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The Zacks Analyst Blog Highlights: Berkshire Hathaway, Apple, American Express, Kraft Heinz and Teva Pharmaceutical

Zacks Equity Research

For Immediate Release

Chicago, IL –September 13, 2019 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Berkshire Hathaway Inc. BRK.B, Apple Inc. AAPL, American Express Company AXP, The Kraft Heinz Company KHC and Teva Pharmaceutical Industries Limited TEVA.

Here are highlights from Thursday’s Analyst Blog:

Warren Buffett’s Best & Worst Performing Stocks Thus Far in 2019

Berkshire Hathaway Inc.’s CEO Warren Buffett is inarguably the greatest role model for an investor. After getting into the investment game pretty early, Buffett has successfully transformed his initial $10,000 of investments into almost $81 billion in around six decades.

Buffett’s primary investment style is quite simple as it entails searching for companies with long-term competitive advantages, which can be purchased and held for extended period of time. A solid business model and the ability to record significant growth are the basic criteria for any company to come under the ambit of Buffet’s investment style. In other words, these companies have good earnings potential and are not concerned about the market recognizing its worth. These also generate plenty of cash and provide dividends, which are indicators of strong and sustainable business.

Such companies included the likes of railroad operator — BNSF, insurer — Geico, and fast-casual dining chain — Dairy Queen, which have really bolstered Berkshire’s bottom line for quite some time. In fact, some of Berkshire’s top holdings have seen their aggregate market value soar by billions so far this year. But, not all securities that Berkshire hold has done well this year. Let us, thus, have a look at the winners and losers from Oracle of Omaha’s favored companies.

Big Gainers

Apple Berkshire’s largest holding. Apple has more than 5% stake in Berkshire and has helped the company realize a return of more than 30% or $12.44 billion since the beginning of this year.

Consistent dividend payment, steady cash flows and constant product innovation make the iPhone maker a favorite with Buffet. Even though the iPhone has witnessed a lackluster performance this year, it still holds majority of share among cell phone manufacturers in the North American market. And if we add Apple’s growing streaming services, then it can be safely concluded that the stock will surely do even better in the near future.

Apple, currently, has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its current year earnings improved 1.5% over the past 60 days. The company has already outperformed the broader Computer - Mini computers industry so far this year (+41.7% vs +40.1%).

Thanks to increase in consumer spending levels this year, American Express Company has been almost unstoppable this year. In the most recent quarter, the company saw spending increase by 7% in the U.S. market and 5% globally. Shares of the provider of credit payment card products, and travel-related services to consumers and businesses worldwide has jumped 23.8% on a year-to-date basis, more than the broader Financial - Miscellaneous Services industry’s rally of 20.7%.

What’s more, American Express, which is one of the major holdings of Berkshire, has helped the latter gain more than $3.5 billion in market share so far this year. American Express, currently, has a Zacks Rank 3. The Zacks Consensus Estimate for its current year earnings increased 0.2% over the past 60 days.

The Underperformers

A handful of stocks have affected the Oracle of Omaha several billions of dollars so far this year. Notable among them are The Kraft Heinz Company and Teva Pharmaceutical Industries Limited. Kraft Heinz, in particular, has been a nightmare for Berkshire. While the stock has tanked 32% so far this year, the broader Food - Miscellaneous industry has rallied 16.1%.

Reduction in inventory levels and rising costs marred Kraft Heinz’s performance this year. Moreover, adverse currency impacts have been weighing on the company’s performance. Kraft Heinz, currently, has a Zacks Rank #4 (Sell).

Teva Pharmaceutical has also been a terrible investment for Berkshire. Teva has been bearing the brunt of generic-drug price weakness in recent times, leading to a slash in profit and sales guidance. After all, its top-selling brand-name therapy (Copaxone) has been grappling with intense competition in recent times. The Zacks Rank 3 stock has nosedived 46.1% so far this year, while the broader Medical - Generic Drugs industry has declined 3.2%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

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