In Q4 of last year, Warren Buffett added to or initiated positions in several companies. While the Oracle of Omaha didn’t make any massive purchasing moves, the buying he did around the margins may give some insights into what he and his team are thinking about the investment landscape today.
Let’s look at the six stocks Buffett bought recently and why they make sense in the broader context of the Berkshire portfolio.
Occidental Petroleum
Perhaps the least surprising of Buffett’s recent buys has been the acquisition of additional shares in Occidental Petroleum (NYSE:OXY).
Berkshire purchased nearly 9 million shares in December, followed by an additional 763,000 shares in early February. This brought the number of shares of OXY in the Berkshire portfolio up to about 265 million. At present prices, this position is worth around $12.7 billion and accounts for almost 5% of Berkshire’s investment portfolio.
There are many reasons for Buffett’s continued investment in Occidental. To begin with, the company has a prime position in the Permian Basin, giving it reliable cash flows from an extremely stable source of oil production.
The stock also continues to trade at a P/E of under 20 while producing a dividend of 1.9%. As a result, it offers a good combination of income for Berkshire and value as an investment.
Buffett has also expressed his view that oil won’t give way to alternative energy sources overnight, making investments in oil majors like OXY a good long-term bet for his company.
Domino’s Pizza
Buffett has always been a proponent of investing in consumer-facing companies with strong brand moats. It was likely this preference that led Berkshire Hathaway to take a $1.1 billion stake in restaurant chain Domino’s Pizza (NASDAQ:DPZ) last year.
Buffett initially bought the stock in Q3 but expanded the position by nearly doubling it in Q4. Today. Berkshire Hathaway owns about 2.4 million shares of DPZ.
As of 2024, Domino’s accounted for about one in four pizzas delivered in the United States. The company has also spent the last several years building up its base of stores while its closest competitors, primarily Papa John’s and Pizza Hut, spent much of that time closing stores.
This has left Domino’s in an extremely strong competitive position, and it’s likely that the company’s momentum could make it a good long-term holding for Berkshire.
Constellation Brands
Next on Buffett’s radar was a new position in beverage company Constellation Brands (NYSE:STZ).
Late in 2024, Buffett purchased about $5.6 million shares of the company. While Buffett has looked at various brewers and beverage makers over the years, the Constellation position is a rare investment in the alcohol industry for him.
Berkshire took a tiny stake in Diageo in 2023, though at under $25 million the stock represents a minuscule piece of the overall portfolio and was likely bought by one of Buffett’s investing proteges rather than Buffett himself.
Constellation is a case in which Buffett is likely paying a premium for a great long-term business. The stock trades at over 45x its earnings today, though it does also offer a fairly high dividend yield of 2.3%.
The company, however, has demonstrated solid growth over many years and has built up a diversified brand portfolio that spans the alcoholic beverage landscape. Constellation owns popular beer brands Modelo and Corona, wine labels that include Meiomi and The Prisoner and a small but growing portfolio of premium spirits brands.
Pool Corp.
Pool Corp (NASDAQ:POOL) followed a similar trend to Domino’s, with Berkshire opening a position in the stock in Q3 before expanding it in Q4. In total, Berkshire has acquired just under 600,000 shares of POOL with a current value of $192 million.
The size of the POOL holdings, however, again may suggest that either Ted Weschler or Todd Combs made the investment in the company instead of Buffett personally.
With that said, Pool Corp has many of the characteristics that would likely appeal to the Oracle of Omaha himself. It has a nearly 80% share in the swimming pool supplies market, with only Leslie’s Inc. as a meaningful competitor.
Pool Corp. also offers very strong returns on invested capital and equity at 18.4% and 32.0 percent, respectively. With good returns and a practically unassailable moat within its industry, Pool looks like a classic Buffett stock, even if he may not have added it to the Berkshire portfolio himself.
VeriSign
One of Buffett’s few tech holdings, VeriSign (NASDAQ:VRSN) was among the stocks Berkshire increased its holdings of in Q4. The company, which maintains two of the internet’s 13 Root Servers and is the registrar for .com domain names, has been part of the Berkshire portfolio for over a decade.
Prior to a series of buys in December, though, Buffett hadn’t added to his stake in VRSN since 2020. Counting the purchases made in December, Berkshire now owns 13.3 million shares of the company with a value of over $3 billion.
In addition to being tied to the basic functioning of the internet, VeriSign operates as an effective government-backed monopoly. In many ways, VeriSign functions like a public utility under government regulation.
Beyond this iron-clad moat, the company also boasts an incredibly high net margin of over 50%. Taken together, these factors make VeriSign the kind of very safe and profitable company Buffett tends to like most.
SiriusXM
Last but certainly not least on the list of stocks Buffett has bought recently is SiriusXM (NASDAQ:SIRI). Between December and January, Berkshire Hathaway added 7 million more shares of the company to its position, bringing the total to 120 million shares. At current prices, the value of Berkshire’s SiriusXM holdings is about $2.8 billion.
SiriusXM first entered the Berkshire portfolio last year during what at first looked like a short-term merger arbitrage opportunity. That assumption, however, has since been disproven by Buffett’s aggressive buying activity in SIRI shares.
Berkshire now owns more than 35% of the internet radio company, and it’s not yet clear if Buffett is done buying or not. What is clear, though, is that Buffett and his team see significant value in SiriusXM’s dominance of the internet radio market.
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.
