Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), led by renowned investor Warren Buffett, regularly updates shareholders with their current quarterly holdings. In the first quarter of 2023, the company reported changes made by Buffett and his investment officers, Todd Combs and Ted Weschler. These investments were disclosed as of March 31, 2023, pursuant to the 13F regulatory filing with the SEC.
If you’re considering improving your approach to investment, taking Buffett’s guidance might be a wise choice. Here are three of Warren Buffett’s favorite stocks in the first quarter of 2023.
Capital One Financial (COF)
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Berkshire Hathaway added Capital One Financial (NYSE:COF) to its portfolio during the quarter, amid the regional bank crisis that caused a decline in bank stocks. As of March 31, 2023, Berkshire held over 9.9 million shares in Capital One, valued at $954 million.
Capital One specializes in providing credit cards and auto loans, but has also earned recognition for innovation. The company was featured in Fast Company’s 2023 Most Innovative Companies list for both business services and travel and hospitality. According to Fast Company’s Lydia Dishman, Capital One launched a business to business software in June 2022 that enables other large companies to use cloud and data management tools integral to their transformation into a cloud-based business.
Holdings of COF stock increased following Berkshire Hathaway’s reveal of its nearly $1 billion stake in the credit cards-focused bank. After a few weeks of losses, the price of the shares increased to highs not seen since the beginning of May.
Occidental Petroleum (OXY)
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Considering the low energy costs, Occidental Petroleum (NYSE:OXY) had a great first quarter, generating exceptional free cash flow of $1.7 billion, or a yearly dividend of 13% to 14%. The company is expected to continue on an upward trend, potentially increasing buybacks and dividend payouts for shareholders.
Warren Buffett’s Berkshire Hathaway reportedly invested around $130 million in Occidental Petroleum equities as a component of its strategy to increase its stake in the oil giant.
In March, Berkshire purchased shares of Occidental Petroleum on two separate occasions. As an outcome, they now hold about a 23.6% share in the business, that’s worth $13 billion. Berkshire also has $10 billion in preferred stock and warrants to acquire $5 billion more shares at $59.62. There are speculations that Berkshire may eventually acquire over 50% of Occidental and potentially take over the entire company.
Occidental Petroleum concluded 2022 with robust proven reserves of 3.8 billion barrels of oil equivalent, reflecting a solid reserve foundation. The business has a strong asset inventory and is in a good position to produce profits for its investors.
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Considering Apple (NASDAQ:AAPL) a unique blend of tech and consumer companies, AAPL stock started to enter Warren Buffett’s portfolio in 2016. He was impressed with the company’s popularity among his grandchildren who would spend hours on their iPhones. Buffett has also praised Apple’s CEO, Tim Cook.
Apple meets the investment standards of Buffett, including having a recognizable brand, a strong market position, reasonable valuations and an efficient capital return program. The business also boasts an outstanding staff of executives with a track record of paying dividends and purchasing shares to investors. Additionally, Apple has an impressive profit and loss profile in tech, with high gross and operating margins and a large net cash balance.
Apple’s robust brand strength enables it to command higher prices and its financials have been consistently strong. The company has been a historically profitable investment and the recent increase in iPhone sales in Q1 2023 has boosted its revenue. Despite a downturn in the U.S. market, Apple’s global brand recognition has helped mitigate the impact of declining iPhone sales domestically.
During Q2 2023 Apple achieved a revenue of $94.8 billion. Although the economic situation was challenging, Apple still set a record in services revenue. Additionally, the company saw a record March quarter in iPhone sales, generating $51.33 billion in revenue.
On the date of publication, Chris MacDonald has a position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.