Warren Buffett’s Berkshire Hathaway recently invested $2.6 billion in six different stocks.
The new additions to the company’s portfolio include Occidental Petroleum, Sirius XM, VeriSign, Louisiana-Pacific Corporation, Domino’s Pizza, and Constellation Brands. Among these acquisitions, Constellation Brands stands out as a particularly attractive option for investors.
The company, known as the largest brewer of Mexican beer, owns leading brands such as Corona and Modelo. Despite challenges faced by the alcohol industry, Constellation has managed to grow its beer sales steadily.
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Constellation Brands forecasts a sales growth of 4% to 7% for fiscal 2025, primarily driven by its beer business, which accounts for over 80% of its sales and operating income.
The company’s strategy of positioning its beer brands as premium options helps maintain pricing power and market dominance.
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While Constellation’s wine and spirits sales have declined and recent tariffs against Mexico have raised concerns, the core beer business remains robust.
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The stock is currently trading at a relatively low price-to-earnings ratio of 12.4 times forward earnings estimates, making it an appealing choice for investors who recognize the long-term competitive advantages of Constellation’s beer business. Berkshire Hathaway also increased its stakes in Pool Corporation and Domino’s Pizza during the fourth quarter. Pool Corp, the leader in distributing commercial and residential pool products, is experiencing a slowdown but remains profitable and maintains its top position in the industry.
Domino’s Pizza benefits from a strong brand and a franchise model that keeps capital investment at a minimum level while allowing the company to reap benefits from growing sales. For investors looking to allocate $2,000 based on Warren Buffett’s investment choices, Amazon and American Express present solid long-term opportunities. Amazon’s e-commerce business has historically performed well during economic downturns, and its cloud-computing arm, AWS, is poised for continued growth.
American Express recently reported strong 2024 results and is positioned for further growth, with management forecasting a 9% revenue increase and a 14% to 15% boost in earnings per share in 2025. In uncertain economic times, following Warren Buffett’s investment choices can provide a sense of security. The stocks recently added to Berkshire Hathaway’s portfolio, particularly Constellation Brands, offer compelling value for investors seeking long-term growth potential.
Image Credits: Photo by Sasun Bughdaryan on Unsplash
