Warren Buffett’s Berkshire Takes Stake In Constellation Brands

Berkshire Hathaway’s Q4 2024 Portfolio Update: Insights into Warren Buffett’s Investment Moves

Introduction: Berkshire Hathaway and Warren Buffett’s Investment Approach

Warren Buffett, often referred to as the "Oracle of Omaha," is one of the most successful investors in history. As the Chairman of Berkshire Hathaway, he has built a financial empire by adhering to a disciplined value investing strategy. Berkshire Hathaway, which Buffett transformed from a struggling textile company into a multinational conglomerate, follows an investment approach rooted in the principles of Benjamin Graham. Buffett’s strategy emphasizes acquiring high-quality companies at discounts to their intrinsic value and holding them for the long term. His portfolio decisions are closely watched by investors worldwide, as they often signal potential opportunities in the market. Berkshire’s latest portfolio update for the fourth quarter of 2024 offers a glimpse into Buffett’s recent investment moves, revealing new positions, increased stakes, and divestitures.

New Additions to Berkshire’s Portfolio

One of the most notable changes in Berkshire Hathaway’s portfolio during the fourth quarter was the addition of Constellation Brands Inc., a leading producer and distributor of alcoholic beverages. Berkshire purchased 5,624,324 shares of the company, valued at $1.24 billion, representing 0.47% of its total portfolio. This move aligns with Buffett’s preference for businesses with strong fundamentals and favorable long-term prospects. Constellation Brands, known for its portfolio of popular beer, wine, and spirits brands, has demonstrated resilience and growth in recent years. Berkshire’s investment in the company reflects its confidence in the consumer staples sector and the potential for long-term returns.

Key Position Increases in Berkshire’s Portfolio

In addition to the new position in Constellation Brands, Berkshire Hathaway also increased its stakes in several existing holdings during the quarter. One of the most significant increases was in Domino’s Pizza Inc., where Berkshire added 1,104,744 shares, bringing its total holding to 2,382,000 shares. This adjustment represents an 86.49% increase in the number of shares and a 0.17% impact on the portfolio’s overall value, with the Domino’s position now worth approximately $999.9 million. Buffett’s firm also increased its stake in Occidental Petroleum Corp. by 8,896,890 shares, bringing the total to 264,178,414 shares. This adjustment represents a 3.49% increase in share count and a total value of $13.05 billion, making it one of Berkshire’s largest holdings.

Sold-Out Holdings: Berkshire’s Q4 Exits

Berkshire Hathaway also made several divestitures during the fourth quarter. The company completely exited three positions, including the sale of all 39,400 shares of the SPDR S&P 500 ETF Trust and all 43,000 shares of the Vanguard S&P 500 ETF. These exits reflect Buffett’s disciplined approach to investing, as he is known to sell or reduce positions when they no longer align with his investment criteria or when better opportunities arise. Although Berkshire’s exits from these ETFs may seem counterintuitive given the broader market’s performance, they are consistent with the company’s focus on individual stock selection and long-term value.

Key Position Reductions: Adjusting Holdings

Berkshire Hathaway reduced its stakes in several companies during the fourth quarter, including significant cuts to its holdings in Bank of America Corp. and Citigroup Inc. Berkshire sold 117,449,720 shares of Bank of America, resulting in a 14.72% decrease in its share count and a 1.75% impact on the portfolio’s overall value. The stock traded at an average price of $44.07 during the quarter and has returned 2.90% over the past three months and 6.87% year-to-date. Additionally, Berkshire trimmed its Citigroup Inc. position by 40,605,295 shares, representing a 73.5% reduction in shares and a 0.96% impact on the portfolio. The stock traded at an average price of $67.49 during the quarter and has returned 24.85% over the past three months and 20.88% year-to-date.

Portfolio Overview: A Snapshot of Berkshire’s Holdings

As of the fourth quarter of 2024, Berkshire Hathaway’s portfolio consisted of 39 stocks, with a diverse range of industries represented. The company’s top holdings include Apple Inc. (28.12% of the portfolio), American Express Co. (16.84%), Bank of America Corp. (11.19%), Coca-Cola Co. (9.32%), and Chevron Corp. (6.43%). These holdings reflect Buffett’s preference for market-leading companies with strong financials and competitive advantages. Berkshire’s portfolio is primarily concentrated in eight industries, including Financial Services, Technology, Consumer Defensive, Energy, Communication Services, Healthcare, Consumer Cyclical, and Industrials. This diversification across industries allows Berkshire to mitigate risk while capitalizing on growth opportunities.

Investment Insights and Takeaways

Berkshire Hathaway’s Q4 2024 portfolio update provides valuable insights into Warren Buffett’s investment strategy and market outlook. The addition of Constellation Brands highlights Buffett’s confidence in the consumer staples sector, while increases in Domino’s Pizza and Occidental Petroleum demonstrate his willingness to double down on companies with strong growth prospects. Meanwhile, the reduction of stakes in Bank of America and Citigroup, as well as the complete exit from certain ETFs, underscores his disciplined approach to portfolio management. Buffett’s focus on acquiring high-quality companies at attractive valuations remains a cornerstone of his investment philosophy. For investors, Berkshire’s portfolio serves as a valuable resource for identifying potential investment opportunities and understanding the importance of a long-term, value-driven approach.