Warren Buffett’s 2023 Portfolio: Top 15 Stock Picks

In this article, we discuss the top 15 stock picks from Warren Buffett’s latest portfolio. You can skip our discussion on Buffett’s recent investment decisions and go directly to Warren Buffett’s 2023 Portfolio: Top 5 Stock Picks.

Berkshire Hathaway Inc. (NYSE:BRK-B) has been able to generate an average annualized return of 20% in the last 58 years under the ownership of Warren Buffett. This has contributed towards the 92-year-old becoming the fifth richest person in the world as of May 2023, with a net worth of $114.8 billion. Buffett has secured the fifth position despite making significant donations worth around $48 billion to leading charities like Bill and Melinda Gates Foundation and Susan Thompson Buffett Foundation. In the last six decades, Buffett has generated a return that is twice as high as the benchmark S&P 500 Index’s return over the same timeframe. If we incorporate the impact of compounding into the equation, the S&P 500 Index has gained 24,708% since 1965. Meanwhile, Berkshire Hathaway has generated a return of 3,784,464%, which is 153 times higher than the benchmark index.

Furthermore, the billionaire has been able to outperform the broader market in 39 out of the last 58 years. The astute investment strategy of the veteran can be gauged by the fact that he is expected to make $5.7 billion in cash during 2023 from the dividend-paying stocks in his portfolio. Some of the notable dividend-paying stocks in Buffett’s portfolio are Bank of America Corporation (NYSE:BAC), Apple Inc. (NASDAQ:AAPL), the Coca-Cola Company (NYSE:KO), and the Kraft Heinz Company (NASDAQ:KHC). Buffett has been a long-term proponent of dividend paying stocks.

During Q1 2023, the value of Berkshire Hathaway’s 13F portfolio increased by $26 billion to $325 billion. According to the filings, Buffett disposed of his entire stake worth $1.4 billion in The Bank of New York Mellon Corporation (NYSE:BK) and U.S. Bancorp (NYSE:USB) during the latest quarter. These transactions represent the continued reduction of longstanding bank investments by the billionaire. Berkshire Hathaway’s positions in US banks significantly decreased between 2020 and 2022. Some of the sales were carried out shortly before the turmoil in the banking system began in March. At the annual shareholders meeting this month, Buffett revealed that he is maintaining a cautious stance on holding bank stocks. However, Bank of America Corporation (NYSE:BAC) continues to be an exception, forming a significant part of the billionaire’s portfolio. Buffett increased his investments in several other financial stocks. He initiated a position worth $954 million in Capital One Financial Corporation (NYSE:COF) and boosted its stake in Ally Financial Inc. (NYSE:ALLY) by $10.6 million. The Chairman and CEO of Berkshire Hathaway owned 46 individual stocks as of Q1 2023.

 

Our Methodology

We picked the top 15 stocks from the Q1 2023 portfolio of Warren Buffett’s Berkshire Hathaway. These 15 stocks represent over 94% of Berkshire Hathaway’s portfolio. The stocks have been ranked in ascending order of the hedge fund’s stake in them during Q1 2023. We have also included the number of hedge fund holders for each company as of Q4 2022.

15. Paramount Global (NASDAQ:PARA)

Number of Hedge Fund Holders: 38

Warren Buffett’s Berkshire Hathaway’s Holdings: $2,091,138,052

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 0.64%

Paramount Global (NASDAQ:PARA) is a New York-based mass media and entertainment conglomerate that is competing against streaming giants like Netflix, Inc. (NASDAQ:NFLX) and the Walt Disney Company (NYSE:DIS). Warren Buffett first acquired a stake in Paramount Global (NASDAQ:PARA) in Q1 2022 at an average quarterly share price of $33.89. The hedge fund has consistently increased its stake in the company in the last four quarters. Paramount Global (NASDAQ:PARA) offers an annual forward dividend yield of 1.33% as of May 18.

