He may no longer be Berkshire Hathaway‘s CEO and resident stock-picker. There’s no denying, however, that Warren Buffett’s fingerprints are still all over the conglomerate’s current portfolio.
If you wanted to poach a pick or two from the Oracle of Omaha’s selections, there’s still time. In fact, here’s a couple that you might want to consider buying first — and one you arguably won’t want to.
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Apple is still Berkshire’s single-biggest stock holding. Through a combination of growth and attrition, though, credit card outfit American Express (NYSE: AXP) is now the organization’s second-biggest trade at just over $47 billion.
Anyone keeping tabs on this ticker likely knows it’s peeled back nearly 20% from December’s record high, largely on worries that economic malaise is dragging down consumer spending, and even crimping their ability to repay their loans. For perspective, the New York Federal Reserve reports U.S. household debt now stands at a record-breaking $18.8 trillion, with delinquencies on this debt at a near-decade high of 4.8%. It doesn’t bode well for a lender like Amex.
American Express may be better shielded from this trouble than you might think, however. As it serves more than its fair share of affluent borrowers, it’s holding up in the midst of this headwind. Indeed, Amex cardholders’ luxury spending grew 15% year over year during the fourth quarter, nearly doubling the 8% growth it saw in total billed business. This stock’s 20% pullback may be all the discount you’re going to get.
So far, the position that Berkshire Hathaway first established in beer maker Constellation Brands (NYSE: STZ) back in late 2024 hasn’t paid off. Shares of the company behind Corona and Modelo are down since then. In fact, Gallup reports that the proportion of people living in the United States who regularly consume alcohol now stands at a multidecade low of 54%.
This stock’s sustained weakness, however, ignores a couple of important details about the booze business in general, and about Constellation in particular.
Broadly speaking, although the decision to cut back on alcohol consumption is rooted in a combination of cost and health, this is a highly cyclical business. The demand that’s subdued now will be rekindled again sooner or later, perhaps when consumers are feeling more financially confident again.