The market storms of 2023 forced even the billionaires and masters of the money game to make massive changes to their portfolios and strategies. Warren Buffett, for example, started amassing cash this year as volatility and macro challenges caused a dearth of attractive deals for the Oracle of Omaha. Warren Buffett’s company has built up a cash arsenal of a whopping $157 billion. Berkshire sold a whopping $5 billion of stocks on a net basis in the third quarter alone. The company has sold about $44 billion worth of stocks over the past four quarters.
But there’s more to Buffett’s moves this year than just the lack of deals. According to Steve Hanke, a professor of applied economics at Johns Hopkins University, Buffett is building up cash positions to unleash a buying spree when the market tanks.
The billionaire investor, who recently lost his dearest friend and business partner Charlie Munger, is also running out of patience for companies that are seeing revenue declines and lack of growth in the challenging world of today. Berkshire Hathaway recently cut its stake in HP Inc (NYSE:HPQ) by more than half. As of the end of November, Berkshire owned about 51.5 million shares of HPQ, significantly down from 103 million HPQ shares the firm owned as of the end of the third quarter.
Occidental Petroleum Corp (NYSE:OXY) ranks 15th in our list of the stocks Warren Buffett and other billionaire are crazy about.
Insider Monkey’s database shows that 14 billionaire-led hedge funds had stakes in Occidental Petroleum Corp (NYSE:OXY) . The biggest stakeholder of Occidental Petroleum Corp (NYSE:OXY) was Warren Buffett’s company which owned a stake worth over $14 billion in Occidental Petroleum Corp (NYSE:OXY).
In November, the energy giant Occidental Petroleum Corp (NYSE:OXY) posted third quarter results. Adjusted EPS in the period came in at $1.18, beating estimates by $0.32. Revenue in the quarter fell 22.1% year over year to $7.4 billion, beating estimates by $440 million.
14. SPDR S&P 500 ETF Trust (NYSEARCA:SPY)
Number of Billionaire Investors: 15
Insider Monkey’s database of 910 hedge funds shows that billionaires were piling into the broader market as of the end of the third quarter as 15 billionaire-led funds reported having stakes in SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
Warren Buffett’s Berkshire reported having a $17 million stake in the ETF.
13. DR Horton Inc (NYSE: DHI)
Number of Billionaire Investors: 15
Home construction company DR Horton Inc (NYSE:DHI) is among the favorite stocks of Warren Buffett and other billionaires tracked by Insider Monkey. Buffett’s Berkshire Hathaway reported owning a $642 million stake in DR Horton Inc (NYSE:DHI). Overall, 15 billionaires had stakes in DR Horton Inc (NYSE:DHI) as of the end of the third quarter.
In November, DR Horton Inc (NYSE:DHI) posted fourth quarter results. GAAP EPS in the period came in at $4.45, surpassing estimates by $0.52. Revenue jumped about 19.3% year over year to $10.5 billion, beating estimates by $480 million.
Baron Real Estate Fund made the following comment about D.R. Horton, Inc. (NYSE:DHI) in its second quarter 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation, and D.R. Horton, Inc. (NYSE:DHI) – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
12. American Express Company (NYSE:AXP)
Number of Billionaire Investors: 15
American Express Company (NYSE:AXP) remains one of the most favorite Warren Buffett stocks for years now. Berkshire Hathaway, as of the end of the third quarter of 2023, had a $23 billion stake in American Express Company (NYSE:AXP).
As of the end of the third quarter of 2023, 15 hedge funds out of the 910 funds tracked by Insider Monkey reported having stakes in American Express Company (NYSE:AXP). Some notable billionaires having stakes in the stock, in addition to Warren Buffett, were Ken Fisher ($1.5 billion stake), D. E. Shaw ($193 million stake) and Ken Griffin ($122 millions stake).
Artisan Select Equity Fund made the following comment about American Express Company (NYSE:AXP) in its Q3 2023 investor letter:
“American Express Company (NYSE:AXP) shares declined by 14%. Company results continued to be excellent, but shares were weak due to fears of a recession or a meaningful slowdown in the economy. Credit quality is normalizing after below-normal credit provision levels coming out of the pandemic. The company has an excellent brand, outstanding underwriting and a premium cardholder base that is the envy of the payments industry. It is well positioned to grow, and the current valuation reflects short-term fears over the direction of the economy, rather than the long-term upward trajectory in American Express’ earnings power.”
11. HP Inc (NYSE:HPQ)
Number of Billionaire Investors: 15
HP Inc (NYSE:HPQ) shares have gained about 10% year to date. The stock, however, fell in November after HP Inc (NYSE:HPQ) posted lukewarm fiscal Q4 results. The Street is looking beyond the short-term as the PC market begins to recover. Bernstein analyst Toni Sacconaghi, Jr. said in a note he expects a balanced near-term risk-reward for the stock with some upside potential. However, the analyst is concerned about the printing business of HPQ since it represents about 60% of its profits and remains “secularly” challenged.
As of the end of the September quarter of 2023, 15 hedge funds reported having stakes in HP Inc (NYSE:HPQ). The most significant stakeholder of HP Inc (NYSE:HPQ) was Warren Buffett’s Berkshire Hathaway with a $2.6 billion stake in HP Inc (NYSE:HPQ).
However, Berkshire has recently cut its stake in HPQ to just 51.5 million shares shares, as of the end of November.
