Warren Buffett, the CEO of Berkshire Hathaway and the Oracle of Omaha is one of the most successful - if not the most successful - investors of all time. He is well-known as the proponent of value investing as he only invests in companies with strong fundamentals and high earnings potential. His net worth is over $100 billion and comes primarily from Berkshire Hathaway.
As of the end of the first quarter of 2021, Berkshire Hathaway's 13F holdings included 46 companies among which there are very high-profile stocks such as Apple Inc. (NASDAQ: AAPL), Bank of America Corporation (NYSE: BAC), The Coca-Cola Company (NYSE: KO), and General Motors Company (NYSE: GM).
Warren Buffett was extremely successful prior to the 90s when investing was easier. There are several other legendary investors who were extremely successful prior to the 90s but seem to lost their touch over the past decade. As information disseminated more freely and quicker, the easy profits in the stock market disappeared. Nevertheless Warren Buffett is still a much better investor than most hedge fund managers. One thing Buffett got right whereas most "hedge" fund managers got wrong is hedging. Buffett doesn't believe in consistently hedging his bets. The stock market tends to rise over long periods of time, so it is a much better strategy not to hedge in the short term. Ten years ago Berkshire's shares were changing hands at $73. Today, the same shares trade at $278. Investors who consistently stayed invested in Buffett's company nearly quadrupled their money. Unfortunately, S&P 500 ETF (SPY) investors performed slightly better than Mr. Buffett during the last 10 years. SPY was trading at an adjusted price of $100 ten years ago. Today, it is trading at $439. Warren Buffett underperformed the market by 58 percentage points in 10 years.
As you can see, investing in Berkshire Hathaway hasn't been a good idea over the last 10 years. However, our research has shown that there is a positive correlation between Warren Buffett's stock position sizes and returns. For example Warren Buffett's top 10 stock positions generated annual alpha of 1 percentage point between 1999 and 2017. That's not much, but still better than the zero alpha offered by passive index funds.
The success of Warren Buffett is an exception in the investing world that has been lagging for quite some time. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
15 Best Warren Buffett Stocks to Buy Now
15. AbbVie Inc. (NYSE: ABBV)
Number of Hedge Fund Holders: 72
AbbVie Inc. (NYSE: ABBV) is a drug manufacturer based in North Chicago, Illinois. It is ranked fifteenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 20.11% to investors over the course of the past year.
On April 30, AbbVie Inc. (NYSE: ABBV) posted earnings for the first quarter of 2021, reporting earnings per share of $2.95, beating estimates by $0.12. The revenue over the period was around $12.94 billion, up 50.08% year-over-year.
At the end of the first quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth around $5.92 billion in AbbVie Inc. (NYSE: ABBV). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in AbbVie Inc. (NYSE: ABBV) as of the end of the first quarter of 2021, worth close to $2.47 billion, comprising 0.91% of its total 13F portfolio.
On July 2, Daiwa gave an Outperform rating to AbbVie Inc. (NYSE: ABBV) with a $126 price target.
14. Chevron Corporation (NYSE: CVX)
Number of Hedge Fund Holders: 41
Chevron Corporation (NYSE: CVX) is an American multinational energy corporation, mainly active in the oil and natural gas industries. It is ranked fourteenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 9.22% to investors over the course of the past year.
On April 30, Chevron Corporation (NYSE: CVX) posted earnings for the first quarter of 2021, reporting earnings per share of $$0.90, missing estimates by $0.04. The revenue over the period was around $32.03 billion, up 1.68% year-over-year.
At the end of the first quarter of 2021, 41 hedge funds in the database of Insider Monkey held stakes worth around $4.87 billion in Chevron Corporation (NYSE: CVX). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in Chevron Corporation (NYSE: CVX) as of the end of the first quarter of 2021, worth close to $2.48 billion, comprising 0.91% of its total 13F portfolio.
On July 23, Piper Sandler increased its price target on Chevron Corporation (NYSE: CVX) to $137 from $125 while maintaining its Overweight rating and arguing that the crude oil market boosts the free cash flow expectations for the company.
In its Q1 2021 investor letter, Nelson Capital Management, an investment management firm, mentioned Chevron Corporation (NYSE: CVX). Here is what the firm had to say:
In the energy sector, we bought a position in Chevron (tkr: CVX). As interest rates have increased, we have witnessed a rotation out of growth and momentum stocks and into value stocks. We think this trend could continue, which would be advantageous for Chevron . Additionally, we anticipate an uptick in oil and gas demand as more people get vaccinated and air travel picks up . Higher oil prices coupled with increased demand should lead to better earnings results for Chevron, which will enable it to support (or perhaps grow) its Large 5% dividend.
