Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (BRK.B) opened a new position in Capital One Financial (COF) in the first quarter by buying over 9.9 million shares worth nearly $954 million, as per the latest 13-F SEC filing. Shares of Capital One rose about 6% in Tuesday’s pre-market trading. Meanwhile, Berkshire exited four stocks, including two bank stocks, amid the regional banking turmoil.
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Berkshire’s Top Picks and Drops in Q1
Aside from Capital One, Berkshire also opened a new position in alcoholic beverage maker Diageo (DEO), which owns brands like Johnnie Walker and Guinness. It bought 227,750 shares of Diageo in Q1, worth $41.3 million.
Berkshire also upped its stake in certain stocks, including Apple (AAPL), Bank of America (BAC), Occidental Petroleum (OXY), HP (HPQ), Paramount Global (PARA), and Citigroup (C). At the recently held annual meeting of Berkshire, the Oracle of Omaha praised Apple, saying, “It just happens to be a better business than any we own.” Berkshire increased its holdings in AAPL stock from 895.1 million shares to 915.6 million shares.
In contrast, Berkshire reduced its holdings in some stocks, like Chevron (CVX), General Motors (GM), Amazon (AMZN), and Activision Blizzard (ATVI). Oil giant Chevron continues to feature among the top five holdings of Berkshire even after the latter reduced its holdings from nearly 163 million shares to over 132 million shares in Q1.
Berkshire completely exited its positions in four stocks – Bank of New York Mellon (BK), US Bancorp (USB), chipmaker giant Taiwan Semiconductor Manufacturing Company or TSMC (TSM), and home furnishings company RH (RH), formerly known as Restoration Hardware. At Berkshire’s annual meeting, Buffett praised Taiwan Semiconductor, calling it “one of the best-managed companies and important companies in the world.” However, he highlighted geopolitical concerns associated with the company.
Overall, Berkshire was a net seller of stocks in the first quarter, which continued to be impacted by macro pressures. It bought shares worth $2.9 billion and sold shares amounting to $13.3 billion in Q1.
Berkshire’s Top Five Holdings
Here are Berkshire’s top five holdings as of the end of Q1. These five stocks (Apple, Bank of America, American Express (AXP), Coca-Cola (KO), and Chevron) accounted for 77% of Berkshire’s stock portfolio as of March 31, 2023.
Let’s now take a look at Wall Street’s rating for Berkshire’s new holding Capital One.
Is Capital One a Good Stock to Buy?
Capital One Financial claims to be the third-largest credit card company in the U.S. Last month, the bank reported lower-than-expected Q1 revenue and earnings. Its provision for credit losses increased $379 million to $2.8 billion, reflecting weak macro conditions. Nonetheless, COF shares have been resilient and have declined 4% year-to-date compared to the 26.1% drop in the KBW Bank Index due to the regional banking crisis.
Wall Street’s Moderate Buy consensus rating on Capital One is based on seven Buys, four Holds, and two Sells. The average price target of $111.27 implies 25% upside potential.
Learn more about Berkshire’s holdings here. Also, retail investors can leverage TipRanks’ Experts Center tool to identify stocks with the potential to outperform the broader market.
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