10. Kroger Co (NYSE:KR)
Number of Billionaire Investors: 16
Insider Monkey’s billionaire database shows that 16 billionaires had stakes in Kroger Co (NYSE:KR) as of the end of the third quarter of 2023. Last month, Kroger Co (NYSE:KR) reported its third quarter results. Adjusted EPS in the period came in at $0.95, beating estimates by $0.03. Revenue came in at $33.96 billion, beating estimates by $60 million.
Warren Buffett’s Berkshire owns a $2.24 billion stake in Kroger Co (NYSE:KR). Some other billionaires bullish on the stock are Cliff Asness ($252 million stake), Ray Dalio ($92 million stake) and D. E. Shaw ($37 millions stake).
Oakmark Equity and Income Fund made the following comment about The Kroger Co. (NYSE:KR) in its Q3 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. However, we believe the company’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 approximately 25% of its market cap to shareholders.”
9. Bank of America Corp (NYSE:BAC)
Number of Billionaire Investors: 17
Berkshire Hathaway owns a $28.3 billion stake in Bank of America Corp (NYSE:BAC) as of the end of the September quarter. Overall, 17 billionaires had Bank of America Corp (NYSE:BAC) in their portfolios entering the fourth quarter of 2024.
Diamond Hill Select Strategy made the following comment about Bank of America Corporation (NYSE:BAC) in its Q2 2023 investor letter:
“Other bottom contributors included SunOpta, Bank of America Corporation (NYSE:BAC) and Texas Instruments. Bank of America (which we added to the portfolio in Q2) is among the US’s largest banks. Shares were pressured during the quarter against a still-challenging backdrop for banks, particularly as investors fret about rising deposit costs and the values of some longer-duration assets in a rising-rates environment.”
8. Coca-Cola Co (NYSE:KO)
Number of Billionaire Investors: 17
Coca-Cola Co (NYSE:KO) is a popular choice among billionaires, thanks to Coca-Cola Co’s (NYSE:KO) consistent dividend hikes and a diversified and defensive business nature. Warren Buffett has been a fan of Coca-Cola Co (NYSE:KO) shares, having first initiated a Coca-Cola Co (NYSE:KO) trade back in 1998.
Insider Monkey’s proprietary database of billionaires shows that 17 billionaires had stakes in Coca-Cola Co (NYSE:KO) as of the end of the third quarter.
Hayden Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its third 2023 investor letter:
“It’s not just emerging markets either, where one could argue a “scarcity premium” given fewer quality public companies. Even in the US, The Coca-Cola Company (NYSE:KO) trades at ~30x P/E despite having the same earnings as 10 years ago.
7. Citigroup Inc (NYSE:C)
Number of Billionaire Investors: 17
Warren Buffett, Ken Fisher, Richard S. Pzena and Israel Englander were among the list of billionaires having stakes in Citigroup Inc (NYSE:C) as of the end of the third quarter of 2023.
Warren Buffett’s hedge fund reported owning a $2.3 billion stake in Citigroup Inc (NYSE:C). Citigroup Inc (NYSE:C) is reportedly beginning a round of layoffs to cut costs.
During the third quarter, Citigroup Inc’s (NYSE:C) adjusted EPS in the period came in at $1.52, beating estimates by $0.30. Revenue jumped 8.8% year over year to $20.1 billion, beating estimates by $830 million.
Here is what Silver Beech Capital has to say about Citigroup Inc. (NYSE:C) in its Q3 2023 investor letter:
“Citigroup (“Citi”) is a large-capitalization global diversified financial services holding company that primarily serves multinational institutional and high net worth consumer clients. Citi is one of three large American banks to be designated in “bucket 3 or 4” of the “global systemically important bank” (“G-SIB”) framework by The Basel Committee on Banking Supervision. The other banks in this group are J.P. Morgan and Bank of America.
6. T-Mobile Us Inc (NASDAQ:TMUS)
Number of Billionaire Investors: 17
Wireless network operator T-Mobile Us Inc (NASDAQ:TMUS) ranks 6th in our list of the stock both Warren Buffett and other billionaires are piling into. Including Warren Buffett, a total of 17 billionaires had stakes in T-Mobile Us Inc (NASDAQ:TMUS) as of the end of the third quarter of 2023. In October, T-Mobile Us Inc (NASDAQ:TMUS) reported its third quarter results.
GAAP EPS in the period came in at $1.82, surpassing estimates by $0.10. Revenue came in at $19.25 billion, missing estimates by $120 million.
ClearBridge Dividend Strategy made the following comment about T-Mobile US, Inc. (NASDAQ:TMUS) in its Q3 2023 investor letter:
“During the quarter we initiated positions in two new names: T-Mobile US, Inc. (NASDAQ:TMUS) and Gilead Sciences. T-Mobile is the best-in-class player in the wireless space, delivering the strongest growth with the lowest cost structure and the best consumer proposition. T-Mobile’s strength is rooted in its advantaged competitive position. Its superior spectrum holdings enable it to provide better wireless service at meaningfully lower cost. T-Mobile’s annual capital expenditures run about $10 billion, on the order of half the amount its peers must spend. Due to its lower cost structure, T-Mobile can undercut its competitors on price while still generating compelling profitability and returns.
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Disclosure. None. Warren Buffett and Billionaires Are Crazy About These 15 Stocks was initially published on Insider Monkey.