13. VeriSign, Inc. (NASDAQ: VRSN)
Number of Hedge Fund Holders: 42
VeriSign, Inc. (NASDAQ: VRSN) is an American company operating a varied array of network infrastructure, including the authoritative domain name registries of the Internet's top-level domains, .com and .net. It is ranked thirteenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 12.25% to investors over the course of the past year.
On July 22, VeriSign, Inc. (NASDAQ: VRSN) posted earnings for the second quarter of 2021, reporting earnings per share of $1.31, missing estimates by $0.05. The revenue over the period was around $329 million, up 4.78% year-over-year.
At the end of the first quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $5.64 billion in VeriSign, Inc. (NASDAQ: VRSN). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in VeriSign, Inc. (NASDAQ: VRSN) as of the end of the first quarter of 2021, worth close to $2.55 billion, comprising 0.94% of its total 13F portfolio.
In the first quarter of 2021, William Von Mueffling's Cantillon Capital Management increased its stake in VeriSign, Inc. (NASDAQ: VRSN) by 23% to around $360 million, comprising 2.62% of its total 13F portfolio.
12. Charter Communications, Inc. (NASDAQ: CHTR)
Number of Hedge Fund Holders: 74
Charter Communications, Inc. (NASDAQ: CHTR) is an American telecommunication and mass media company. It is ranked twelfth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 27.23% to investors over the course of the past year.
On April 30, Charter Communications, Inc. (NASDAQ: CHTR) posted earnings for the first quarter of 2021, reporting earnings per share of $4.23, missing estimates by $0.19. The revenue over the period was around $12.52 billion, up 6.68% year-over-year.
At the end of the first quarter of 2021, 74 hedge funds in the database of Insider Monkey held stakes worth $16.40 billion in Charter Communications, Inc. (NASDAQ: CHTR). Out of the hedge funds being tracked by Insider Monkey, billionaire Chris Hohn's TCI Fund Management has the most valuable position in Charter Communications, Inc. (NASDAQ: CHTR) as of the end of the first quarter of 2021, worth close to $6.33 billion, comprising 18.36% of its total 13F portfolio.
On July 20, Morgan Stanley kept its Overweight rating on Charter Communications, Inc. (NASDAQ: CHTR) while boosting its price target to $800 from $750, expecting higher EBITDA growth.
In its Q1 2021 investor letter, ClearBridge Investments, an investment management firm, mentioned Charter Communications, Inc. (NASDAQ: CHTR). Here is what the firm had to say:
The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter trailed after generating robust returns earlier in the recovery.
11. The Bank of New York Mellon Corporation (NYSE: BK)
Number of Hedge Fund Holders: 49
The Bank of New York Mellon Corporation (NYSE: BK) is an investment services and management company. It is ranked eleventh on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 36.44% to investors over the course of the past year.
On July 15, The Bank of New York Mellon Corporation (NYSE: BK) posted earnings for the second quarter of 2021, reporting earnings per share of $1.13, beating estimates by $0.13. The revenue over the period was around $3.96 billion, down 1.25% year-over-year.
At the end of the first quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $4.77 billion in The Bank of New York Mellon Corporation (NYSE: BK), up from 47 the preceding quarter worth $4.69 billion.
On July 20, Argus upgraded its rating on The Bank of New York Mellon Corporation (NYSE: BK) to Buy from Hold and put a $55 price target, arguing that its revenue will become better with its high asset levels.
10. General Motors Company (NYSE: GM)
Number of Hedge Fund Holders: 86
General Motors Company (NYSE: GM) is an American multinational corporation, manufacturing and selling automobiles and automobile parts. It is ranked tenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 118.16% to investors over the course of the past year.
On May 5, General Motors Company (NYSE: GM) posted earnings for the first quarter of 2021, reporting earnings per share of $2.25, beating estimates by $1.20. The revenue over the period was around $32.47 billion, dowan 0.72% year-over-year.
At the end of the first quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $8.05 billion in General Motors Company (NYSE: GM), up from 70 the preceding quarter worth $6.33 billion.
