Warren Buffett's big-time faith in Apple is hurting Berkshire Hathaway now. Good thing he's got some other S&P 500 winners to count on.
Eight U.S.-listed stocks in Buffett's Berkshire's portfolio, including firm Charter Communications, financial Markel Group and T-Mobile US, are up since the S&P 500 hit its high this year on July 31, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Those gains are welcome as Buffett's favorite stock — by far — hits the skids. Apple, which accounts for 55% of Berkshire Hathaway's U.S.-listed stock portfolio is down 8% since July. The value of Berkshire Hathaway's position in the stock is down a mind-boggling $14.4 billion in just two-and-half months.
Lagging Apple Hurts Berkshire
A highly concentrated portfolio is great when the stocks are working. But since July, Berkshire Hathaway's picks are mostly hurting, too.
Nearly 84% of Berkshire Hathaway's 49 U.S.-listed stocks are down since July 31. And his average stock is down more than 11% since then, putting them squarely in a correction. In fact, 33 of Buffett's holdings, or roughly two-thirds, are falling more than the S&P 500 in the pullback.
Meanwhile, when a giant holding slips, like Apple is, that's a big hole for the rest of the portfolio. Berkshire Hathaway is the No. 3 largest owner of Apple with 5.9% of shares outstanding.
Apple's stock is still up nearly 39% this year. But the concern is how it's behaving since Treasury yields started to rise and its latest phone debuted to meh reviews. Apple's drop is worse than the S&P 500's 5.4% decline in that time.
But of more concern, Apple is falling even as fellow tech giants Alphabet and Meta Platforms rise 4.7% and 1.7%, respectively, from late July. And analysts think Apple's adjusted profit per share will fall 1% this fiscal year.
So what's working for Berkshire Hathaway now?
Winning Bets In Communications
Big rallies since July are starting to make a difference in Berkshire Hathaway's portfolio. Take Charter Communications, Buffett's top stock since July 31 gaining 10.5%.
It's such a powerful rally shares of the cable operator are now up 32% this year, nearing Apple's run. If there's any knock, though, it's that Berkshire Hathaway doesn't own enough Charter to move the needle. Its 3.8 million shares is less than 1% of Buffett's portfolio. That means even the double-digit gain since July only added $163.6 million in value.
The same goes with T-Mobile. The shares are up 2.3% since July 31. But since Berkshire Hathaway only owns less than 1% of the company, that gain barely makes a dent with a $16.7 million gain.
Energy firm Occidental Petroleum is the only gainer big enough to add more than a rounding error-worth of value for Berkshire Hathaway. Buffett owns a quarter of the stock, accounting for about 5% of the portfolio. But it's only up 0.1% since the pullback — not a huge contributor.
So while Buffett has some winners — he really needs Apple to bounce back. His portfolio is riding on it.
Warren Buffett's Top Stocks During The Pullback
Up since the S&P 500 topped this year on July 31
| Company | Symbol | % ch. from July 31, 2023 | % of Berkshire Hathaway's U.S.-listed portfolio | Sector |
|---|---|---|---|---|
| Charter Communications | 10.5% | 0.6% | Communication Services | |
| Markel Group | 2.5% | 0.2% | Financials | |
| T-Mobile US | 2.4% | 0.2% | Communication Services | |
| Aon | 1.9% | 0.5% | Financials | |
| Activision Blizzard | 1.8% | 0.5% | Communication Services | |
| Mastercard | 1.4% | 0.5% | Financials | |
| Globe Life | 1.1% | 0.1% | Financials | |
| Occidental Petroleum | 0.1% | 4.7% | Energy | |
| Apple* | -8.0% | 55% | Information Technology |
