Legendary investor Warren Buffett is widely regarded as the best investor of all time. In December 1962, Buffett bought shares of Berkshire Hathaway, a textile business then, for US$7.50 each. Today, under Buffett’s leadership, Berkshire has grown to become a diversified conglomerate. Its A class shares trade at an astonishing US$327,436 per share. Most of Berkshire’s investments during this time frame have gone on to become multibaggers.
With that in mind, here is a list of Berkshire’s top three holdings by holding value.
Apple Inc is Berkshire’s largest position. As of 19 September, Berkshire had US$55 billion worth of Apple shares. It is the third largest shareholder behind Vanguard and Blackrock. This year, Apple became the first company to surpass a trillion dollars in market cap. For its fiscal third quarter, which ended on 30 June 2018, quarterly revenue and earnings per share rose 17% and 40% respectively. This was the best ever third quarter in the company’s already illustrious history. This year, Apple returned US$25 billion to shareholders through dividends and US$20 billion in share buybacks.
Shares of Apple currently trade at US$218.24 (at the time of writing), giving it a price to earnings ratio of 18.9 and a dividend yield of 1.3%.
Wells Fargo & Co has been one of Berkshire’s biggest winners. The bank has a rich history dating back to 1852, when it was founded by Henry Wells and William Fargo. However, in recent times, the bank has been plagued with regulatory issues due to probes on its sales practices. Two years ago, it was revealed that employees had created fake accounts in customers’ names to meet target. The Federal Reserve has also imposed a cap on Wells Fargo’s assets to improve its operational control. It had a disappointing second quarter, falling short of analyst expectations.
Its shares trade at US$54.50 per piece. This translates to a price-to-earnings multiple of 15.7 and a dividend yield of 3.2%.
Bank of America Corp is the third on the list. The bank delivered strong operational results in the second quarter of 2018 as earnings jumped 43% from a year ago, handsomely beating analysts’ estimates. Berkshire current holdings of Bank of America Corp are worth US$20.5 billion.
Shares of Bank of America last changed hands at US$30.21 per piece, which translates to a price-to-earnings ratio of 14.2 and a dividend yield of 2.0%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Apple. Motley Fool Singapore contributor Jeremy Chia owns Berkshire Hathaway B shares.