Matrix Asset Advisors shared its stance on Paramount Global (NASDAQ:PARA) in its Q1 2023 investor letter. Here’s what the firm said:

“We sold our position in Kimberly-Clark to fund better investment opportunities and our holding in Paramount Global (NASDAQ:PARA) over our concerns about the level of the dividend during a peak spending year for the company as it invests in its streaming business, which is showing strong growth. We believe that Paramount Global will be successful as an independent company or acquired by someone else for its valuable assets and media franchise. We continue to own the stock in our LCV portfolios for its meaningful appreciation potential but concluded that at this time it was not an appropriate holding for our Dividend strategy.”

14. The Kroger Co. (NYSE:KR)

Number of Hedge Fund Holders: 42

Warren Buffett’s Berkshire Hathaway’s Holdings: $2,468,499,999

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 0.75%

The Kroger Co. (NYSE:KR) is a Cincinnati, Ohio-based operator of supermarket chains across the US. The company intends to complete its $24.6 billion merger with Boise, Idaho-based Albertsons Companies, Inc. (NYSE:ACI) in the near future. Both these companies have a cumulative sum of nearly 5,000 stores spread across 48 states. The merger is expected to create an entity that could compete against retail giants like Walmart Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN). Both entities intend to offload 250 to 300 stores to address anti-trust concerns.

Here’s what Oakmark Funds said about The Kroger Co. (NYSE:KR) in its Q1 2023 investor letter:

“The Kroger Co. (NYSE:KR is the second-largest grocery retailer in America, behind only Walmart. Although the grocery industry is highly competitive, Kroger’s scale advantages allow it to offer a more compelling value proposition than smaller peers and earn higher returns on capital. In recent years, the market has assigned Kroger a lower multiple due to concerns that e-commerce would disrupt traditional brick-and-mortar grocery businesses. However, we believe Kroger’s performance through the pandemic highlighted that its store footprint, distribution infrastructure, technology investments and strong brand all position the company well for a world with higher online grocery adoption. The stock trades for just 10x our estimate of next year’s EPS, which we believe is attractive given Kroger’s competitive positioning and earnings growth outlook. The pending merger with Albertsons has the potential to drive accelerated earnings growth and further scale advantages. If the merger is not approved, the company will have the capacity to return over 25% of its market cap to shareholders.”

13. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 81

Warren Buffett’s Berkshire Hathaway’s Holdings: $2,590,428,532

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 0.79%

Warren Buffett first acquired a stake in Citigroup Inc. (NYSE:C) during Q1 2022 at an average quarterly share price of $61.77. Citigroup Inc. (NYSE:C) is in the process of offloading the majority of its Banamex retail operations to Grupo Mexico for a sum of $7 billion. The move is in line with the company’s strategy of operating its consumer banking division through a small number of wealth centres. The stock is currently trading around the $47 level. Click here to read the company’s earnings call transcript for Q4 2022.

12. VeriSign, Inc. (NASDAQ:VRSN)

Number of Hedge Fund Holders: 40

Warren Buffett’s Berkshire Hathaway’s Holdings: $2,708,323,496          

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 0.83%

VeriSign, Inc. (NASDAQ:VRSN) is a Reston, Virginia-based company that specializes in providing domain name registry services and internet security solutions. It is one of the leading companies in the domain name industry and is responsible for managing and operating the authoritative directory of all .com, .net, .cc, .tv, and .name top-level domains (TLDs). The investment falls in line with Warren Buffett’s mantra of long-term value investing, as the demand for new domains is not expected to slow down anytime soon. VeriSign, Inc. (NASDAQ:VRSN) was held by 40 hedge funds as of Q4 2022.

11. DaVita Inc. (NYSE:DVA)

Number of Hedge Fund Holders: 34

Warren Buffett’s Berkshire Hathaway’s Holdings: $2,927,711,683

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 0.9%

DaVita Inc. (NYSE:DVA) is a Denver, Colorado-based healthcare company that provides kidney care services. It is one of the largest providers of dialysis services in the US. The company’s primary focus is on the treatment of patients with end-stage renal disease (ESRD) and chronic kidney failure. In an update issued on May 15, Lisa Bedell Clive at Bernstein increased the price target on DaVita Inc. (NYSE:DVA) from $88 to $100 after the company increased its 2023 guidance on May 9.

