Analysing Warren Buffett's Top 5 Stock Holdings

Armaan Chawla
Jul 24, 2019   •  9 views

Hailed as one of the greatest investors to have ever lived, Warren Buffett constantly seems to outperform the S & P 500 and keeps on producing outstanding results. Naturally investors are curious as to how the mind of “The Oracle of Omaha” functions and having a look at his largest stock holdings might give some sharp investors a clue.

1)Apple (NASDAQ: AAPL)

Apple has always been one of the major positions in Berkshire Hathaway’s holdings. Ever since 2016, Buffett had made sure to add to his stock of Apple and the share price has only risen in compensation. One of the theories as to why Buffett may favour Apple is because of the Economic Moat that surrounds it, specifically with regards to the subscription service and consumer retention. Having always favoured companies which possess a competitive advantage, there is no surprise in seeing the company have such a high position. The company also has a very strong balance sheet and has promising room to grow with higher speed network connectivity and further innovation.

2) Bank of America (NYSE: BAC)

Berkshire Hathaway seems to be very interested in the banking industry with a majority of his top ten holdings being held by banking stocks. Buffett claims that he will be holding Bank of America for a very long time and that he has a lot of faith in the company to grow. While not possessing any immediately apparent Economic Moat, Bank of America has delivered a strong and stable performance over the last few years, growing at an earnings rate of 40% and a revenue rate of 1%.

3) Wells Fargo (NYSE: WFC)

Similar to Bank of America, Wells Fargo has showed promising returns, backed by strong financial statements. Buffett has however been loosening his holding on the stock, so the future is unclear for Wells Fargo.

4) Coca Cola (NYSE:KO)

One of Berkshire Hathaway’s most iconic holdings, there is no surprise to seeing Coca Cola maintaining a place in the highest holdings consistently. Buffett himself claims to drink 5 cans a day. Having invested in the company back in 1980, Buffet still backs it to this day. Having a Moat as a monopoly in the beverage industry and solid cashflows, this has been one of Buffett’s most successful investments.

5) Kraft Heinz

Heinz recently made new movements in order to cater more to the younger generation, promising healthier and less fat alternatives to their iconic sauce. This is going to secure new customers as well as help the company grow to new heights.