According to current portfolio statistics, a Premium feature of GuruFocus, five stocks in Warren Buffett (Trades, Portfolio)’s first-quarter 13F equity portfolio that outperformed the Standard & Poor’s 500 Index during the past six months include Nu Holdings Ltd. (NU, Financial), Amazon.com Inc. (AMZN, Financial), StoneCo Ltd. (STNE, Financial), Apple Inc. (AAPL, Financial) and DaVita Inc. (DVA, Financial).
On Thursday, the “Oracle of Omaha” said he converted 9,000 Class A shares of Berkshire Hathaway Inc. (BRK.A, Financial) into Class B shares (BRK.B, Financial). Buffett donated 10.5 million Class B shares to Bill Gates (Trades, Portfolio)’ foundation trust, 1.05 million shares to the Susan Thompson Buffett Foundation and 2.2 million shares evenly split among foundations led by Buffett’s three children. As of Friday, Class B shares of Berkshire traded around $336.56, showing the stock is modestly overvalued based on its price-to-GF Value ratio of 1.23.
Buffett started the schedule of annual grants on June 26, 2006, when he owned $43 billion Class A shares of Berkshire. The Oracle said his most-recent charitable donations boosted the total amount given to more than $50 billion, “substantially more than” his entire net worth in 2006. Buffett further said he pledged in his 2006 shareholder letter that he will continue making annual gifts of Berkshire B shares throughout his lifetime.
Guru background and portfolio overview
Buffett studied under Benjamin Graham during the 1950s. The Oracle converted Berkshire from a textile company into an insurance conglomerate that has a market cap of over $735 billion as of Friday.
Buffett and co-manager Charlie Munger (Trades, Portfolio) seek investments using a four-criteria investing approach: understandable business, favorable growth prospects, shareholder-oriented management and attractive valuations. As of March, Berkshire’s $325.11 billion 13F equity portfolio contains 48 stocks with a quarterly turnover ratio of 2%. The top four sectors in terms of weight are technology, financial services, consumer defensive and energy, accounting for 48.68%, 22.46%, 12.29% and 10.72% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Nu Holdings
Berkshire owns 107,118,784 shares of Nu Holdings (NU, Financial), giving the stake 0.16% equity portfolio weight.
Shares of Nu Holdings traded around $7.60 on Friday. The stock has gained approximately 94.04% over the past six months, outperforming the S&P 500 by approximately 78.52%.
Nu Holdings is engaged in providing digital banking services. It offers several financial services such as credit cards, personal accounts, investments, personal loans, insurance, mobile payments, business accounts and rewards. The company earns the majority of its revenue in Brazil.
The company has a GF Score of 19 out of 100 based on a financial strength rank of 5 out of 10 and a profitability rank of 1 out of 10. Despite this, there is not enough data to compute ranks for growth, GF Value and momentum and thus, the GF Score may give an incomplete picture of the stock’s potential.
Other gurus with holdings in Nu Holdings include Baillie Gifford (Trades, Portfolio) and Frank Sands (Trades, Portfolio)’ Sands Capital Management.
Amazon.com
Berkshire owns 10,551,000 shares of Amazon.com Inc. (AMZN, Financial), giving the position 0.34% equity portfolio weight.
Shares of Amazon.com traded around $129.66 on Friday, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.65. The stock gained approximately 48.98% over the past six months, outperforming the S&P 500 by approximately 39.81%.
Amazon is a leading online retailer and one of the highest-grossing e-commerce aggregators with $386 billion in net sales and approximately $578 billion in estimated physical and digital online gross merchandise volume in 2021. Retail-related revenue represents approximately 80% of the total, followed by Amazon Web Services' cloud computing, storage, database and other offerings (10%-15%), advertising services (5%) and other. International segments constitute 25% to 30% of Amazon's non-AWS sales, led by Germany, the United Kingdom and Japan.
The company has a GF Score of 94 out of 100 based on a financial strength rank of 6 out of 10, a profitability rank of 8 out of 10, a growth rank of 10 out of 10, a GF Value rank of 8 out of 10 and a momentum rank of 9 out of 10.
Other gurus with holdings in Amazon.com include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Baillie Gifford (Trades, Portfolio).
StoneCo
Berkshire owns 10,695,448 shares of StoneCo (STNE, Financial), giving the holding 0.03% equity portfolio weight.
Shares of StoneCo traded around $13.75 on Friday, showing the stock is a possible value trap based on its low price-to-GF Value ratio of 0.21. Despite this, the stock gained approximately 41.15% during the past six months, outperforming the S&P 500 by approximately 31.34%.
StoneCo is a provider of financial technology solutions. The company offers solutions that empower merchants to conduct electronic commerce seamlessly across in-store, online and mobile channels in Brazil. Its Stone Business Model combines advanced, end-to-end, cloud-based technology platforms, differentiated hyper-local and integrated distribution approaches and white-glove, on-demand customer service.
The company has a GF Score of 83 out of 100 based on a financial strength rank of 6 out of 10, a profitability rank of 7 out of 10, a growth rank of 10 out of 10, a GF Value rank of 2 out of 10 and a momentum rank of 6 out of 10.
Other gurus with holdings in StoneCo include Steven Cohen (Trades, Portfolio)’s Point72 Asset Management and Ron Baron (Trades, Portfolio)’s Baron Funds.
Apple
Berkshire owns 915,560,382 shares of Apple (AAPL, Financial), giving the stake 46.44% equity portfolio weight. The stock has been Berkshire’s largest holding as of December 2017.
Shares of Apple traded around $186.51 on Friday, showing the stock is fairly valued based on its price-to-GF Value ratio of 1.08. The stock gained approximately 39.53% during the past six months, outperforming the S&P 500 by approximately 26.31%.
Apple designs a wide variety of consumer electronic devices, including smartphones, tablets, PCs, smartwatches and AirPods, among others. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Fitness, Apple Card and Apple Pay, among others. Apple's products include internally developed software and semiconductors, and the company is well known for its integration of hardware, software, semiconductors and services. Apple's products are distributed online as well as through company-owned stores and third-party retailers.
The company has a GF Score of 93 out of 100 based on a financial strength rank of 7 out of 10, a profitability rank of 10 out of 10, a growth rank of 10 out of 10, a GF Value rank of 3 out of 10 and a momentum rank of 9 out of 10.
Other gurus with holdings in Apple include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Jeremy Grantham (Trades, Portfolio)’s GMO.
DaVita
Berkshire owns 36,095,570 shares of DaVita (DVA, Financial), giving the position 0.90% equity portfolio weight.
Shares of DaVita traded around $98.39 on Friday, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.76.
DaVita is the largest provider of dialysis services in the United States, boasting market share that eclipses 35% when measured by both patients and clinics. The company operates over 3,100 facilities worldwide, mostly in the U.S., and treats over 240,000 patients globally each year. Government payers dominate U.S. dialysis reimbursement. DaVita receives approximately 69% of U.S. sales at government (primarily Medicare) reimbursement rates, with the remaining 31% coming from commercial insurers. However, while commercial insurers represented only about 10% of the U.S. patients treated, they represent nearly all of the profits generated by DaVita in the U.S. dialysis business.
The company has a GF Score of 89 out of 100 based on a financial strength rank of 3 out of 10, a profitability rank of 9 out of 10, a growth rank of 9 out of 10, a GF Value rank of 9 out of 10 and a momentum rank of 6 out of 10.
