Warren Buffett’s Berkshire Hathaway BRK.A BRK.B has released its 13F for the fourth quarter of 2024. Here’s a look at the stocks that the team bought and sold during the fourth quarter and a few undervalued Warren Buffett stocks to buy from Berkshire Hathaway’s portfolio today.
Warren Buffett and his team initiated a position in one new stock last quarter: Constellation Brands STZ. The stock slumped in 2024 as consumers pulled back on alcoholic beverage spending; the stock is down 25% in 2025 after the company reported weak results. But with its portfolio of top-selling Mexican beer brands, including Corona and Modelo, we think the company has carved out a wide economic moat. The stock pullback has allowed Berkshire to pick up this high-quality company at what we consider to be an attractive price.
Berkshire also added to its positions in Domino’s Pizza DPZ and Pool Corp POOL, both of which were new additions to the portfolio in 2024’s third quarter. Buffett boosted Berkshire’s existing positions in Occidental Petroleum OXY, Verisign VRSN, and Sirius XM SIRI last quarter, too—and regulatory filings show that Berkshire has continued buying these three names in 2025, as well.
Berkshire began accumulating its current position in Oxy about three years ago and currently owns more than 28% of the company. Although Buffett has stated that Berkshire has no intent of buying the company outright, he did refer to Oxy in Berkshire’s shareholder letter last year as one of his “Rip Van Winkle” investments, suggesting that it’s a name Berkshire will own indefinitely. Berkshire likes the company’s vast oil and gas holdings in the United States and its leadership in carbon-capture initiatives.
Meanwhile, Berkshire has owned Verisign stock since 2012. Verisign is also a classic Buffett investment, as it maintains a monopoly position to register websites with .com and .net top-level domains with fixed pricing terms. Morningstar thinks the company has a wide economic moat.
Buffett hasn’t commented on Berkshire’s growing Sirius XM stake publicly as of this writing, even though Berkshire now owns well over a third of the company’s stock. Some may consider Sirius XM a monopoly in its own right, given that access to the service is standard in most new vehicles being sold today.
But Morningstar doesn’t think the company has an economic moat. “In our view, Sirius XM is fighting an uphill battle as the technology that once gave it a unique offering and an advantage over competition is no longer a necessity to offer a subscription service in vehicles,” says Morningstar senior analyst Matthew Dolgin. “We now see Sirius XM’s primary competition coming from streaming music providers that rely on internet connectivity rather than from terrestrial radio stations, and we believe those services provide the better value proposition for most consumers.”
That being said, Sirius XM does fit the mold as a blood-in-the-streets investment that Buffett could warm to: The stock was down 56% in 2024.
Berkshire continued to scale back its position in Bank of America during the fourth quarter—it began selling the bank’s shares in July last year. Berkshire’s now owns less than 10% of Bank of America, but the bank still remains among Berkshire’s holdings. It also sold nearly three fourths of its position in Citigroup C.
Berkshire also reduced its stake in several other names during the fourth quarter, including Capital One Financial COF, Charter Communications CHTR, Liberty Media Corp C Liberty Formula One FWONK, Louisiana Pacific LPX, NU Holdings NU and T-Mobile TMUS. Berkshire sold out of Ulta Beauty ULTA entirely after initiating the position in the second quarter of 2024.
4 Warren Buffett Stocks to Buy Now
Most of the publicly traded stocks held by Berkshire Hathaway are fairly valued or overvalued today, according to Morningstar’s metrics. Here are several of its holdings that look undervalued and most attractive according to Morningstar’s analysts.
Here’s a little bit about why we like each of these stocks at these prices, along with some key metrics for each. All data is as of Feb. 14, 2025.
Ally Financial
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: None
- Morningstar Capital Allocation Rating: Standard
- Industry: Credit Services
Berkshire Hathaway owns more than 9% of Ally Financial’s stock. While Ally offers auto insurance, commercial lending, mortgage finance, and credit cards, auto loans remain its core focus and largest source of revenue. While a slower auto market and higher credit costs have weighed on recent results, Ally’s improved funding structure should lead to better returns than the firm has historically delivered. The stock trades 19% below our $46 fair value estimate.
Here’s what Morningstar analyst Michael Miller had to say about the stock after the company’s fourth-quarter earnings release:
Ally Financial reported solid earnings with adjusted EPS coming in at $0.78 versus $0.40 last year. This was largely due to lower operating and credit costs as total adjusted revenue only increased 3.6% over the same period. Ally also announced that it will be selling its credit card portfolio.
