Warren Buffett is undoubtedly one of the greatest investors of all time.
The Berkshire Hathaway (NYSE:BRK-B) CEO has one of the best long-term investing track records and seen as a guru among many in the investing community.
This stellar track record means many investors follow Buffett’s buying activity closely. As a steadfast buy-and-hold advocate, his recent moves raise interest. Though he’s trimmed holdings in sectors facing challenges, his remaining holdings reveal where the Oracle of Omaha wants to be positioned right now.
Certainly, independent research is essential. Relying on a single individual or source is unwise. Still, Buffett’s extensive experience counts. As far as his current portfolio holdings are concerned, here are three stocks I think are worth consideration as long-term picks, particularly if any material declines are seen moving forward.
Apple (NASDAQ:AAPL) stock is a staple in many hedge funds due to its strong, consistent growth, high margins, and loyal customer base. Its closed-loop ecosystem further solidifies its position as a safe, long-term investment.
Predicting Apple’s stock direction is challenging, yet investors have historically benefited, unlike short sellers. After earnings, AAPL’s decline results from overly high expectations. Despite claims, Apple’s iPhone sales only dropped 2.4%, considering inflation. Additionally, its $81.8 billion revenue was down just 1% and matched Wall Street’s estimate.
In Q3 2023, Apple’s revenue dipped by 1.4%, and MacBook sales fell by 7%. However, services revenue surged by 8% to $21.2 billion sequentially. That’s the most important factor that concerns most long-term investors, as Apple continues to transition from a mainly hardware maker to a services company.
Given the company continues to move in the right direction (with a solid balance sheet), Apple remains a top defensive option in the world of mega-cap tech worth buying now.
Occidental Petroleum (OXY)
Buffett continues to increase his investment in Occidental Petroleum (NYSE:OXY), owning almost 25% of the company’s stock, valued at around $12 billion. His optimism in Occidental’s future, including its transition to sustainable energy, warrants attention. This move could also yield short-term gains due to volatile oil markets affected by production disputes among major countries.
It’s important to highlight that Occidental is among the energy players showing strong growth and profitability. Its diversification also shouldn’t be overlooked, with divisions like OxyChem contributing in a big way to the company’s record earnings before interest and tax (EBIT) of $2.5 billion in 2022. If these diversified operational segments can continue to outperform, Occidental may become a different discussion among many investors.
Buffett expresses optimism about Occidental’s future, praising its leadership’s strategic vision earlier this year. He reassures investors of the company’s potential and competent management during a May shareholder meeting. With OXY stock trading around the $61 level, and at a price-earnings ratio of around 10-times, this is a stock worth loading up on right now, in my view.
Bank of America (BAC)
Amid uncertainties in the banking sector, Buffett has scaled back on bank stocks like Bank of New York Mellon (NYSE:BK) and U.S. Bancorp (NYSE:USB), but he maintained his holdings in Bank of America (NYSE:BAC).
Despite caution, he endorsed Bank of America at a shareholder meeting, highlighting his confidence in its management. His stake is valued at over $32 billion, around 13% of the company, reflecting his trust in the bank’s strength and market position.
The company’s Q2 results showcased robust operations and a strong balance sheet. Bank of America gained $7.4 billion post-tax, representing 21% year-over-year earnings per share growth. Earnings excelled across segments, with the company’s consumer segment seeing its 18th positive new account quarter, adding 157,000 customers. Impressively, the lender’s Global Wealth division added 12,000 new relationships.
Bank of America exceeded expectations in both earnings per share and revenue, driven by rising interest rates on loans. Despite slowing loan growth, its resilience and long-term potential are notable.
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