Five stocks that never left Buffet’s basket despite pandemic headwinds

Highlights

• Warren Buffett, the guru of the investment world, did not hold his investment portfolio still even when the pandemic disrupted the market.
• Buffett is eyed worldwide for his buy and hold policies that ultimately fetch returns in the long run.
• Bank of America, Apple, Coca-Cola, Kraft Heinz and American Express are among the significant occupiers in the Buffett portfolio.

Helter-skelter is the one word describing everything globally since a tiny virus crossed Chinese borders and wreaked havoc. The financial markets were no exception. Yet, it was interesting that other than the hope of overcoming the challenge, what sustained was Warren Buffett’s strong and resilient portfolio. Buffett sold shares of some companies, bought stakes in few others, but some did not leave the basket.

Related Read: Does Warren Buffet own any Tesla shares?

Let's snoop into the portfolio basket of the Oracle of Omaha to see which are the five stocks that weren’t abandoned amidst the troughs invited by the pandemic.

Apple Inc (NASDAQ:AAPL)

Through Berkshire Hathaway, Buffett added the first ten million Apple shares in May 2016 in his portfolio. Fast forward to 30 June, this year Buffet holds a whopping 887.1 million shares of the world's tech giant company. The numbers substantiate his consideration of Apple as the best company known to him in the world.

For its third quarter ended June, the company recorded a 36% increase in revenue y-o-y to reach US$81.4 billion. The diluted EPS for the quarter was reported to be US$1.30. The company generated an operating cash flow of US$21 billion. During the quarter, US$29 billion was returned to the shareholders. The Board of Directors has declared a cash dividend of US$0.22 per share on 12 August after the record date of 9 August.

Related Read: Apple net profits double in Q2

Bank of America (NYSE:BAC)

Buffett has over one billion Bank of America stock in his portfolio as of the end of Q2 2021. Since the pandemic hit the globe, Buffett has sold off nine financial stocks like JP Morgan Chase and Goldman Sachs while building his stakes in this American multinational investment bank headquartered in North Carolina.

In Q2 2021, the bank's revenues were down 5% y-o-y to US$21.5 billion, mainly due to the headwinds in interest rates in addition to lower trading revenues. However, the adjusted net income increased to US$8.9 billion. Adjusted income doubled in the quarter on the back of improvements in provisions for credit losses and a positive income tax adjustment associated with the revaluation of UK net deferred tax assets. Further, the quarterly common stock dividend too has increased to US$0.21 per share. This is over and above the US$25 billion share repurchase plan that was announced in April.

Also Read: Is Warren Buffett a value or a growth investor?

The Coca Cola Company (NYSE:KO)

The life of Coca Cola shares in Buffett's basket has always interested the public. This interest dates back to when he purchased over US$1 billion in shares of the non-alcoholic beverage giant back in 1988 while it still was reeling under the aftermath of the 1987 market crash. Ever since it clung on, and as of 30 June, Buffett holds 400 million shares of Coca Cola in his portfolio.

The company's second-quarter earnings surpassed the expectations of Wall Street and rocketed above 2019 levels, marking a solid bounce-back post the pandemic. The company's net income for the quarter was US$2.64 billion, which translates to 61 US cents per share compared to the 41 US cents per share figure reported last year. The net sales stood at US$10.13 billion. The company's latest projections for the full-year organic revenue growth is 12 to 14% for 2021.

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The Kraft Heinz Company (NASDAQ:KHC)

The Kraft Heinz Company is among the top five food and beverage companies in the world. Buffet once was displeased about investing in the company in 2019 when Kraft Heinz took a US$15.4 billion write down. Yet, it did not exit his portfolio basket. It seems it was for good. Since the pandemic began eating at home has increased, and so the company has been benefitting.

This year in Q2, the company saw its net sales grow to US$6648 million, which is a y-o-y 0.5% increase. The company has also seen a 98.5% yearly decline in net losses while the adjusted EBITDA declined 5.2% to US$1706. The year to date net cash from operating activities was US$2 billion- an 8.4% decline. Nevertheless, the company is optimistic about its performance in the times to come.

American Express (NYSE:AXP)

The New York-headquartered company is a multinational financial services corporation. Berkshire Hathaway has raked US$8 billion gains this year. The company has been one of Buffett's oldest and resilient holdings and has been a top performer on the Dow Jones Index this year. The first investment in the company was done in 1994.

In Q2 this year, the company reported US$2.80 worth of earnings per share. There was a 33% y-o-y increase in the total revenues of the company (net of interest expenses) to reach US$10.2 billion. There has also has been a 44% climb in the total expenses owing to higher customer engagement costs. In addition, the quarter also saw the return on equity expand 1240 basis point y-o-y to 30.5%. The company's cash and cash equivalents stand at US$ 31 billion, while the long term debt has declined 24% to US$37 billion.

Interesting Read: Does investment maestro Warren Buffet trade in penny stocks?

Bottom Line

The last year and a half has seen tech stocks soar, economic activity slow, hospitals hit full capacity, stimulus packages pumped, wait for inflation to soar, and a combination of so many other things never witnessed earlier. Yet, it is interesting to see how companies are coming out strong and bearing the flag of resilience. It would also be insightful and exciting to keep an eye on how the gurus of the investment world operate amidst this recovery.