Here’s what Moon Capital Management said about DaVita Inc. (NYSE:DVA) in its Q4 2022 investor letter:

“During the fourth quarter, we purchased shares in DaVita Inc. (NYSE:DVA), a dialysis center operator. For those unfamiliar, kidney dialysis involves the critical removal of toxins, fluids and salts from the blood by artificial means. Roughly 500,000 patients receive kidney dialysis in the U.S., which requires a 3.5-hour treatment three times a week. The only alternatives to the treatments are a kidney transplant or potential fatality. Given the critical nature of its services, demand has little correlation with the overall economy, resulting in a highly recession resistant business.

The U.S. dialysis industry is highly concentrated, with two companies (DaVita and its competitor Fresenius) controlling a combined 80% of the $25 billion market. The dominance of this duopoly provides massive scale advantages, making it incredibly difficult for new entrants to gain profitable market share.

In the past, DaVita’s valuation has been penalized (we view unfairly) because the company generates a significant portion of its operating income from a small percentage of its patients. Of DaVita’s 200,000 patients, approximately 90% qualify for Medicare (or Medicaid), with the remaining 10% covered by a commercial insurance provider. While commercial insurers pay an average of $1,000 per treatment, the federal government’s pay rate for Medicare and Medicaid is only $275 – which is actually less than what it costs DVA to provide the treatment…”(Click here to read the full text)

10. HP Inc. (NYSE:HPQ)

Number of Hedge Fund Holders: 38

Warren Buffett’s Berkshire Hathaway’s Holdings: $3,549,965,209

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 1.09%

Warren Buffett’s Berkshire Hathaway owns over 120 million shares in HP Inc. (NYSE:HPQ) as of Q1 2023, reflecting 1.09% of the overall portfolio. The position in the Palo Alto, California-based information technology company was first initiated in Q1 2022. HP Inc. (NYSE:HPQ) is expected to stage a comeback as the personal computer market is near its bottom. Historically, HP’s shares have performed well when the PC market begins to recover. There is a widespread belief that the PC market will stage a recovery in the second half of 2023, which will be beneficial for HP Inc. (NYSE:HPQ). Click here to read the company’s Q1 2023 earnings call transcript.

9. Activision Blizzard, Inc. (NASDAQ:ATVI)

Number of Hedge Fund Holders: 129

Warren Buffett’s Berkshire Hathaway’s Holdings: $4,231,550,856

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 1.3%

Activision Blizzard, Inc. (NASDAQ:ATVI) received the green flag from the European Commission for its takeover by Microsoft Corporation (NASDAQ:MSFT) on May 16. Microsoft Corporation (NASDAQ:MSFT) agreed to buy the Santa Monica, California-based video game company in an all-cash deal of $95 per share in April 2022. However, the deal is still pending due to regulatory approvals. Although the European Union (EU) has approved the deal, the UK’s Competition and Markets Authority (CMA) has blocked it due to concerns related to the future of cloud gaming. Warren Buffett’s stake in Activision Blizzard, Inc. (NASDAQ:ATVI) was initiated in Q4 2021. The hedge fund increased its stake in the company by more than three times in the sequential quarter.

Here’s what Atai Capital said about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q1 2023 investor letter:

“Those familiar with Activision Blizzard, Inc. (NASDAQ:ATVI) will quickly realize this is by no means a small-cap stock and boasts a rather large $66B market cap. While our focus is firmly on small-cap stocks, there will be occasions when I see something in large-cap land that piques my interest.

