Berkshire Hathaway Inc. is a publicly traded corporate conglomerate that can be purchased on the stock exchange. Warren Buffett used this company to hold his stock investment portfolio and also a holding company for all the great companies he purchased in full using Berkshire funds. It becomes more difficult for Buffett to continue to find great companies at the right price that are also large enough to be meaningful to his portfolio and to Berkshire for added growth due to the size of his portfolio and company. GEICO, the acronym for «Government Employees Insurance Company,» originally served federal employees and the military. GEICO had a competitive advantage by being the first major insurer to market directly to customers.
- Buffett has never entertained the notion of a Class A split, as doing so could encourage speculation.
- In 1965, when Buffett’s partnerships began purchasing Berkshire aggressively, they paid $14.86 per share while the company had working capital of $19 per share.
- The Omaha, Nebraska-based holding company has made a name for itself thanks to the investing prowess of Warren Buffett, who acquired it in the mid-1960s.
- Another common theme for the Oracle of Omaha is that he gravitates to businesses that have a shareholder-first mentality.
Warren Buffett Companies: What Companies Does Warren Buffett Own?
Berkshire Hathaway Inc. continued acquire and grow until it became the fifth biggest company in the world. Berkshire Hathaway is a holding company run by Warren Buffett that owns a diverse range of private businesses and significant minority interests in public companies such as Apple. It has a market capitalization of over $715 billion and is the sixth-largest public company in the world. Berkshire Hathaway’s success is largely due to Buffett’s value investing strategy, and its annual shareholder meetings have become a mecca for value investing proponents. The question of succession has been answered with Greg Abel named the heir apparent to Buffett. Insurance subsidiaries represent a large part of Berkshire Hathaway’s holdings.
Warren Buffett purchased about half of GEICO’s stock over the course of a few decades leading up to 1996, when he purchased the remaining half of the company. GEICO was just one of Buffett’s insurance deals, as he first purchased National Indemnity in 1967. Because insurance premiums are collected up front, and only paid out when and if something happens, insurance companies hold on to a huge amount of money to cover future payouts. Buffett has used this «insurance float» to make major investments, which is one of the keys to his success. The total float for all Berkshire’s insurance businesses was $169 billion dollars as of the end of 2023.
What Companies Does Warren Buffett Own?
For example, since 1989 it has owned between 6% and 10% of the Coca Cola Company, and by 2021 it had acquired more than 5% of Apple stock. Originally, it was a company comprised of a group of textile milling plants. Buffett assumed control of the struggling New England company in 1965.
The economy of the business may be fine, but that doesn’t mean it has a bright future. On May 1, 2021, vice chair of Berkshire Hathaway, Charlie Munger, unofficially announced that Warren Buffett would be succeeded as CEO by Greg Abel when Buffett eventually steps down. Abel’s official title is CEO of Berkshire Hathaway Energy and vice chair in charge of noninsurance operations. In addition to more than $260 billion in stocks Berkshire Hathaway holdings consist of more than $334 billion in cash and cash equivalents according to warren buffett company name its third quarter report. Also Warren Buffett is a very long-term holder of stake in Chinese conglomerate manufacturing company BYD.
After all, management will hand cash over to shareholders only when operations turn a large enough profit to make said payments feasible. So, perhaps it’s not surprising that Buffett has pursued dividends along with value investing. Berkshire Hathaway has a long history of operating success and smart investments. The company is the sixth-largest public company in the world in terms of market capitalization as of May 2023. Berkshire’s stock trades on the New York Stock Exchange in two classes—A shares and B shares. Class A shares have never split and closed above $500,00 per share in May of 2023 (its Class B shares traded at a more modest $325 on the same date).
- Insurance is special because it involves one of Buffett’s major innovations, the use of insurance float as investment capital.
- The Oracle of Omaha is a big believer in concentrating Berkshire’s invested assets into his top ideas.
- It has a market capitalization of over $715 billion and is the sixth-largest public company in the world.
- With a net worth of over $100 billion, it’s clear that Buffett knows a thing or two about the world of business.
What is Berkshire Hathaway?
Berkshire Hathaway Inc. (BRK.B), a giant conglomerate and one of the world’s largest companies, was founded by its current chair and CEO, billionaire Warren Buffett. Originally created by the 1955 merger of two New England textile manufacturers, Buffett acquired Berkshire Hathaway in 1965. It is now a holding company for the many acquisitions and investments Buffett has made over the decades. With a market capitalization of over $894 billion, it’s one of the largest publicly traded companies in the world, and the seventh largest company in the S&P 500. Berkshire Hathaway’s diverse group of businesses generated a total of $364.5 billion in revenue in 2023 and $96.2 billion in net earnings attributable to Berkshire Hathaway shareholders. He slowly changed Berkshire from a textile manufacturing company to an insurance and underwriting operation he kept the original name and transformed it into a diversified holding company over the years.
