Warren Buffett is known as being a patient investor. But is he too patient with five stocks, including some in the S&P 500?
All five of the U.S.-listed stocks (and classes of stocks) Buffett's Berkshire Hathaway added to in the fourth quarter, including Sirius XM Holding, Liberty SiriusXM and Chevron, are lagging again this year so far after underperforming all of last year too, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
The five stocks Buffett bought during the quarter fell an average 16% in 2023, while the S&P 500 gained 24.3%. Additionally, they're all underperforming the S&P 500's year-to-date gain of 5.6% so far. Buffett's added positions are up just 0.3% this year on average.
And he's upping on losing bets just as investors worry if the S&P 500 is overvalued and running out of steam. "While markets appeared to be positioned too optimistically last month, I wonder whether the pendulum has now swung too far in the other direction," said Craig Erlam at Oanda.
Buffett Going Bigger On Losers
Sirius XM Holdings is the stock Buffett went biggest on. During the fourth quarter, his Berkshire Hathaway boosted its stake by 315.6%, adding more than 30.5 million shares, says S&P Global Market Intelligence. That's Buffett's biggest move on a percentage basis during the quarter.
Too bad the stock has been a disaster. It's down another 12.2% just this year. And that's after falling 6.3% in 2023. And don't expect the fundamentals to bail it out, either. The company is only seen making 30 cents a share in 2024, down more than 6% from 2023. Luckily he only owns 1% of the company.
But Buffett is also adding to his position in sagging shares of Liberty Sirius. Berkshire Hathaway bumped up its holdings more than 17%. Now Buffett's company owns 24% of Liberty Sirius. And that's not something to be proud of lately. Shares dropped nearly 27% in 2023 and are lagging the S&P 500 this year, too.
Running Out Of Gas
While other investors are making a fortune on stocks like Nvidia, Buffett is loading up on a laggard like Chevron. Berkshire Hathaway added more than 14% to its position in the energy giant. That takes Berkshire Hathaway's ownership position to nearly 7%. Too bad the stock is only up 3.7% this year. And that's after losing nearly 17% in 2023.
Again, fundamentals aren't great at Chevron either. Analysts think the company's earnings per share will fall another 2% this year to $12.86. Not exactly the kind of growth today's investors are looking for.
Don't assume Buffett holds forever. Even Buffett isn't afraid to lighten up on positions that are not working. He finally dumped 32% of his position in Paramount Global during the quarter. And that's only after the Hollywood studio's shares dropped 15% this year and 12% in 2023.
But maybe with the stocks he's being patient with, Buffett knows something everyone else is missing?
Buffett Adds To Lagging Stocks
Largest % purchases by Berkshire Hathaway in the fourth quarter
| Company | Symbol | 2023 % stock ch. | YTD stock ch. | Berkshire Hathaway ch. to portfolio | Sector |
|---|---|---|---|---|---|
| Sirius XM Holdings | -6.3% | -12.2% | 315.6% | Communication Services | |
| Liberty SiriusXM | -26.9% | 5.1% | 17.48 | Communication Services | |
| Chevron | -16.9% | 3.7% | 14.37 | Energy | |
| Liberty SiriusXM | -26.5% | 4.3% | 12.25 | Communication Services | |
| Occidental Petroleum | -5.2% | 0.3% | 1.77 | Energy | |
| S&P 500 | SPY | 24.3% | 5.6% |
