Warren Buffett, the legendary investor, bought 10 stocks in 2024 for Berkshire Hathaway’s portfolio. While all of these stocks have potential, one stands out as the best pick for 2025: Sirius XM. Sirius XM had a challenging year in 2024, with its shares plummeting by 58%.
However, this significant drop has made the stock attractively priced, with a forward-earnings multiple of only 6.4. Additionally, Sirius XM offers a compelling yield of 5.15%, higher than any of the other nine stocks Buffett purchased. Although Wall Street analysts are divided on Sirius XM’s prospects, with only three out of 14 analysts surveyed by LSEG in January rating the stock as a “buy” or “strong buy,” the average 12-month price target indicates a nearly 22% upside potential.
Buffett’s Sirius XM optimism
While other stocks in Buffett’s portfolio, such as Occidental Petroleum, may outperform over the long term, Sirius XM’s chances for a rebound in 2025 appear promising. The company’s merger with Liberty Media SiriusXM Holdings in September 2024 could also contribute to its growth and success in the coming year. Buffett’s investment strategy has always focused on identifying undervalued stocks with strong fundamentals and growth potential.
His decision to invest in Sirius XM suggests that he sees the company as a worthwhile addition to Berkshire Hathaway’s portfolio. As investors look for opportunities to beat the market in 2025, following Buffett’s lead and considering Sirius XM could prove to be a wise decision. With its attractive valuation, high yield, and growth potential, Sirius XM may emerge as a hidden gem in Buffett’s portfolio and a top performer in the coming year.
