He may no longer be Berkshire Hathaway‘s CEO and resident stock-picker. There’s no denying, however, that Warren Buffett’s fingerprints are still all over the conglomerate’s current portfolio.
If you wanted to poach a pick or two from the Oracle of Omaha’s selections, there’s still time. In fact, here’s a couple that you might want to consider buying first — and one you arguably won’t want to.
Image source: The Motley Fool.
Buy: American Express
Apple is still Berkshire’s single-biggest stock holding. Through a combination of growth and attrition, though, credit card outfit American Express (AXP 2.05%) is now the organization’s second-biggest trade at just over $47 billion.
Today’s Change
(-2.05%) $-6.29
Current Price
$300.92
Key Data Points
Market Cap
$207B
Day’s Range
$294.52 – $302.94
52wk Range
$220.43 – $387.49
Volume
236K
Avg Vol
3.4M
Gross Margin
60.65%
Dividend Yield
1.09%
Anyone keeping tabs on this ticker likely knows it’s peeled back nearly 20% from December’s record high, largely on worries that economic malaise is dragging down consumer spending, and even crimping their ability to repay their loans. For perspective, the New York Federal Reserve reports U.S. household debt now stands at a record-breaking $18.8 trillion, with delinquencies on this debt at a near-decade high of 4.8%. It doesn’t bode well for a lender like Amex.
American Express may be better shielded from this trouble than you might think, however. As it serves more than its fair share of affluent borrowers, it’s holding up in the midst of this headwind. Indeed, Amex cardholders’ luxury spending grew 15% year over year during the fourth quarter, nearly doubling the 8% growth it saw in total billed business. This stock’s 20% pullback may be all the discount you’re going to get.
Buy: Constellation Brands
So far, the position that Berkshire Hathaway first established in beer maker Constellation Brands (STZ 0.46%) back in late 2024 hasn’t paid off. Shares of the company behind Corona and Modelo are down since then. In fact, Gallup reports that the proportion of people living in the United States who regularly consume alcohol now stands at a multidecade low of 54%.
Today’s Change
(-0.46%) $-0.67
Current Price
$146.63
Key Data Points
Market Cap
$25B
Day’s Range
$145.51 – $148.69
52wk Range
$126.45 – $196.91
Volume
53K
Avg Vol
2.6M
Gross Margin
51.17%
Dividend Yield
2.79%
This stock’s sustained weakness, however, ignores a couple of important details about the booze business in general, and about Constellation in particular.
Broadly speaking, although the decision to cut back on alcohol consumption is rooted in a combination of cost and health, this is a highly cyclical business. The demand that’s subdued now will be rekindled again sooner or later, perhaps when consumers are feeling more financially confident again.
In the meantime, the company has been going through a self-imposed overhaul, like last year’s decision to divest some of its lower-priced wine brands that are more distracting than beneficial. Incoming CEO Nicholas Fink should also provide some fresh perspective regarding the direction that Constellation Brands needs to take next.
Avoid: DaVita
Not every pick that Buffett’s been patient with is necessarily a great addition to your portfolio, however. Take kidney dialysis outfit DaVita (DVA +0.55%) as an example. When Berkshire Hathaway first bought into it back in 2011, business was good because demand was strong, and insurers were reasonable regarding reimbursement.
Much of that has changed for the worse in the meantime, though. Despite modest 5% year-over-year revenue growth through the first three quarters of fiscal 2025, net income is down 17%. It’s a microcosm of the bigger-picture challenge the entire healthcare industry is facing these days.
This might convince you: After (mostly) leaving it alone for over a decade, Berkshire began steadily scaling out of this holding early last year. New CEO Greg Abel has already picked up where Buffett left off.
