We now know which stocks Warren Buffett has been buying and selling for Berkshire Hathaway‘s (BRK.A 0.55%) (BRK.B 0.42%) portfolio. The giant conglomerate submitted its 13-F filing to the U.S. Securities and Exchange Commission after the market closed on Monday.
Buffett and his investment managers led Berkshire to add shares of several companies. Here are two stocks that he just bought that you should consider buying, too.
The Apple of Buffett’s eye
Other than Berkshire Hathaway itself, there’s one stock that Buffett prizes above all others — Apple (AAPL 0.63%). It’s by far the biggest position in Berkshire’s portfolio. And now Buffett’s stake in Apple is even bigger.
As of the end of the first quarter of 2022, Berkshire directly owned nearly 891 million shares of Apple. Berkshire revealed in its latest 13-F filing that it owns a little over 894.8 million shares of Apple. Actually, Berkshire’s stake in Apple is even larger. It also indirectly owns additional shares of Apple through its position in New England Asset Management.
Why does Buffett love Apple so much? Probably the best answer is that Apple is simply an exceptionally well-run company. Buffett stated in 2020 that it was “probably the best business I know in the world.” That’s high praise coming from a consummate analyst of businesses.
The strength of Apple’s underlying business is also the top reason why it’s a great pick for investors who don’t head up huge conglomerates. Apple’s iPhone continues to gain popularity. The company reported a record number of customers switching to the iPhone from other phones in its June quarter.
Look for Apple’s fortunes to improve over the near term. CFO Luca Maestri told analysts in the company’s recent conference call that revenue growth is expected to accelerate in the September quarter. Apple should also benefit from a boost in the latter part of the year with its upcoming launch of the iPhone 14.
Of course, Buffett focuses more on the long term than he does on the short term. So should you. Apple’s long-term prospects also appear to be bright. Global 5G penetration remains low, which presents a big opportunity for Apple. The company also could open up new markets with its augmented reality innovations on the way.
A baby Berkshire
Much of Berkshire’s success has been due to its insurance businesses. Insurers make money through premiums and by investing. Buffett really likes this business model. Unsurprisingly, Berkshire initiated a position earlier this year in Markel (MKL 0.23%) — a company that some refer to as a “baby Berkshire.”
At the end of the first quarter of 2022, Berkshire owned 424,343 shares of Markel. Buffett and his investment team added over 10% more shares in Q2.
Markel really is sort of a mini-me to Berkshire. The company primarily focuses on insurance. It ranks as a leader in providing specialty insurance for niche markets with unique needs. Like Berkshire, Markel uses the cash generated from premiums to invest in other businesses.
Many of those are publicly traded businesses. Markel owns over 100 stocks. Its top holding happens to be Berkshire Hathaway. Several other stocks in Markel’s portfolio are also found in Berkshire’s portfolio, notably including Apple. However, Markel also has invested in many stocks that Buffett and his team haven’t bought, such as Alphabet and Microsoft.
Also like Berkshire, Markel sometimes invests in businesses that aren’t listed on stock exchanges. The company’s Markel Ventures unit owns stakes in 19 companies, including luxury handbag maker Brahmin and primary care provider PartnerMD.
There’s a good argument to be made that Markel ranks among the best stocks that Buffett owns right now. Its insurance business generates steady revenue that’s largely resistant to inflation. Markel’s investments could prove to be even bigger winners over the long run than Berkshire’s portfolio.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet (A shares), Apple, Berkshire Hathaway (B shares), and Microsoft. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), Markel, and Microsoft. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.