Warren Buffett’s Top Holdings See Mixed Performances In 2022

Summary

• Chevron
  CVX
  posted the largest gain for the year among the five stocks.
• After a strong performance last year, Apple
  AAPL
  underperformed.

With the end of another interesting and memorable year in sight, investors are looking at their portfolios to determine how they performed in 2022.

As rampant inflation, rising interest rates and geopolitical conflicts created uncertainty around the world, it is unsurprising that many may have seen their top stocks underperform the benchmark indexes. Investing legend Warren Buffett (Trades, Portfolio) is no exception. While Berkshire Hathaway
BRK.B
(BRK.A, Financial)(BRK.B, Financial) has managed to find value in this volatile environment with the recent purchases of Occidental Petroleum
OXY
Corp. (OXY, Financial) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial), as well as increased positions in several other companies, a couple of its largest holdings have still underperformed the S&P 500 Index year to date. The benchmark index has declined around 20% as of Dec. 19.

According to 13F filings, the guru’s $296.10 billionequity portfolio consisted of 49 stocks as of Sept. 30. A majority of the portfolio was invested in technology stocks at 45.16%, while the financial services sector has a weight of 24.01% and the energy space represents 12.05%.

As of the end of the third quarter, filings show Buffett’s five largest holdings, accounting for over half of the equity portfolio, were Apple Inc. (AAPL, Financial), Bank of America
BAC
Corp. (BAC, Financial), Chevron Corp. (CVX
CVX
, Financial), Coca-Cola
KO
Co. (KO, Financial) and American Express
AXP
Co. (AXP, Financial).

Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.

Apple

Representing 41.76% of the equity portfolio, Apple (AAPL, Financial) is Buffett’s largest holding. GuruFocus estimates he has gained 246.02% on the investment since establishing it in the first quarter of 2016.

Declining 27.68%, the Cupertino, California-based company has underperformed the S&P 500 by a slim margin this year.

The well-known electronics manufacturer, whose products include the iPhone, Mac and iPad, has a $2.10 trillion market cap; its shares were trading around $131.63 on Monday with a price-earnings ratio of 21.56, a price-book ratio of 41.42 and a price-sales ratio of 5.47.

The GF Value Line
VALU
suggests the stock is modestly undervalued currently based on historical ratios, past financial performance and analysts’ future earnings projections.

Further, the GF Score of 98 out of 100 indicates the company has high outperformance potential, driven by high ratings for growth, profitability, GF Value and momentum and a moderate financial strength rank.

Of the gurus invested in Apple, Buffett has the largest stake with 5.62% of its outstanding shares. Ken Fisher (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Tom Gayner (Trades, Portfolio) and Elfun Trusts (Trades, Portfolio) also have significant positions in the stock.

Bank of America

Accounting for 10.30% of the equity portfolio, Bank of America (BAC, Financial) is the Oracle of Omaha’s second-largest holding. GuruFocus says he has gained approximately 24.46% on the investment since the third quarter of 2017.

With a return of -30.71%, the bank, which is headquartered in Charlotte, North Carolina, has slightly underperformed the benchmark this year.

The bank has a market cap of $256.76 billion; its shares were trading around $32.01 on Monday with a price-earnings ratio of 10.13, a price-book ratio of 1.07 and a price-sales ratio of 2.84.

According to the GF Value Line, the stock is modestly undervalued currently.

The GF Score of 74 suggests the company is likely to have average performance going forward on the back of high ratings for momentum and GF Value, middling marks for profitability and growth and a low financial strength rank.

With 12.59% of Bank of America’s outstanding shares, Buffett is by far its largest guru shareholder. Other top guru investors include Dodge & Cox, Primecap, Fisher, Diamond Hill Capital (Trades, Portfolio), Li Lu (Trades, Portfolio) and Bill Nygren (Trades, Portfolio).

Chevron

Occupying 8.02% of the equity portfolio, Chevron (CVX, Financial) is the guru’s third-largest stake. GuruFocus data shows Buffett has gained an estimated 27.31% on the investment over its lifetime.

Returning around 42.91% for the year, the San Ramon, California-based energy company outperformed the benchmark index by a wide margin.

The oil and gas producer has a $328.85 billion market cap; its shares were trading around $170.43 on Monday with a price-earnings ratio of 9.67, a price-book ratio of 2.07 and a price-sales ratio of 1.44.

Based on the GF Value Line, the stock appears to be modestly undervalued.

The GF Score of 79 suggests the company is likely to have average performance going forward. While its ratings for financial strength and GF Value were high, the other three ranks were more moderate.

Buffett is once again the company’s largest guru shareholder with an 8.55% stake. Fisher and Simons’ firm also have large holdings.

Coca-Cola

With a weight of 7.57%, Coca-Cola (KO, Financial) is the fourth-largest position in Buffett’s equity portfolio. GuruFocus data shows he has gained approximately 196.08% on the long-held investment.

Posting a year-to-date return of 6.39%, the soft drinks manufacturer headquartered in Atlanta has outperformed the S&P 500.

The well-known beverage company, whose products include Coke, Sprite, Fanta, Powerade, Fairlife and Dasani, has a market cap of $272.60 billion; its shares were trading around $63.04 on Monday with a price-earnings ratio of 27.53, a price-book ratio of 11.96 and a price-sales ratio of 6.47.

The GF Value Line suggests the stock is fairly valued currently.

The GF Score of 81 indicates the company has good outperformance potential due to high ratings for profitability and momentum and middling marks for the other three criteria.

Of the gurus invested in Coca-Cola, Buffett has the largest stake with 9.25% of its outstanding shares. The stock is also being held by Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Simons’ firm, Grantham and Yacktman Asset Management (Trades, Portfolio), among others.

American Express

Coming in at number five, American Express (AXP, Financial) represents 6.91% of Buffett’s equity portfolio. According to GuruFocus, he has gained an estimated 861.55% on the investment.

With a return of around -13.84%, the New York-based financial services company has slightly outperformed the S&P 500 in 2022.

The credit card company has a $107.95 billion market cap; its shares were trading around $144.47 on Monday with a price-earnings ratio of 14.52, a price-book ratio of 4.51 and a price-sales ratio of 2.16.

According to the GF Value Line, the stock is modestly undervalued currently.

The GF Score of 85 means the company has good outperformance potential with high ratings for momentum and growth and middling marks for financial strength, GF Value and profitability.

As with all his other top holdings, Buffett is American Express’ largest guru shareholder with a 20.29% stake. Fisher, Dodge & Cox, First Eagle Investment (Trades, Portfolio), Simons’ firm and Grantham, among others, also have large exposures to the stock.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.