders spread, consumers across Europe and North America stocked up on everything from dish and laundry detergents to OTC medications like Vicks, Metamucil, and Pepto Bismol. What’s more, the company’s supply chain never broke.
This put P&G in an ideal position to continue profiting during the lockdown on consumer staples. It also figured out where consumer spending is shifting fundamentally to stay on top of its own brand offerings.
These are just a few of the many stocks owned by Berkshire Hathaway. If you really want to outperform the Oracle of Omaha, dive into Warren Buffett’s stock portfolio here.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.