Key Points
- For most of 2024, Warren Buffett has been a net seller of some of his holdings
- Buffett’s huge cash position may indicate he feels the stock market is fully valued
- Given the strong market moves higher this year, it may be time for a portfolio check-up. Qualified financial advisors can help you position your portfolio for 2025. Click here to get started finding one in your area.
If any investor has stood the test of time, it’s Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock star-like presence in the investing world, and his annual Berkshire Hathaway Inc (NYSE: BRK-A | BRK-A Price Prediction) shareholders meeting draws thousands of loyal fans who are investors.
Known for his long buy-and-hold strategies and massive portfolio of public and private holdings, he remains one of the world’s preeminent investors. With interest rates poised to move lower and the market trading at all-time highs, many across Wall Street feel Mr. Buffett’s gigantic $325 billion cash position could indicate he sees some turbulence ahead.
Why do we cover Warren Buffett stocks?
With a 15-year track record of covering Mr. Buffett and Berkshire Hathaway at 24/7 Wall St., it is essential to keep our readers updated on the latest news from the financial powerhouse. Plus, with many of our readers either owning the shares or considering a purchase, it’s good to keep them updated regularly.
Why does Warren Buffett have so much cash?
As we noted, many Wall Street analysts, and indeed us at 24/7 Wall St. who cover Berkshire Hathaway, have proposed that Warren Buffett, with his largest cash position ever, may feel that, in historical terms, the stock market is overvalued and expensive. The S&P 500 P/E Ratio is at a current level of 27.87, up from 27.45 last quarter and 24.59 one year ago. This is a change of 1.51% from the previous quarter and 13.35% from one year ago. This is way above the average P/E ratio from 1971 to 2017, 19.4 times.
What stocks has Berkshire Hathaway been selling in 2024?
Berkshire Hathaway sold more than 600 million shares of Apple Inc. (NASDAQ: AAPL) in 2024, though Apple still remains its largest stock holding, at $69.9 billion. Mr. Buffett sold $36.1 billion of Apple stock overall and several billion dollars of Bank of America (NYSE: BAC).
What stocks did Warren Buffett buy in 2024?
In 2024, Warren Buffett has been a very reluctant buyer. In a bizarre twist, he purchased approximately 690,000 shares of Ulta Beauty, Inc. (NASDAQ: ULTA), valued at around $266 million, in the second quarter of 2024. After buying more, the conglomerate sold nearly all of that stake in the third quarter of this year, selling more than 95% of its shares.
In the third quarter, he bought just two stocks: 1.28 million Domino’s Pizza, Inc. (NYSE: DPZ) shares worth $549.3 million and approximately 404,000 shares of Pool Corporation (NASDAQ: POOL), a distributor of swimming pool supplies, worth about $152.3 million at the end of September.
We think Domino’s Pizza could be a stock split candidate in 2025
While the purchase of Domino’s Pizza seems like the ideal Berkshire Hathaway holding, as the company has built a solid moat around its restaurant business, trading at $465 at the time of this writing, it looks like a strong candidate for a split in 2025. The shares trade at a rich 26 times estimated 2025 earnings and pays shareholders a reasonable 1.30% dividend. However, for many investors, a price close to $500 makes buying a meaningful stake of even 100 shares too expensive. A four-for-one split still leaves the shares trading at $116. It’s still pricey but easier for retail investors to buy.
Another argument for the 2025 split is that the company split its shares three-for-one in June 2016 and, oddly, 3.1 for 1 in April 2007. So, there is history to back up the argument.
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