Warren Buffett’s personal portfolio consists of his ~16% stake in Berkshire Hathaway (worth more than $160 billion) and shareholdings in two banks – JP Morgan, Wells Fargo (size of those stakes is not known). Berkshire Hathaway acquired Duracell from Procter & Gamble (P&G) in 2014. Buffett paid for the company with his $4.7 billion of P&G stock plus $1.8 billion in cash, which meant he avoided the capital-gains tax he would have owed if he sold his stock. Buffett is a philanthropist and teamed with Microsoft co-founder Bill Gates to launch The Giving Pledge in 2010, encouraging billionaires to donate at least half their net worth to charity. He has donated more than half his Berkshire stock to the Bill & Melinda Gates Foundation and several charitable foundations run by his family.
Lastly, the 12 magnificent stocks that comprise more than 85% of Berkshire Hathaway’s $290 billion in invested assets almost always have sustainable moats and/or clearly defined competitive advantages. With the stock market trading at one of its highest valuation multiples when back-tested more than 150 years, Occidental Petroleum’s forward price-to-earnings (P/E) ratio of 12 speaks to a value-focused Buffett. If there’s one aspect of Buffett’s investment philosophy that he’s unwavering about, it’s his desire to get a good deal.
This did not include the value of fixed assets (factory and equipment). Buffett took control of Berkshire Hathaway at a board meeting and named a new president, Ken Chace, to run the company. He later claimed that the textile business had been his worst trade.41 He then moved the business into the insurance sector, and, in 1985, the last of the mills that had been the core business of Berkshire Hathaway was sold. While financial news outlets rarely showcase dividend data the way they do stock price and price movement figures, dividends provide one of the surest measures of a company’s vitality.
Warren Buffett’s Japanese Investments
For example, railroads and utilities have a moat due to the huge startup capital needed to lay railroad tracks or set up power lines. Some manufacturers, such as Precision Castparts (see below) have a large number of sophisticated and specific products that can be difficult to replicate, another form of a moat. Insurance is special because it involves one of Buffett’s major innovations, the use of insurance float as investment capital.
Berkshire Hathaway did finally do a partial stock split to create Class B shares in 1996. Through a Unit Investment Trust they created BRK.B and kept the per-share value of the smaller shares close to 1⁄30 of the original Class A share price. Berkshire’s Class B stock is the 5th biggest component of the S&P 500 Index as of December of 2019. American Express, which is Berkshire Hathaway’s second longest-tenured holding (since 1991), offers competitive advantages, as well. American Express benefits from its ability to play both sides of the transaction aisle. In addition to collecting fees from merchants as one of America’s most-trusted payment facilitators, it also lends via credit cards to businesses and consumers.
Warren Buffett is famously known as the “Oracle of Omaha” and is loved for his folksy humor. A significant portion of Berkshire Hathaway’s portfolio has always been insurance companies. National Indemnity Company and National Fire & Marine Insurance Company (now a part of National Indemnity) were both purchased in 1967, followed by GEICO in 1996 and General Reinsurance in 1998. His starting salary was $12,000 a year (about $141,000 today).23 There he worked closely with Walter Schloss. Graham was adamant that stock picks should provide a wide margin of safety after weighing the trade-off between their price and their intrinsic value.
Products are produced in the United States and Europe and are sold primarily through a global network of independent dealers and distributors, with peak sales occurring in the second and third quarters. Moreover, its marketing department has been hitting the right notes with consumers for decades. But the biggest surprise investors are likely to find in Buffett’s $290 billion portfolio is that it’s highly concentrated. The richest shareholder is Warren Buffett, with a net worth of over $121.8 billion. When he first acquired the firm, it was a struggling textile company with revenues of just $7 million.
Since that time, Berkshire has grown to be one of the largest companies in the world, based on market capitalization. Today, it is one of the world’s largest companies by market capitalization. Warren Buffett’s investment company, Berkshire Hathaway, has earned legendary status for its stunning performance over several decades. Within a portfolio worth hundreds of billions of dollars spread across dozens of stocks, Apple remains Buffett’s single biggest holding. These investments give Buffett a presence in the insurance industry and also provide a reliable source of income.