9. DaVita Inc. (NYSE: DVA)
Number of Hedge Fund Holders: 34
DaVita Inc. (NYSE: DVA) is a medical care company providing kidney dialysis services. It is ranked ninth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 39.65% to investors over the course of the past year.
On April 29, DaVita Inc. (NYSE: DVA) posted earnings for the first quarter of 2021, reporting earnings per share of $2.09, beating estimates by $0.31. The revenue over the period was around $2.82 billion, down 0.75% year-over-year.
At the end of the first quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $4.40 billion in DaVita Inc. (NYSE: DVA), up from 32 the preceding quarter worth $4.81 billion.
On July 19, Deutsche Bank boosted its price target on DaVita Inc. (NYSE: DVA) to $207 from $150 and maintained its Buy rating, arguing that the company had a structural shift for the better.
8. U.S. Bancorp (NYSE: USB)
Number of Hedge Fund Holders: 43
U.S. Bancorp (NYSE: USB) is an American bank with a significant presence in retail banking with a high number of branches. It is ranked eighth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 56.28% to investors over the course of the past year.
On July 15, U.S. Bancorp (NYSE: USB) posted earnings for the second quarter of 2021, reporting earnings per share of $1.28, beating estimates by $0.15. The revenue over the period was around $5.76 billion, down 1.00% year-over-year.
At the end of the first quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $8.34 billion in U.S. Bancorp (NYSE: USB). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in U.S. Bancorp (NYSE: USB) as of the end of the first quarter of 2021, worth close to $7.17 billion, comprising 2.65% of its total 13F portfolio.
7. Moody's Corporation (NYSE: MCO)
Number of Hedge Fund Holders: 55
Moody's Corporation (NYSE: MCO) is an American financial services company, offering credit ratings as well as providing financial analysis services. It is ranked seventh on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 30.29% to investors over the course of the past year.
On April 28, Moody's Corporation (NYSE: MCO) posted earnings for the first quarter of 2021, reporting earnings per share of $4.06, beating estimates by $1.26. The revenue over the period was around $1.60 billion, up 24.03% year-over-year.
At the end of the first quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $13.73 billion in Moody's Corporation (NYSE: MCO). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in Moody's Corporation (NYSE: MCO) as of the end of the first quarter of 2021, worth close to $7.37 billion, comprising 2.72% of its total 13F portfolio.
On July 7, Raymond James kept its Outperform rating on Moody's Corporation (NYSE: MCO) with a price target increase to $394 from $341, forecasting an increase in its ratings revenue.
6. Verizon Communications Inc. (NYSE: VZ)
Number of Hedge Fund Holders: 69
Verizon Communications Inc. (NYSE: VZ) is an American telecommunication company. It is ranked sixth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 0.20% to investors over the course of the past year.
On July 21, Verizon Communications Inc. (NYSE: VZ) posted earnings for the second quarter of 2021, reporting earnings per share of $1.37, beating estimates by $0.07. The revenue over the period was around $33.76 billion, up 10.89% year-over-year.
At the end of the first quarter of 2021, 69 hedge funds in the database of Insider Monkey held stakes worth $11.38 billion in Verizon Communications Inc. (NYSE: VZ), up from 67 the preceding quarter worth $10.50 billion.
In the first quarter of 2021, Warren Buffett's Berkshire Hathaway increased its stake in Verizon Communications Inc. (NYSE: VZ) by 9% to around $9.24 billion, comprising 3.41% of its total 13F portfolio and having the most valuable position in Verizon Communications Inc. (NYSE: VZ).
5. The Kraft Heinz Company (NASDAQ: KHC)
Number of Hedge Fund Holders: 33
The Kraft Heinz Company (NASDAQ: KHC) is a food and beverage company. It is ranked fifth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 14.02% to investors over the course of the past year.
On April 29, The Kraft Heinz Company (NASDAQ: KHC) posted earnings for the first quarter of 2021, reporting earnings per share of $0.72, beating estimates by $0.13. The revenue over the period was around $6.39 billion, up 3.85% year-over-year.
At the end of the first quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $13.33 billion in The Kraft Heinz Company (NASDAQ: KHC). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in The Kraft Heinz Company (NASDAQ: KHC) as of the end of the first quarter of 2021, worth close to $13.03 billion, comprising 4.81% of its total 13F portfolio.
In the first quarter of 2021, Billionaire Ray Dalio’s Bridgewater Associates increased its stake in The Kraft Heinz Company (NASDAQ: KHC) by 10% to $55.56 million, comprising 0.48% of its total 13F portfolio.
