Warren Buffett and Insiders Love These Stocks
In this piece, we will take a look at some stocks that are loved by both Warren Buffett and insiders. If you want to skip our primer on Mr. Buffett and insider trading, then jump ahead to Warren Buffett and Insiders Love These Stocks: Top 5 Stocks.
The second quarter of 2023 has proven to be an interesting one when it comes to Warren Buffett. As his investment firm Berkshire Hathaway filed its holdings for the period with the SEC, it revealed that Mr. Buffett had shaken things up by quite a bit. During the second quarter, he reduced his investments significantly in five companies and took up new stakes in three new firms. The unfortunate firms in this list are Activision Blizzard, Inc. (NASDAQ:ATVI), Globe Life Inc. (NYSE:GL), General Motors Company (NYSE:GM), Celanese Corporation (NYSE:CE), and Chevron Corporation (NYSE:CVX). These firms saw Berkshire Hathaway reduce its investments by 71%, 61%, 45%, 40%, and 8%, respectively. Cumulatively, the reduction translated into the investment firm cutting down the stakes by roughly $6.5 billion.
The new investments came in some of the biggest home building companies in America, indicating that Mr. Buffett is on board with the significant improvement in sentiment surrounding the industry this year. Home building companies are facing some interesting times since the outbreak of the coronavirus pandemic. The pandemic, which led to stay at home orders and lock downs, resulted in a large scale shift to remote working. This not only freed up office space but also increased demand for houses in suburban areas as more workers moved to the city outskirts and felt encouraged by low interest rates to buy a house. This sudden surge in demand enabled the home building companies to massively increase their margins - a strategy that benefited them in 2023. The main hurdle for home buyers this year is high interest rates, but big home builders have successfully navigated against this by reducing their margins and offering buyers mortgage rates as low as 5%. Naturally, home builder stocks have soared on the market this year, and Mr. Buffett's three new investments in this category are NVR, Inc. (NYSE:NVR), Lennar Corporation (NYSE:LEN), and D.R. Horton, Inc. (NYSE:DHI).
Warren Buffett's latest SEC filings show that he has invested approximately $814 million in the three home building companies and increased his investment in the financial services firm Capital One Financial Corporation (NYSE:COF) by $409 million. Cumulatively, this shows that he bought $1.2 billion worth of shares of four companies in Q2 2023, which is quite a bit of activity when we consider the stability of Berkshire Hathaway's investment portfolio. This stability comes through the Oracle of Omaha's investment strategy which sees him bide his time and wait patiently before pouncing and plowing billions of dollars into the stock of companies that he deems to be suitable. For more details on Warren Buffett's investment strategy, be sure to check out Warren Buffett’s 12 Longest Held Stocks which is a list that includes some stocks that he has held for decades after promising that he will never sell them.
Shifting gears to focus on insider trading, along with penny stock pump and dump scandals, it is one area of the stock market that has generated controversy for decades and will continue to do so. This is evident from the fact that on June 29th, 2023 alone, the United States Attorney for the Southern District of New York and the FBI filed insider trading charges against ten people in four separate cases. According to the U.S. Attorney, the accused made more than $30 million through 'stolen' and material non public information. The latest insider trading scandals in America include one of the largest companies in the world, Pfizer Inc. (NYSE:PFE). A Pfizer employee Amit Dagar knew in 2021 that the firm's Paxlovid had generated positive results in a trial for COVID treatment, and he and his associates bought and sold call options to make more than $350,000 in profits.
Today, we'll look at some stocks that are favored by both Warren Buffett and insiders to see which lucky companies have seen not only the most successful investor of our time buy their shares, but also confidence from their board and investors to solicit stock purchases. Some notable names on this list are The Coca-Cola Company (NYSE:KO), Occidental Petroleum Corporation (NYSE:OXY), and American Express Company (NYSE:AXP).
Our Methodology
To compile our list of the stocks that both insiders and Warren Buffett are buying, we scanned Berkshire Hathaway's second quarter of 2023 investment portfolio and checked each of the 46 company stocks in it with Insider Monkey's insider trading tracker to see which firms have seen insider purchases. This provided us with a list of 24 companies, out of which the top 15 holdings are listed below.
