Warren Buffett continues to invest in stocks despite his warning to Wall Street about high market valuations. Buffett, the CEO of Berkshire Hathaway, has made significant investments in four notable companies. Buffett increased Berkshire’s stake in Sirius XM Holdings to 108.7 million shares, around 32.1% of the company’s outstanding shares.
He values Sirius XM’s substantial moat in the satellite-radio industry and its subscription-based revenue model. The company’s attractive valuation and yield also appeal to Buffett. Berkshire has also been heavily investing in Occidental Petroleum, building its position to almost 255.3 million shares since 2022.
This investment likely reflects expectations of elevated or rising crude oil prices due to factors like underinvestment in global energy exploration and geopolitical tensions. Chubb, a diversified property and casualty insurer, has caught Buffett’s attention as well. Berkshire bought over 27 million shares of Chubb between July 2023 and June 2024.
The insurance industry’s ability to thrive regardless of economic conditions and the benefits of high interest rates for insurers like Chubb make it an attractive investment. Finally, Buffett has been repurchasing shares of Berkshire Hathaway. Since changes in buyback rules in 2018, Berkshire has repurchased almost $78 billion worth of its shares.
This strategy boosts long-term shareholder value and makes the stock more attractive to fundamentally focused investors.
Buffett’s enduring investment choices
Buffett’s investments reflect a focus on long-term value and strategic positioning across diverse industries.
By continuing to buy substantial stakes in these companies, Buffett underscores his belief in their potential for substantial returns. Coca-Cola and Apple are two stocks that Buffett has held for a long time and considers “forever” investments. Berkshire Hathaway first bought shares of Coca-Cola in the late 1980s and has held onto them ever since, benefiting from the company’s dedication to dividend growth.
Coca-Cola’s strong free cash flow and steady earnings growth make it a great stock to buy and hold for passive income potential. Buffett shocked the market this year by selling shares of Apple, his biggest holding. However, the sales were likely linked to locking in gains rather than a change of heart about the company.
Apple remains Buffett’s biggest holding in terms of value and offers characteristics he appreciates, such as market leadership and a long track record of earnings growth. The company’s large installed base of active devices and growing services revenue make it a great stock to hold for the long haul. Chubb, a property and casualty insurance company, is another stock that Buffett has invested in heavily.
While its business may not seem exciting, Chubb’s business model closely resembles that of Berkshire Hathaway. The company collects premiums and invests the float, generating consistent underwriting profits. Chubb’s stock may appeal to conservative investors seeking steady growth or those looking for exposure to a potential emerging conglomerate.