4. The Coca-Cola Company (NYSE: KO)
Number of Hedge Fund Holders: 61
The Coca-Cola Company (NYSE: KO) is an American beverage company, manufacturing and selling nonalcoholic beverages. It is ranked fourth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 19.81% to investors over the course of the past year.
On July 21, The Coca-Cola Company (NYSE: KO) posted earnings for the second quarter of 2021, reporting earnings per share of $0.68, beating estimates by $0.12. The revenue over the period was around $10.13 billion, up 41.61% year-over-year.
At the end of the first quarter of 2021, 61 hedge funds in the database of Insider Monkey held stakes worth $24.90 billion in The Coca-Cola Company (NYSE: KO). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in The Coca-Cola Company (NYSE: KO) as of the end of the first quarter of 2021, worth close to $21.08 billion, comprising 7.79% of its total 13F portfolio.
On July 22, Truist kept its Buy rating on The Coca-Cola Company (NYSE: KO) while boosting its price target to $65 from $60, noting that the company will further benefit from the reopening.
3. American Express Company (NYSE: AXP)
Number of Hedge Fund Holders: 53
American Express Company (NYSE: AXP) is an American financial services company, known primarily as the provider of AmEx credit and charge cards. It is ranked third on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 79.08% to investors over the course of the past year.
On April 23, American Express Company (NYSE: AXP) posted earnings for the first quarter of 2021, reporting earnings per share of $2.74, beating estimates by $1.12. The revenue over the period was around $9.06 billion, down 12.09% year-over-year.
At the end of the first quarter of 2021, 53 hedge funds in the database of Insider Monkey held stakes worth $24.48 billion in American Express Company (NYSE: AXP). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in American Express Company (NYSE: AXP) as of the end of the first quarter of 2021, worth close to $21.44 billion, comprising 7.92% of its total 13F portfolio.
On July 12, Wells Fargo kept its Outperform rating on American Express Company (NYSE: AXP) while increasing its price target to $200 from $185, arguing that card companies will continue to benefit from the reopening of the economy.
In its Q2 2021 investor letter, ClearBridge Investments, an investment management firm, mentioned American Express Company (NYSE: AXP). Here is what the firm had to say:
In financials, American Express has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.
2. Bank of America Corporation (NYSE: BAC)
Number of Hedge Fund Holders: 97
Bank of America Corporation (NYSE: BAC) is an American multinational bank – one of the Big Four banks in the United States. Its operations span from retail banking to wealth management. It is ranked second on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 57.49% to investors over the course of the past year.
On July 14, Bank of America Corporation (NYSE: BAC) posted earnings for the second quarter of 2021, reporting earnings per share of $1.03, beating estimates by $0.27. The revenue over the period was around $21.47 billion, down 4.40% year-over-year.
At the end of the first quarter of 2021, 97 hedge funds in the database of Insider Monkey held stakes worth $45.32 billion in Bank of America Corporation (NYSE: BAC). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in Bank of America Corporation (NYSE: BAC) as of the end of the first quarter of 2021, worth close to $39.08 billion, comprising 14.45% of its total 13F portfolio.
In its Q1 2021 investor letter, ClearBridge Investments, an investment management firm, mentioned Bank of America Corporation (NYSE: BAC). Here is what the firm had to say:
Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.
1. Apple Inc. (NASDAQ: AAPL)
Apple Inc. (NASDAQ: AAPL) is a multinational tech company manufacturing well-known iPhone smartphones as well as providing online services and software. It is ranked first on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 49.90% to investors over the course of the past year.
On April 28, Apple Inc. (NASDAQ: AAPL) posted earnings for the first quarter of 2021, reporting earnings per share of $1.40, beating estimates by $0.41. The revenue over the period was around $89.58 billion, up 53.63% year-over-year.
At the end of the first quarter of 2021, 127 hedge funds in the database of Insider Monkey held stakes worth $130.91 billion in Apple Inc. (NASDAQ: AAPL). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in Apple Inc. (NASDAQ: AAPL) as of the end of the first quarter of 2021, worth close to $108.36 billion, comprising 40.07% of its total 13F portfolio.
On July 22, Canaccord kept its Buy rating on Apple Inc. (NASDAQ: AAPL) while increasing its price target to $175 from $165, noting that Apple Inc. (NASDAQ: AAPL) will keep benefiting from the 5G development.
