Buffet Purchases Ten Stocks in 2024; Top Pick Emerges as Victorious Asset for 2025.
Buffet's Stock Picks in 2024: A Closer Look
Buffet, the legendary investor, dipped his toes back into the stock market in 2024 despite being a net seller for eight consecutive quarters. He bought a total of 10 stocks, some old favorites and a few new additions, for Berkshire Hathaway's portfolio.
Top Picks of the Year
Many of Buffet's 2024 purchases were not just new investments but also additions to existing positions. For instance, he bought more shares of property and casualty insurer, Chubb, in 2024 after starting to amass them in 2023. Similarly, he increased Berkshire's stake in Occidental Petroleum in the first and second quarters of 2024, as well as in December and January of the same year.
Buffet also took a liking to Liberty Media last year. He scooped up more shares of Liberty Media SiriusXM Holdings' class A and class C shares, and Sirius XM itself. Some fresh faces joined the lineup in 2024, including aerospace and electronics company, Heico, and cosmetics retail chain operator, Ulta Beauty.
Evaluating the Contenders
Not all of Buffet's 2024 purchases made it to the final round, though. Liberty Media SiriusXM Holdings merged with Sirius XM in September, leaving Sirius XM as the sole candidate.
Valuation is a significant concern for another stock Buffet bought last year. Heico's shares trade at nearly 53 times forward earnings, a premium even for a rapidly growing company. Domino's Pizza and Chubb emerged as the top performers in 2024 among the ten stocks Buffet bought. Chubb, however, faces potential losses in 2025 due to the recent Los Angeles wildfires.
Buffet expressed his belief in Occidental's long-term potential, despite the uncertainty surrounding the oil and gas sector. He also showed renewed interest in Verisign, purchasing additional shares at the end of 2024. However, the growth prospects for Verisign in 2025 are not as promising as some other stocks on the list.
The Pick of the Bunch for 2025
Sirius XM, despite its dismal performance in 2024, is Buffet's top pick for 2025. The stock's current forward-earnings multiple of only 6.4 is an attractive proposition for income investors. Sirius XM's forward dividend yield of 5.15% is higher than any of the other nine stocks, making it an attractive choice for those seeking income.
However, Sirius XM faces competition and declining revenue, which could sabotage its growth in 2025. The analyst community is split on its prospects, with some recommending a "buy" or a "strong buy," and others labeling it an "underperform" or a "sell." Yet, the average 12-month price target for Sirius XM suggests an upside potential of almost 22%, indicating that there's still some optimism in the market.
In conclusion, Buffet's 2024 picks reflect his strategy of identifying undervalued stocks. While some of these stocks may face challenges, their attractive valuations make them worth considering for investors seeking potentially high returns.
After analyzing Buffet's 2024 stock purchases, it's clear that his focus was on both established and new investments. He further invested in Occidental Petroleum and increased Berkshire's stake, demonstrating his belief in their long-term potential, despite challenges in the oil and gas sector. Moreover, Buffet allocated some finance towards Heico and Ulta Beauty, showing an interest in diversifying Berkshire Hathaway's portfolio by investing in various industries, including aerospace and cosmetics.
