Are you looking for new stocks to buy but don’t know where to start? Don’t worry. Let an experienced stock picker do the work for you. Warren Buffett will do very well. After all, it’s not called the Oracle of Omaha for nothing.
Here’s a look at three of the most important positions held by Buffett. Berkshire Hathaway it would probably suit your wallet too.
Bank of America
Investors might be a little hesitant to hold it banking stocks right away. The sector is on the defensive, facing rising defaults and delinquencies, even as it experiences lukewarm demand for other banking services. Bank of America (NYSE:BAC) is no exception to this trend.
However, there is a reason why BofA stock is Since The bank released its first-quarter figures in mid-April, renewing a rally that began in October and taking the stock to a new 52-week high last week. This reason? Almost all of the problems facing the banking industry today are temporary or even disappearing.
Take corporate fundraising and M&A (mergers and acquisitions) as an example. This activity hit a wall in 2022 and 2023 after a robust 2021. She is now showing signs of new life. Figures from Dealogic indicate that total M&A transactions increased 30% year-over-year during the first quarter of 2024, leading to 14% growth in total investment banking fees in the during the same three-month period. Bank of America’s investment banking revenues in the first quarter improved 27%.
This business is also expected to continue to grow, following successful IPOs of companies such as Reddit And Astera Laboratories. As investment management firm Baird put it, a “resumption of mergers and acquisitions is fast approaching.”
It’s not just an impending rebound in M&A or IPOs that makes BofA a compelling prospect, however. This is the favorable wind of the economy behind this rebound – it is likely to generate new demand for all of Bank of America’s profit centers. At the same time, credit scoring technology company VantageScore says loan delinquencies fell last month, the first decline since May 2021. The average credit score also improved.
This implies that people have better control of their debt. This bodes well for lenders like BofA, which suffered a measurable increase in loan charge-offs last quarter. These write-offs could be as bad as the state of the bank’s loan portfolio this cycle.
Berkshire also owns just over a million shares of BofA, making it the fund’s second largest transaction.
Coca-Cola
Warren Buffett is not only a big fan of the product (he drinks up to five cans of the soda of the same name every day). He is also a major shareholder of The Coca-Cola Company (NYSE:KO). Berkshire owns nearly $25 billion of the soda giant’s stock – a position it has held for a long time, long time.
It’s not difficult to understand why. Coca-Cola is simply a great company. The organization has brilliantly marketed its products as well as…
