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When more than half of your stocks are lagging the S&P 500 — like Warren Buffett’s Berkshire Hathaway’s are this year — you wish you owned a whole lot more of the winners. And fewer of the laggards.
Six of Berkshire Hathaway’s top 10 performing current holdings this year, including financial Wells Fargo (WFC), new holding Floor & Decor (FND) and consumer discretionary RH (RH), aren’t among Buffett’s largest 10 holdings by portfolio weight. This is based on an Investor’s Business Daily analysis, using MarketSmith and S&P Global Market Intelligence data, of Berkshire Hathaway’s just updated 44 U.S.-primary listed holdings.
Meanwhile, Berkshire Hathaway’s top holding by far, Apple (AAPL), isn’t even keeping pace with the S&P 500 this year. Shares of Apple are up just 13.8% this year so far. That’s about half the 25.5% gain by the SPDR S&P 500 ETF Trust (SPY). More than 42% of Berkshire Hathaway’s U.S.-primary listed portfolio, or nearly $134 billion, is tied up in just Apple.
Warren Buffett Stocks: Missing Out On Wells Fargo Bounce
Perhaps the most painful miss on Warren Buffett stocks is the powerful comeback in Wells Fargo. Buffett has aggressively sold one of his longtime favorite stocks — almost just in time to miss a powerful 67% rally this year.
In fact, Wells Fargo is now the top-performing stock among all of Berkshire Hathaway’s stable of holdings. But it’s now one of the smallest in the portfolio, ranking No. 39 out of 44 holdings. Berkshire now owns just 675,054 shares, worth $34 million. That translates to next to nothing in the massive Berkshire Hathaway portfolio and just 0.02% of Wells Fargo’s shares outstanding.
Berkshire Hathaway, in just two years, sold 99.8% of its position in the bank, dispensing with 377.7 million shares. The value of those sold shares would have risen more than $7.6 billion just this year.
But it’s important to note Wells Fargo’s value is still down roughly 7% in two years. And while Buffett unloaded Wells Fargo, he’s still a massive holder in rival Bank of America (BAC). BofA, which is Berkshire Hathaway’s No. 2 holding after Apple, is up 55.4% this year. Should you buy Wells Fargo stock now?
Warren Buffett Wishing For More Consumer Discretionary
It’s easy to see why Buffett wanted to add shares of home-improvement retailer Floor & Decor. It’s known for its top-notch management, an intangible factor he puts much faith in.
But additionally, it’s carving out a niche outside the reaches of Home Depot (HD). Strong earnings growth, expected to hit 63% in 2021, is powering the stock nearly 50% higher this year. And yet, Berkshire Hathaway only owns 0.8% of the company making up less than 0.1% of its portfolio. It’s only the No. 34 largest position in the portfolio.
Similarly, Buffett has watched shares of high-end home goods company RH absolutely boom. Shares are up 45.5%, just this year. And longer term, they’re even more impressive: up more than 1,800% in the past five years. During that time, the S&P 500 is only up 115%. But Berkshire Hathaway’s position in RH, though, doesn’t crack the top 10. Its $1.2 billion position is only 0.4% of the Berkshire Hathaway portfolio and only 8.5% of the company’s market value.
Clearly owning just a slice of some of these giant winners is a plus. But when Berkshire Hathaway is lagging the S&P 500 in the past year, three years, five years and 10 years, Buffett could certainly use some more of them.
Top 10 Performing Warren Buffett Stocks
Only four of the firm’s top 10 performing holdings this year are top 10 Berkshire Hathaway stocks
|Company||Symbol||Sector||Stock YTD % ch.||$ value of Berkshire Hathaway holding ($ billions)||Size rank in Berkshire portfolio*||% of Berkshire portfolio|
|Bank of America||(BAC)||Financials||55.4||47.6||2||15.1%|
|General Motors||(GM)||Consumer Discretionary||50.4||3.8||10||1.2%|
|Floor & Decor||(FND)||Consumer Discretionary||48.4||0.1||34||0.0%|
|Marsh & McLennan||(MMC)||Financials||44.0||0.5||30||0.1%|
|The Bank of New York Mellon||(BK)||Financials||39.4||4.3||9||1.4%|
Sources: IBD, S&P Global Market Intelligence, * — among U.S. primary listed positions as of latest filings
Follow Matt Krantz on Twitter @mattkrantz