Warren Buffett’s Latest Moves: Uncovering the Hidden Gem
The Oracle of Omaha, Warren Buffett, has been quietly reshaping his investment portfolio. In the third quarter, Berkshire Hathaway sold off stocks for the eighth consecutive quarter, including a significant reduction in its Apple stake. However, Buffett and his team still managed to put some of their massive cash reserves to work, buying into four new stocks.
A Slice of the Action: Domino’s Pizza
Berkshire initiated a new position in Domino’s Pizza, purchasing 1.28 million shares worth $549.4 million. This move marks a significant addition to their portfolio, with Domino’s being the largest new investment of the quarter.
Diving into Pool Corporation
Berkshire also took the plunge into Pool Corporation, buying over 404,000 shares valued at nearly $152.3 million. This move signals a growing interest in the swimming pool supplies distributor.
Boosting Existing Holdings
In addition to these new investments, Berkshire increased its stakes in two existing holdings. The conglomerate upped its position in satellite radio operator Sirius XM Holdings by 6.99%, partly due to the merger with Liberty SiriusXM Holdings. Berkshire also boosted its stake in Heico, an aerospace and electronics company, by 0.52%.
A Year of Ups and Downs
When looking at performance this year, Heico stands out with a remarkable 50% gain. Domino’s follows closely with a 5% increase, while Pool and Sirius XM have seen declines of around 10% and 53%, respectively.
Valuation Check
However, when examining valuations, the picture changes. Sirius XM Holdings boasts a forward price-to-earnings ratio of 7.3, making it a bargain. Domino’s follows with a forward earnings multiple of 24.3, while Pool is somewhat more expensive at 29.8 times forward earnings. Heico stands out with a sky-high forward earnings multiple of 63.7.
Analysts’ Insights
Sirius XM is expected to increase its earnings by a whopping 150.9% next year, according to analysts. Heico is projected to grow its earnings by 16.8%, while Pool and Domino’s trail behind with expected earnings growth of 9.3% and 5.6%, respectively.
Dividend Delights
All four stocks offer dividends, with Sirius XM’s forward yield of 4.2% being particularly enticing. Domino’s and Pool follow closely with forward dividend yields of 1.4% and 1.3%, respectively, while Heico’s yield is a mere 0.08%.
The Best of the Bunch
While Domino’s is an attractive long-term hold, Sirius XM Holdings stands out as the top pick among Buffett’s recent buys. Its growth prospects, value, and juicy dividend make it an attractive choice for income and value investors.
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