Warren Buffett’s Berkshire Hathaway has made notable adjustments to its investment portfolio, signaling a strategic shift as it navigates market valuations and economic uncertainties. In a regulatory filing released on Friday, Berkshire disclosed a new stake in alcoholic beverage producer Constellation Brands while significantly trimming its holdings in major financial institutions, including Citigroup and Bank of America.
A New Bet on Alcohol
Berkshire ended 2024 with 5.62 million shares of Constellation Brands, valued at approximately $1.24 billion. This new investment reflects confidence in the company, which distributes some of the most popular beer brands in the United States, including Corona and Modelo Especial. Modelo, notably, overtook Bud Light as the country’s top-selling beer in 2023. Constellation’s wine portfolio also includes well-known names like Meiomi, Robert Mondavi, and Kim Crawford.
Following the announcement, Constellation’s shares surged 6.7% in after-hours trading, underscoring the weight of Buffett’s endorsement in the investment community.
Banking Sector Reductions
Berkshire Hathaway significantly reduced its exposure to the banking sector in the fourth quarter of 2024. It slashed its stake in Citigroup by 74% to 14.6 million shares and trimmed its Bank of America holdings by 15% to 680.2 million shares. This marks a continued divestment from Bank of America, with Berkshire having reduced its stake by one-third since July, when it held 1.03 billion shares. Despite the reduction, Bank of America shares have risen more than sixfold since 2017, when Berkshire exercised warrants at $7.14 per share.
Further sell-offs included cuts in stakes of Capital One and Brazilian fintech company Nu Holdings, reinforcing Berkshire’s cautious approach toward financial stocks.
No More Apple Sales—For Now
While Berkshire previously sold off a staggering $133.2 billion worth of stock between January and September 2024—predominantly from Apple—the latest filing reveals that the company has paused these sales. Apple remains Berkshire’s largest common stock investment, valued at $75.1 billion as of Dec. 31.
This shift suggests Berkshire may be reassessing Apple’s long-term value after unloading 490 million shares earlier in the year. Apple’s continued market dominance and technological advancements likely played a role in the decision to hold onto its remaining stake.
Other Notable Moves
In addition to its banking sector cutbacks, Berkshire fully exited its position in Ulta Beauty, a cosmetics retail chain it had owned for less than a year. Conversely, Berkshire increased its investment in Domino’s Pizza, boosting its stake by 86% in Q4. This aligns with Berkshire’s tendency to favor consumer-driven brands with strong market positioning.
Berkshire’s Strategy Amid Market Uncertainty
Berkshire Hathaway’s latest investment activity highlights a broader strategy of value-driven decision-making, with a focus on long-term growth opportunities. The company’s decision to step back from financial stocks while investing in resilient consumer brands such as Constellation and Domino’s suggests a shift towards more defensive holdings.
The full extent of Berkshire’s financial health and strategic direction will be detailed in its annual report, set for release on February 22. With a cash reserve of $325.2 billion, Buffett and his team continue to have ample liquidity to make further strategic investments.
As always, Buffett’s moves are closely watched by investors worldwide, providing key insights into broader market trends and the principles guiding one of the world’s most successful investment firms.
