Buffett’s New Stock Picks for Q2

Warren Buffett added seven new stocks to Berkshire Hathaway’s portfolio in the second quarter of 2024. He initiated new positions in aerospace and electronics company Heico and cosmetics retailer Ulta Beauty. Buffett purchased 1.04 million shares of Heico and over 690,000 shares of Ulta Beauty. One of the most expected trades for Buffett during Q2 was buying 7.26 million additional shares of Occidental Petroleum. This purchase made Occidental Petroleum Berkshire’s sixth-largest holding. Buffett mentioned in his letter to shareholders earlier this year that he expects to own a stake in Occidental “indefinitely.” Buffett also increased Berkshire’s position in insurer Chubb by nearly 4.3%, translating to 1.11 million additional shares. Chubb now ranks as Berkshire’s ninth-largest holding after initiating the position last year. In addition, Buffett expanded his stake in Liberty SiriusXM Group by purchasing 2.43 million shares of Liberty SiriusXM Group Class A and 4.52 million shares of Liberty SiriusXM Group Class C. He also acquired 96.2 million shares of Sirius XM, significantly boosting Berkshire’s interest in the satellite radio and podcast company.

Buffett’s Q2 value stock choices

While some may argue that Ulta Beauty could be too expensive, it trades at a forward earnings multiple of 16.3, which isn’t unreasonable compared to the S&P 500’s 21.5 times forward earnings. Sirius XM and Chubb are more attractively priced, trading at forward earnings multiples of just under 12 and 11.9, respectively. Occidental Petroleum stands out the most, with a forward earnings multiple of 11 times. The fact that Berkshire has regulatory approval to acquire up to 50% of the company, while currently owning only 27.3%, adds to the stock’s attractiveness for value investors. Occidental Petroleum emerges as the top pick for value investors among Buffett’s Q2 purchases. Aside from its low valuation, Occidental is investing in direct air capture technology, which aims to remove carbon dioxide from the atmosphere. If successful, this technology could make Occidental Petroleum a massive winner in the future. With Buffett’s history of selecting value stocks, his recent purchases provide solid options for investors looking to add strong, value-centric stocks to their portfolios. Among them, Occidental Petroleum stands out due to its low forward earnings multiple and promising technological investments.