Warren Buffett's Top 3 Stocks: Portfolio Allocation To This Sector Increased In Q4

The finance sector commands just over 24% of Warren Buffett‘s Berkshire Hathaway BRK BRK portfolio. That’s an increase from 21.75% from the previous quarter.

As for other sector allocations:

• Technology is down from 51.46% in Q3 to 51% in Q4.
• Consumer staples is down from 11.37% in Q3 to 10.92% in Q4.
• Energy sector is down from 10.58% to 9.60% in Q4.
• Healthcare allocation maintained at 1.09%
• Consumer discretionary 0.77% to 0.62%
• Communications 2.61% in Q3 to 2.37% in Q4

Also Read: ‘Hallelujah’ For Shale – Why Warren Buffett Likes American Oil Companies

Warren Buffett’s Top 3 Stocks: Finance

With his portfolio tilt rising toward the financial sector, investors may want to know the top three finance stocks that command the maximum allocation:

1. Bank of America BAC: Bank of America stock commands a 9.03% weight in the Berkshire Hathaway portfolio. Buffett bought the holding in 2017, and now owns 12.81% of the company’s outstanding shares. Bank of America stock currently has an average one-year price target of $40.48, representing an expected upside of 19.69%. No analysts have bearish recommendations on Bank of America, while six analysts have bullish ratings. The street high price target from Oppenheimer is $50, while the street low from Goldman Sachs is $33.
   
2. American Express AXP: The New York-based company has been a holding in the Berkshire Hathaway portfolio since 2001. With over 20% ownership, Buffett’s stake in the company has American Express stock to dominate an 8.18% allocation in the Berkshire portfolio. American Express's revenue has grown at an average rate of 9.88% annually over the past 5 years. Shares of American Express have seen an annualized return of 17.62%, outperforming the S&P 500 index by 7.68%. This compares to 9.01% growth in the overall Financials sector. However, the average 1-year price target from analysts is $205.8, representing an expected -5.25% downside in 2025.
   
3. Moody’s MCO: Moody’s commands a 2.77% portfolio allocation and with it, Buffett owns 13.31% of the company’s outstanding shares. Moody’s has been a part of the Berkshire Hathaway portfolio since 2001. For Moody’s stock, the 200-day moving average sits at $348.55, according to Benzinga Pro, which is below the current price of $384.67. When a stock is above its moving average, it is a generally bullish signal. However, the average one-year price target from analysts is $329.33, representing an expected -14.41% downside in 2025.

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