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Warren Buffett Bump: I’ll Have What He’s Having

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Christopher Liew, CFA
·4 min read
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A close up image of Canadian $20 Dollar bills
A close up image of Canadian $20 Dollar bills

Warren Buffett’s stock portfolio in 2021 has a different composition following Berkshire Hathaway’s purchases in the fourth quarter of 2020. Buffett’s conglomerate has been deploying capital to take new positions and add more to some of its existing investments.

Bank of America and Apple are the top two stocks in terms of the number of shares, although the iPhone-maker is tops in market value. Berkshire sold its entire holdings in Barrick Gold, JPMorgan Chase, M&T Bank, PNC Financial, and Pfizer. The revamped roster includes brand-new stakes in two industry leaders.

Buffett’s loyal followers will probably rebalance their stocks portfolios and have what the GOAT of investing is having. If you’re investing in Canada, an industry leader is an attractive and profitable option in 2021 and beyond.

Stock build-up

Berkshire Hathaway is adding more healthcare stocks to its basket. After dumping Pfizer, the company increased its holdings in AbbVie, Merck, and Bristol-Myers Squibb. Buffett held Costco and Walmart for 20 years, but they are now missing in his portfolio. Instead, he further increased his holdings in grocery store chain Kroger to 33.5 million shares.

Holdings in lifestyle company RH (Restoration Hardware) are now 1.7 million shares. Buffett bought more shares of T-Mobile, the second-largest wireless provider in the United States. The position stands at 5.2 million shares. This move reflects the bullish sentiment of the Berkshire chief on the 5G network rollout.

Of all the stocks where Buffett increased its position, only Verizon Communications was granted a confidential status by the SEC. Berkshire convinced the commission that by disclosing the transaction, the share price of the U.S. wireless could move so much and hamper the purchasing process altogether.

Brand-new stakes

Berkshire’s brand-new positions are in insurance broker Marsh & McLennan and oil major Chevron. Suncor Energy is the only TSX stock left, although the position in the oil sands king is down to 13.8 million shares. The US$4.8 billion investment in Chevron is a sign Buffett is optimistic about an oil rebound.

Top TSX value stock

TSX investors can follow Buffett’s lead, particularly in the telecommunications sector. Telus (TSX:T)(NYSE:TU), Canada’s second-largest telco, offers tremendous growth potential. Network connectivity is more critical than ever, so the timing to invest in this $33.39 billion industry leader is perfect.

For the seventh consecutive time, U.K.-based Opensignal named Telus as the best mobile network in Canada. It boasts of the fastest average download speeds. Seattle-based Ookla called Telus winner of the fastest mobile network and best mobile coverage speed tests awards in Q3-Q4 2020.

TELUS has spent nearly $240 billion in network infrastructure, spectrum, and operations since 2020. The company commits to enhance the coverage, speed, and reliability of its networks. Over the next three years, it will invest $40 billion more to support the 5G network’s rollout. For would-be investors, this top-tier telco stock pays a lucrative 4.88%. The payouts should endure for years like its core business.

Portfolio makeover

Call it a makeover if you wish, but Warren Buffett is rebalancing his portfolio to conform to the post-pandemic era. Most of his latest investment moves gears toward for the long term. Perhaps he should consider Telus if he’s looking to add another Canadian value stock.

The post Warren Buffett Bump: I’ll Have What He’s Having appeared first on The Motley Fool Canada.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. David Gardner owns shares of Apple. The Motley Fool owns shares of and recommends Apple, Berkshire Hathaway (B shares), Bristol Myers Squibb, and Costco Wholesale. The Motley Fool recommends RH, TELUS CORPORATION, T-Mobile US, and Verizon Communications and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares).

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