At age 93, Warren Buffett presides over a vast stock portfolio currently worth nearly $400 billion. From humble beginnings, Buffett has created an equity portfolio that is the envy of the investment world. It is carefully tracked, meticulously analyzed and hotly debated by analysts, investors and media pundits. Many people try to replicate the Oracle of Omaha’s returns, though with decidedly mixed results.
Through his holding company Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), Buffett has developed an investing style focused on security analysis, sound fundamentals and risk avoidance. He owns primarily blue-chip stocks and takes a long-term buy-and-hold approach. Buffett has owned the same position in some stocks for more than 30 years. His patience, focus and wisdom have become truly legendary.
Here are three Warren Buffett long-term stocks that every investor should consider.
Apple (AAPL)
What’s interesting about Berkshire Hathaway’s stock portfolio is how concentrated it is. Nearly half of the portfolio (45%) is invested in one stock: Apple (NASDAQ:AAPL). Buffett owns nearly 790 million shares of AAPL stock, currently worth $177 billion. He owned more before trimming his stake in Apple stock during this year’s first quarter, as evidence pointed to a slowdown in sales of the signature iPhone. Apple is also one of Buffett’s newer holdings, having first started to acquire the stock in 2016.
Buffett has been effusive in his praise of Apple, its products and the company’s CEO, Tim Cook. He has to be happy to see the consumer electronics giant get back on track after stumbling at the start of this year. In June, Apple unveiled its highly anticipated artificial intelligence strategy. And on Aug. 1, the company reported financial results for this year’s second quarter that beat Wall Street forecasts, with iPhone sales exceeding expectations. Apple stock is up 17% so far this year.
Moody’s (MCO)
Buffett has owned shares of credit rating agency Moody’s (NYSE:MCO) since the year 2000. Berkshire Hathaway today holds 24.6 million shares of MCO stock worth $11.27 billion. Berkshire’s position has barely changed over nearly 25 years. Buffett clearly likes Moody’s business and competitive position in the marketplace. The company is one of only three credit rating agencies in the U.S., along with Standard & Poor’s (NYSE:SPGI) and Fitch Ratings.
Currently, Moody’s comprises 2.9% of Berkshire Hathaway’s portfolio, making it one of the larger holdings that’s not Apple. Buffett has steadfastly held onto MCO stock through many market downturns and despite the ratings agencies coming under heavy criticism during the 2008-09 financial crisis. Despite some ups and downs, Moody’s has continued to be a strong business. The company recently reported second-quarter financial results that beat Wall Street forecasts, with revenue up 22% and profits up 46% from a year ago.
MCO stock is up nearly 20% on the year.
Kroger (KR)
Retail grocery store chain Kroger (NYSE:KR) is the type of blue-chip stock Buffett covets. The essential nature of the groceries it sells insulates Kroger from economic downturns. The stock has proven to be a steady gainer, having risen 151% in the last five years. The shares also trade at a reasonable valuation of 12 times future earnings estimates, meaning it’s not too expensive to own. And, KR stock pays a strong quarterly dividend of 32 cents a share, giving it a yield of 2.32%.
Buffett owns exactly 50 million shares of KR stock worth $2.72 billion based on the current price. The position is relatively small, comprising just 0.7% of Berkshire Hathaway’s portfolio. But it’s larger than many positions Buffett holds. KR stock has been on an upswing lately. Since the end of June, the company’s share price has increased 10%. The stock has been marching higher since Kroger announced that it is pausing its $25 billion merger with grocery rival Albertsons (NYSE:ACI).
Year to date, KR stock is up 21%.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