Why it matters: Ally appears to be turning a corner after a string of poor results in 2023 and 2024. The market is responding favorably to this shift, with the shares up around 4% on earnings.
- Credit costs have been a major headwind for Ally recently, with the bank’s warning on future net charge-offs being responsible for a major correction in the shares last fall. However, the bank’s tighter underwriting is beginning to have an effect.
- Credit costs are still higher than we would like, with auto net charge-offs rising to 2.34% of total loans from 2.21% last year. However, auto delinquency rates are showing better trends, and used car prices have stabilized, supporting the value of Ally’s collateral.
The bottom line: We maintain our $46 fair value estimate for no-moat Ally and view the shares as modestly undervalued as we believe the market is underestimating the firm’s long-term profitability.
- We expect net charge-offs to begin to trend lower in the second half of 2025, though provisioning costs could decline sooner if the firm gains the confidence to release reserves.
- We still have mixed feelings about the sale of Ally’s credit card business as it will reduce the long-term growth potential of the firm. That said, the move will likely improve Ally’s near- to medium-term performance.
Long view: We hold a positive long-term view of Ally’s earnings potential despite its recently unimpressive results. We expect the firm’s net interest margin to expand further as its loan book continues to roll off into new higher-yielding loans and the firm gets more aggressive on deposit rates.
Read Morningstar’s full report on Ally Financial.
Constellation Brands
- Morningstar Rating: 5 stars
- Morningstar Economic Moat Rating: Wide
- Morningstar Capital Allocation Rating: Standard
- Industry: Beverages—Brewers
Constellation Brands has carved out a wide moat with its portfolio of top-selling Mexican beer brands that underpin strong brand equity and tight distributor partnerships, explains Morningstar analyst Dan Su. We expect the company’s beer brands to fuel growth, while the turnaround with its wine and spirits will take time. The stock is trading 40% beneath our $274 fair value estimate.
Here’s Su’s take on Constellation Brands after its recent earnings release:
Shares of wide-moat Constellation Brands plunged over 17% after its weaker-than-expected fiscal third-quarter results, driven by frugal consumers scaling back alcoholic beverage spending. As a result, revenue remained flat at $2.5 billion, buoyed by a slowing 3% increase in beer sales (82% of sales). Challenges in the wine and spirits portfolio persisted, with sales dipping 14% during the quarter. Meanwhile, adjusted earnings per share remained unchanged from the prior year as cost efficiencies offset rising marketing investments. Ultimately, management lowered its full-year outlook for net sales growth to 2%-5% from 4%-6% and for adjusted EPS to $13.40-$13.80 from $13.60-$13.80. After nudging down our 6% and $13.76 respective estimates, we plan on reducing our $291 fair value estimate by a mid-single-digit percentage, leaving shares undervalued. We think our 10-year forecasts for 6% sales growth and 32% operating margin remain within reach, thus the moderate fair value change relative to share price movement. We remain constructive on the firm’s long-term outlook, given the strong brand equity of its Mexican beers and premiumization tailwinds.
Constellation’s beer portfolio remains a key strength, with volumes growing 1.6% and sequential depletion improving to 3.2%, from 2.4% last quarter. Modelo Especial and the emerging Pacifico brand stood out, posting 3% and 20% depletion growth, respectively, which we surmise continues to benefit from the double-digit shelf space gains achieved last year. Beer operating margins fell 60 basis points to 37.9%, in line with our expectations for softer second-half results, but we still believe the firm can close the year near 39% despite increased investment.
The firm’s struggling wine and spirits segment remained under pressure from inventory destocking, driving a 16.4% volume decline. Operating margin fell 333 basis points to 22.2%, and we expect the firm to end the year near the 20% mark amid further marketing investments.
Read Morningstar’s full report on Constellation Brands.
Kraft Heinz
- Morningstar Rating: 5 stars
- Morningstar Economic Moat Rating: Narrow
- Morningstar Capital Allocation Rating: Standard
- Industry: Packaged Foods
Berkshire Hathaway owns more than 26% of Kraft Heinz’s stock. The packaged-food manufacturer has revamped its road map and is now focused on consistently driving profitable growth. We think Kraft Heinz stock is worth $56 per share, and shares are trading at a 48% discount to that fair value today.