Warren Buffett and Insiders Love These Stocks
15. Snowflake Inc. (NYSE:SNOW)
Berkshire Hathaway's Q2 2023 Investment: $1 billion
Snowflake Inc. (NYSE:SNOW) is a cloud computing company that provides a platform that enables businesses to run data analytics. The firm is slated to report its second quarter of 2023 earnings soon, and analysts have penned in a 10 cent earnings per share.
65 of the 910 hedge funds part of Insider Monkey's Q2 2023 database had held a stake in Snowflake Inc. (NYSE:SNOW). Out of these, the firm's largest shareholder is Brad Gerstner's Altimeter Capital Management since it owns a stake worth $2.7 billion. Its director Mark D. McLaughlin bought 1,831 shares for $163 in May 2023, and the shares currently trade for $152.
Snowflake Inc. (NYSE:SNOW) joins Occidental Petroleum Corporation (NYSE:OXY), The Coca-Cola Company (NYSE:KO), and American Express Company (NYSE:AXP) in our list of stocks that are loved by both Warren Buffett and insiders.
14. Activision Blizzard, Inc. (NASDAQ:ATVI)
Berkshire Hathaway's Q2 2023 Investment: $1.2 billion
Activision Blizzard, Inc. (NASDAQ:ATVI) is a video game developer that has seen considerable news coverage for quite some time now as it is currently being acquired by Microsoft Corporation (NASDAQ:MSFT). The deal entered a crucial stage in August, with Britain's Competition and Markets Authority (CMA) expected to give its final decision by the end of the month. Activision Blizzard, Inc. (NASDAQ:ATVI) director Peter J. Nolan bought $1 million worth of shares at an average price of $75.99 in May 2023.
After digging through 910 hedge funds for their second quarter of 2023 investments, Insider Monkey discovered that 134 had invested in the video game company. Matthew Halbower's Pentwater Capital Management is Activision Blizzard, Inc. (NASDAQ:ATVI)'s biggest hedge fund investor since it owns 21.2 million shares that are worth $1.7 billion.
13. Capital One Financial Corporation (NYSE:COF)
Berkshire Hathaway's Q2 2023 Investment: $1.36 billion
Capital One Financial Corporation (NYSE:COF) is a bank headquartered in McLean, Virginia. The firm has a presence in several American states and its second quarter financial results marked a turnaround of sorts as it was the first quarter after the previous three in which the bank beat analyst EPS estimates. The firm's president of commercial banking Neal A Blinde purchased 31 shares at an average price of $119 in May 2022.
Insider Monkey took a look at 910 hedge funds portfolios for their June quarter of 2023 shareholdings to find out that 51 had bought and invested in Capital One Financial Corporation (NYSE:COF)'s shares. Out of these, the firm's largest stakeholder is Natixis Global Asset Management's Harris Associates courtesy of a stake worth $2 billion.
12. Amazon.com, Inc. (NASDAQ:AMZN)
Berkshire Hathaway's Q2 2023 Investment: $1.37 billion
Amazon.com, Inc. (NASDAQ:AMZN) needs no introduction given that it's a household name. Over the past 18 months, its former CEO and founder Mr. Jeff Bezos has bought one share worth $114.77. Mr. Buffett's investment firm owns a $1.37 billion stake in the company.
Along with Berkshire, 278 out of the 910 hedge funds polled by Insider Monkey had invested in the retailer. Amazon.com, Inc. (NASDAQ:AMZN)'s biggest hedge fund investor is Ken Fisher's Fisher Asset Management since it owns 40.6 million shares that are worth $5.3 billion.
11. Charter Communications, Inc. (NASDAQ:CHTR)
Berkshire Hathaway's Q2 2023 Investment: $1.4 billion
Charter Communications, Inc. (NASDAQ:CHTR) is a telecommunications services provider. The firm scored a win in August after the Biden Administration announced massive investments in America's communications infrastructure. Director Eric Louis Zinterhofer bought a whopping $10 million worth of stock at an average price of $374 in November 2022.
67 out of the 910 hedge funds profiled by Insider Monkey had bought Charter Communications, Inc. (NASDAQ:CHTR)'s shares as of Q2 2023. Out of these, the largest stakeholder is Natixis Global Asset Management's Harris Associates courtesy of a $1.98 billion investment. Berkshire Hathaway is the second largest Charter Communications, Inc. (NASDAQ:CHTR) investor since it owns 3.8 million shares for a $1.4 billion investment.
