Berkshire Hathaway boosts stakes in Sirius XM

Warren Buffett’s Berkshire Hathaway bought more shares of several stocks during the market downturn in the first quarter of 2025. Regulatory filings revealed that the conglomerate added to its positions in Sirius XM Holdings and Occidental Petroleum early in the year. Later, as the market sell-off intensified, Berkshire increased its stakes in five Japanese trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These companies, known as “soga sosha,” operate in various industries, similar to Berkshire Hathaway itself. Buffett has praised these Japanese stocks for their low valuations, capital deployment strategies, management, and investor-friendly attitudes. He expects to hold them indefinitely. While individual investors should consider their own objectives and risk tolerance before following Buffett’s moves, the Japanese stocks offer compelling qualities such as solid business models, attractive valuations, and dividend payouts. Berkshire Hathaway itself has been a strong performer in 2025, up 12% while most of the U.S. stock market has struggled. The company’s success is largely attributed to its robust insurance business, which generated $88.7 billion in premiums in 2024.

Berkshire adds to Sirius XM

The insurance operations provide Berkshire with a steady income stream and a $171 billion “float” that can be invested for further profit. Additionally, more than half of the companies in Berkshire’s stock portfolio pay dividends, expected to total around $6 billion in 2025. Instead of paying dividends, Berkshire rewards shareholders through stock buybacks. In 2024, the company spent $2.9 billion repurchasing its shares. One Berkshire holding that could potentially deliver substantial returns in the coming years is Sirius XM Holdings. Despite the stock’s 63% plunge since last year, Berkshire has continued buying, now owning more than a third of the satellite radio provider. Sirius XM’s revenue has declined slightly over the past two years, but the company remains financially robust, generating over $1 billion annually and employing aggressive stock buybacks. Factors such as a surge in vehicle sales, cheaper gas, increased domestic travel, and companies calling employees back to the office could drive more people to subscribe to satellite radio again. Currently, Sirius XM trades at less than 7 times forward earnings and yields 5.4%, with dividends increasing annually for the past eight years. The company appears poised for a resurgence, with the potential to deliver significant returns in the future. Image Credits: Photo by Jonathan Gallegos on Unsplash