Here’s what Morningstar director Erin Lash thinks of Kraft Heinz’s fourth-quarter results:
Kraft Heinz’s fourth-quarter marks left a bitter taste, with shares down a low-single-digit percentage. While its adjusted operating margin jumped 90 basis points to 21.1%, organic sales tumbled 3% on a 4% volume slump.
Why it matters: The prognosis for packaged food firms has soured on concerns around the appetite for less healthy center-store fare, the potential changes the new administration could enact, and the financial wherewithal of consumers.
- While these challenges are real, we think Kraft Heinz’s plight is concentrated in a few select brands (Lunchables, mayonnaise, macaroni and cheese, and Capri Sun), with investments in flavors and pack sizes already hitting shelves.
- Kraft Heinz boosted spending on research and development—wedded in data and analytics—a mid-single-digit percentage last year, recorded a high-single-digit bump in marketing, and increased technology investments 15%, which we applaud.
The bottom line: Our $56 fair value estimate for narrow-moat Kraft Heinz should fall by a mid-single-digit percentage after incorporating another year of depressed organic sales and profits in fiscal 2025.
- However, we view shares as a steal at a 40% discount to our intrinsic valuation while offering a 5% dividend yield.
- We surmise the market is reluctant to believe its strategic pivot (abandoning its pursuit of margin gains at any cost in favor of prudently investing in its brands and capabilities) that began in 2019 will yield low-single-digit underlying sales growth in time. We see this as feasible.
Between the lines: We don’t expect management will veer off course, by opting to prioritize promotional spending at the expense of investing for the long term.
- Kraft Heinz cited the percentage of volumes sold on promotions in fiscal 2024 was 5% below 2019.
Our forecast calls for 6%-7% of sales ($1.9 billion) to be directed to research, development, and marketing on average annually over our explicit forecast, funded by initiatives to extract inefficiencies.
Read Morningstar’s full report on Kraft Heinz.
Occidental Petroleum
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: None
- Morningstar Capital Allocation Rating: Standard
- Industry: Oil & Gas E&P
Berkshire Hathaway owns 27% of Occidental Petroleum’s stock. Although Oxy is one of the world’s largest independent oil and gas producers, we don’t think it has carved out an economic moat—though we believe it’s on the cusp of earning its cost of capital, adds Morningstar director Josh Aguilar. We assign Oxy a $62 fair value estimate, and shares are trading 23% below that.
Here’s Morningstar’s take on Oxy’s business:
Occidental is one of the world’s largest independent oil and gas producers. Its upstream operations are spread across the US, Middle East, and North Africa. It has a consolidated midstream business, which provides gathering, processing, and transport services to the upstream segment, and it holds a majority equity interest in Western Midstream. The portfolio also includes a chemicals business, which produces caustic soda and PVC. The latter segment benefits from low energy and ethylene costs, while its profitability is determined by the strength of the broader economy.
The $55 billion Anadarko deal was a huge undertaking for Oxy, which itself had an enterprise value of about $50 billion at the time. The cash portion was partly financed with a $10 billion preferred equity investment from Berkshire Hathaway along with the proceeds from the sale of Anadarko’s Mozambique assets, which Total purchased for $3.9 billion in late 2019. While these arrangements left Oxy with a heavy debt burden prior to the pandemic, drastic measures helped management steady the ship, and the firm took full advantage of the subsequent rebound in commodity prices, generating enough cash to fully repair the balance sheet and pave the way for significant capital returns. The firm is obligated to match distributions above $4 per share annually with preferred equity redemptions.
The midstream segment also includes Oxy Low Carbon Ventures, which partners with third parties to implement carbon capture, storage, and utilization projects. This activity differentiates Occidental from most peers, which merely focus on curtailing their own emissions. Oxy’s experience sequestering carbon dioxide for enhanced oil recovery potentially enables it to go further. Management has ambitious plans to develop direct air capture facilities that should also generate incremental revenue.
Finally, Oxy completed the roughly $12 billion CrownRock acquisition on Aug. 1, 2024, which provides with Oxy a high-graded asset portfolio, allowing Oxy to add significant production capacity in the Midland Basin. While this acquisition comes at an elevated capital cost, we think it will help create firmwide operating efficiencies.
Read Morningstar’s full report on Occidental Petroleum.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
