Could 2025 Be the Ideal Time to Acquire Warren Buffett's Least Successful Stocks of the Previous Decade?
At 94, Warren Buffett hasn't lost his touch, proving his investment prowess once again in 2024 with Berkshire Hathaway outperforming the S&P 500 yet again. Not only did they beat the benchmark, but they did so while sitting on a $300 billion equities portfolio and preparing for a potential downturn.
The Oracle of Omaha's latest impressive feat has left investors eager to see what gems might be hiding in Berkshire's portfolio. One of the more recent additions is Occidental Petroleum, a struggling oil company that Buffett has taken a significant stake in. Buffett's confidence in the company's management and domestic oil's strategic importance has kept him investing, even as oil prices and market sentiment have taken a hit.
Occidental is also making a push in the fight against climate change, planning to open the world's largest direct air capture facility in 2025. This environmentally conscious initiative is a clear sign that Occidental is thinking beyond short-term profits. With an average break-even point for oil production around $60 per barrel, the company could prove to be a valuable hedge against inflation and provide good returns in a market turmoil.
Another notable underperformer from Berkshire's portfolio is Kraft Heinz, a consumer food giant that Buffett invested in back in 2013. Despite its struggles over the past decade, Berkshire has remained committed to the company, and its shares remain a top-10 holding in the portfolio. The company has managed to keep investors happy with share repurchases and a hefty 5.2% dividend yield, making it an attractive option for income-focused investors.
The worst performer in Berkshire's roster over the past 10 years is Liberty Latin America, a telecom provider operating in various Latin American markets. With challenges in the telecom sector and waning investor enthusiasm, the company has not seen much success. However, it's not all bad – telecom services are increasingly essential, and the company could see significant gains if they can navigate these challenges and the complexities of Latin American markets.
Investing in any of these Berkshire-held companies requires careful consideration. Buffett has demonstrated that even during challenging times, his investment strategy pays off. But it's essential to do your due diligence and weigh the risks and rewards before investing in any of these stocks or industries.
Buffalo's investment in Occidental in 2024 demonstrates his faith in money invested in finance, even during a downturn in 2025. Berkshire's significant stake in the oil company has positioned it as a potential average performer with its strategic oil production, offering a hedge against inflation.
The S&P 500 average performer in 2024 pales in comparison to Berkshire Hathaway's success, proving Buffett's continued prowess in the field of investing. Berkshire's 2024 portfolio, worth $300 billion, excelled in the market despite preparing for anticipated financial difficulties.
Buffett's confidence in Occidental's management and domestic oil's importance has propelled the company towards an environmentally conscious initiative, planning to open the world's largest direct air capture facility in 2025. This strategic move could potentially position Occidental as a valuable performer in the face of market turmoil.
In contrast, Kraft Heinz, an income-focused investment in Berkshire's portfolio from 2013, has underperformed, but its share repurchases and high dividend yield have retained investor interest. Despite facing challenges over the past decade, Kraft Heinz continues to be a top-10 holding in Berkshire Hathaway's equities portfolio.
