Warren Buffett’s Investment Moves: Insights from Recent 13F Filings
Two weeks ago, a key data release caught the attention of investors. On February 14, institutional investors managing at least $100 million were required to submit their Form 13F to the Securities and Exchange Commission. This form provides an overview of the stocks bought and sold by some of Wall Street’s leading money managers, giving insights into which stocks and trends are currently favored by top asset managers.
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Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Warren Buffett’s Trading Activity in Focus
No investor captures as much attention as Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). Over his 60-year tenure, he has generated a staggering return of over 6,000,000% for Class A shareholders. Annually, his returns have outperformed the S&P 500, yielding 19.9% compared to the benchmark’s 10.4% since the mid-1960s.
However, the most revealing aspect of Buffett’s market perspective may well be seen beyond the stocks listed in Berkshire’s quarterly 13F reports. Identifying Buffett’s true favorite stock can be misleading if one solely relies on this document.
Buffett’s Favorite Holdings: A Closer Look
For anyone examining Berkshire’s 13F filings, it may appear that either Apple (NASDAQ: AAPL) or Occidental Petroleum (NYSE: OXY) stands as Buffett’s favored stock. While Berkshire has divested 615.6 million shares of Apple between October 1, 2023, and September 30, 2024, it remains the company’s largest holding by far. By February 24, it constituted 25% of Buffett’s $297 billion portfolio, due to its innovation and substantial buybacks amounting to nearly $750 billion since early 2013.
In contrast, Buffett has amassed nearly 265 million shares of Occidental Petroleum, marking a $13.2 billion investment. This position signals his belief that crude oil prices will remain high or could increase further, which would greatly benefit Occidental’s revenue concentrated in drilling operations.
But in terms of capital outlay, neither Apple nor Occidental is Buffett’s most significant investment. Instead, the stock he has purchased most extensively is shares of Berkshire Hathaway itself. Since mid-2018, Buffett has authorized approximately $78 billion in share repurchases.
Benefits of Share Buybacks
For a company like Berkshire Hathaway that doesn’t issue dividends, share buybacks represent a primary method for Buffett to reward shareholders. By reducing the number of outstanding shares, it can elevate existing investors’ ownership stakes over time. This practice aligns with Buffett’s and his late collaborator Charlie Munger’s long-term investment philosophy.
Share repurchases can enhance Berkshire’s earnings per share (EPS). As net income remains steady or grows, a decreasing share count should raise EPS, making Berkshire’s stock more appealing to investors.
Following an amendment to its buyback program on July 17, 2018, Buffett took action, repurchasing Berkshire stock for 24 consecutive quarters from July 2018 to June 2024.
However, a commendable shift occurred during the last two quarters: Buffett refrained from buying back any of his company’s shares. Despite Berkshire’s cash reserves reaching record levels of $325.2 billion and $334.2 billion as of September 30 and December 30, respectively, Buffett has remained on the sidelines regarding repurchases.
At his core, Warren Buffett is a steadfast value investor. He refrains from overpaying for any asset, including his own company’s stock, regardless of its strengths or competitive advantages.
From mid-2018 to mid-2024, shares of Berkshire Hathaway fluctuated between a 20% and 50% premium compared to their book value. Yet, in recent quarters, they have consistently been valued at a 50% to 70% premium.
Image source: Getty Images.
Market Conditions: A Cautious Approach
Buffett’s decision to halt share repurchases for two straight quarters is just a single facet of his cautious approach. In the previous nine quarters, Berkshire’s financial statements indicate that he and his advisors were net sellers of stocks, tallying around $173 billion in net stock sales from October 1, 2022, through December 31, 2024.
Buffett’s Caution Signals Tough Market for Berkshire Investors
The writing on the wall is clear: finding attractive investment opportunities is increasingly challenging for Berkshire Hathaway’s chief, Warren Buffett.
The Buffett Indicator: A Cautionary Sign
In a notable 2001 interview with Fortune magazine, Buffett called the market capitalization to U.S. gross domestic product (GDP) ratio—now known as the “Buffett indicator”—“probably the best single measure of where valuations stand at any given moment.”
Historically, when back-tested to 1970, the Buffett indicator has averaged a reading of 85%. This suggests that the total value of U.S. stocks typically represents about 85% of U.S. GDP. However, on February 18, 2025, the Buffett indicator soared to an all-time high of 207.46%, significantly surpassing its 55-year average by 144%. This spike illustrates how stock valuations have diverged from historic norms, shedding light on Buffett’s reluctance to invest Berkshire’s capital into new ventures, maintain existing holdings, or repurchase shares of his own company’s stock.
Buffett’s hesitance to act on his preferred investments sends a cautionary message to Wall Street, hinting at potential trouble ahead.
Considering an Investment in Berkshire Hathaway?
Before deciding to buy shares in Berkshire Hathaway, it’s essential to take some factors into account:
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway, and recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