For those unfamiliar with Activision Blizzard, they are a video game developer and publisher being acquired by Microsoft at $95/share. They develop and own IPs such as Call of Duty, World of Warcraft, Diablo, Overwatch, Hearthstone, and Candy Crush. These are some of the most valuable IPs in gaming, from both a business perspective and a popularity perspective. I’ve been an avid gamer for years and am not a fan of most of their games (quite the opposite actually), but I can still appreciate how valuable these IPs are. Activision games have some of the lowest expectations in the industry but still sell millions of copies. They are currently churning out a new Call of Duty every other year with practically no differences between the titles, and yet gamers consistently buy these “new” releases, every, single, time. In fact, the most recent release (MW2) was the fastest-selling COD game ever, amassing over $1B in sales in the first ten days after release. Candy Crush has been the top-grossing game franchise in the U.S app stores for twenty- two quarters in a row, and Diablo 4 is very likely to out-sell its predecessor Diablo 3 (30M+ copies over its lifetime) while being just as monetized via in-game skins and DLC’s if not better. Throw in the gaming secular tailwind, a highly competent CEO – Bobby Kotick, and I consider Activision to be a great business (what I’ve stated here is just high level of course) …” (Please click here to read the full text)

8. Moody’s Corporation (NYSE:MCO)

Number of Hedge Fund Holders: 55

Warren Buffett’s Berkshire Hathaway’s Holdings: $7,549,445,464          

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 2.32%

In an update issued to investors on May 17, Jeffrey Silber at BMO Capital maintained an Outperform rating on Moody’s Corporation (NYSE:MCO) stock and increased the target price from $355 to $360. According to the analyst, Moody’s Corporation (NYSE:MCO) offers a potential upside of over 16% from the closing stock price as of May 18. During the Q1 2023 results published on April 25, the provider of credit ratings and risk assessment products and services increased its full-year EPS guidance from a range of $9 to $9.50 to $9.50 to $10.

7. The Kraft Heinz Company (NASDAQ:KHC)

Number of Hedge Fund Holders: 39

Warren Buffett’s Berkshire Hathaway’s Holdings: $12,592,298,412        

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 3.87%

On May 4, an analyst at Stifel increased the price target on The Kraft Heinz Company (NASDAQ:KHC) from $44 to $46 and assigned the stock a Buy rating. The upward revision in target price came after the company reported positive Q1 2023 results and increased its full-year EBITDA guidance. The positive Q1 2023 results were led by better-than-anticipated price realization that resulted in a recovery of gross margin. The Foodservice and Emerging market division is driving the underlying growth of the firm as The Kraft Heinz Company (NASDAQ:KHC) is focused on improving its retail market performance in the US.

6. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 71

Warren Buffett’s Berkshire Hathaway’s Holdings: $13,216,875,439        

Percentage of Warren Buffett’s Berkshire Hathaway’s Portfolio: 4.06%

Occidental Petroleum Corporation (NYSE:OXY) came into the limelight after Berkshire Hathaway revealed that it increased its stake in the company by another $127 million in May. This increases Warren Buffett’s ownership to 23.8% of the company. Warren Buffett made his initial play in Occidental Petroleum Corporation (NYSE:OXY) in April 2019 after acquiring a $10 billion stake through 100,000 preferred shares. The preferred shares came with warrants to acquire 83.86 million shares at an average price of $59.62. As of Q1 2023, Buffett held 211.71 million shares of Occidental Petroleum Corporation (NYSE:OXY), equivalent to 4.06% of his overall portfolio.

Here’s what Smead Capital Management said about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2022 investor letter:

“Our top-performing stocks in the quarter includes Occidental Petroleum (NYSE:OXY). Oil and gas have been the best game in the stock market town this year and it was a pleasant surprise to see home builders pick up even with dour news on interest rates and the economy. For the first three quarters of the year, we should change the name of our fund to the Jed Clampett Fund. Occidental Petroleum (NYSE:OXY), was one of the standouts. Up through the bear market came a “bubblin’ crude!”

In addition to Occidental Petroleum Corporation (NYSE:OXY), stocks such as Bank of America Corporation (NYSE:BAC), Apple Inc. (NASDAQ:AAPL), and the Coca-Cola Company (NYSE:KO) are also amongst the top 15 stock picks of Warren Buffett’s 2023 portfolio.