10. The Liberty SiriusXM Group (NASDAQ:LSXMA)
Berkshire Hathaway's Q2 2023 Investment: $1.41 billion
The Liberty SiriusXM Group (NASDAQ:LSXMA) is an entertainment company with its own satellites and a radio network. The firm's investors were in for a shock in August after its shares tanked on the stock market after a weak earnings report. Warren Buffett's Berkshire Hathaway is its largest investor as of June 2023, owning multiple blocks of shares out of which the most valuable one is worth $1.4 billion.
Along with the firm, 43 out of the 910 hedge funds part of Insider Monkey's database had invested in The Liberty SiriusXM Group (NASDAQ:LSXMA). None other than its CEO Mr. Greg Maffei bought nearly $5 million of stock in August 2023 for a price of around $36.
9. Paramount Global (NASDAQ:PARA)
Berkshire Hathaway's Q2 2023 Investment: $1.49 billion
Paramount Global (NASDAQ:PARA) is another entertainment company that runs television programs and produces movies. Its second quarter earnings provided some respite to investors as they marked the first EPS beat after the previous three quarters. The stock is still rated Hold on average. Director Shari Redston bought 165,000 shares at an average price of $15.06 in May 2023.
After digging through 910 hedge fund holdings for this year's second quarter, Insider Monkey discovered that 39 had bought the firm's shares. Paramount Global (NASDAQ:PARA)'s largest hedge fund shareholder is Berkshire Hathaway through a stake worth $1.49 billion.
8. Aon plc (NYSE:AON)
Berkshire Hathaway's Q2 2023 Investment: $1.49 billion
Aon plc (NYSE:AON) is an insurance company headquartered in Dublin, Ireland. Its director Byron Spruell bought 400 shares worth $116,688 in August 2022.
Insider Monkey's June quarter of 2023 survey covering 910 hedge funds revealed that 41 had invested in Aon plc (NYSE:AON). The company expanded its insurance portfolio in August after it teamed up with another firm to expand coverage to trucking.
7. Visa Inc. (NYSE:V)
Berkshire Hathaway's Q2 2023 Investment: $1.97 billion
Visa Inc. (NYSE:V) is a financial technology company that enables users to make and collect payments. It's one of the few stocks on our list which is rated Strong Buy on average by analysts perhaps because the firm has beaten analyst EPS estimates for all four of its latest quarters. Visa Inc. (NYSE:V)'s director Denise M. Morrison bought three shares for $316.37 in January 2022.
Warren Buffett's Berkshire Hathaway owned 8.2 million Visa Inc. (NYSE:V) shares for a $1.97 billion stake as of this year's second quarter. Including the firm, 171 out of the 910 hedge funds surveyed by Insider Monkey were also the firm's investors. Out of these, Chris Hohn's TCI Fund Management is the largest stakeholder courtesy of its $4.2 billion investment.
6. VeriSign, Inc. (NASDAQ:VRSN)
Berkshire Hathaway's Q2 2023 Investment: $2.8 billion
VeriSign, Inc. (NASDAQ:VRSN) is a website registration services provider. Growth in global digital adoption and the shift to the internet have enabled the firm to grow its earnings per share during all four of its latest quarters.
During Q2 2023, 35 out of the 910 hedge funds part of Insider Monkey's database had held a stake in the company. VeriSign, Inc. (NASDAQ:VRSN)'s biggest hedge fund investor in our database is Berkshire Hathaway since it owns 12.8 million shares that are worth $2.8 billion. Verisign, Inc. (NASDAQ:VRSN)'s director Thomas Frist purchased $20,779 worth of shares for an average price of $218.73 in March 2022.
The Coca-Cola Company (NYSE:KO), VeriSign, Inc. (NASDAQ:VRSN), Occidental Petroleum Corporation (NYSE:OXY), and American Express Company (NYSE:AXP) are some top stocks in Warren Buffett's second quarter portfolio with insider buying.
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Disclosure: None. Warren Buffett and Insiders Love These Stocks is originally published on Insider Monkey.
