Fueled up on more Chevron

Buffett increased his investment in integrated energy giant Chevron by 33%, adding more than 9.5 million shares during the quarter. Berkshire’s total stake in the company is now valued at roughly $4.5 billion.

Recently, Chevron shares blasted off to hit a new all-time high, just shy of $140. But despite the recent run, the shares continue to be modestly valued at just 17 times trailing earnings. With a 4.2% dividend yield and secular trends in its favor, it's not a big mystery as to why Buffett added to his stake.

Oil prices have been rocketing higher of late, and Buffett was one of many to get in well before prices had a chance to take off. With oil prices eclipsing $100 per barrel, Chevron certainly has the wind at its back.

Chevron's latest quarter revealed a lot to be excited about. Most notably, Chevron's capital expenditures have been on the retreat, while higher oil prices propelled the firm into profitability.

Though oil prices are volatile and difficult to predict, Chevron seems to have the financial muscle to absorb the shock of any near-term pullback in the price of oil.

Big energy has momentum and value by its side. Buffett followers should take notice of the man's one-third top-up.

Fundrise helps you invest in real estate without having to buy a house. Let their state-of-the-art technology and in-house experience open the door to new opportunities today.

Sign up

Buffett bought Activision Blizzard before Microsoft did

Another intriguing move by Buffett was his stake in Activision Blizzard — valued at around $975 million as of the end of 2021 — before Microsoft announced its plans to buy it for $69 billion.

Indeed, the timing of Buffett's investment raised some eyebrows in the financial media. Berkshire had to clear the air, dismissing any possession of insider information held prior to the transaction.

Buffett is famous for his value investing approach. Activision was a beaten-down video-game giant that was dragged lower over reputational concerns — all issues that were likely to be sorted out with time. As a long-term investor, Buffett is more than willing to take a chance on high-quality businesses that are being beaten down by near-term noise.

For now, regulators will have many looks at the potential deal.

Should the deal go through, Activision shareholders can expect $95 per share — another 17% increase from current levels. Activision's management structure can also be expected to see further change once it shifts over the hands of Microsoft.

Buffett sold Visa and Mastercard; bought shares of Brazilian fintech

Buffett further reduced his stakes in Visa and Mastercard in the fourth quarter by 13% and 7%, respectively.

The valuation on the pair of stocks had become stretched through most of 2021.

Even after recent turbulence, shares of Visa trade at over 35 times trailing earnings. Mastercard trades at over 40 times earnings. That's particularly lofty, especially given the intensifying competition from many up-and-coming disruptors in the payments space.

Perhaps it’s no surprise that Berkshire took a $1 billion stake in tech-savvy Brazillian neobank Nu Holdings during the quarter, as well.

To be sure, Buffett is known for being somewhat averse to tech stocks. Ted Weschler and Todd Combs, Buffett’s trusted investment lieutenants, might actually be the ones positioning Berkshire for the fintech wave.

While commercial real estate to has always been reserved for a few elite investors, outperforming the S&P 500 over a 25-year period, First National Realty Partners allows you to access institutional-quality commercial real estate investments — without the leg work of finding deals yourself.

Get started

Buffett completely reverses course on drug stocks

Buffett also drastically cut stakes in several biotech stocks that he had purchased relatively recently.

In Q4, Berkshire slashed its investment in both Bristol Myers Squibb and AbbVie by more than 75%. Moreover, it completely exited its position in perennial underperformer Teva Pharmaceuticals.

Berkshire also gave up on holding company Royalty Pharma in a hurry, cutting its stake by 34% during the quarter. The position was just initiated in Q3.

More from MoneyWise

Pour your portfolio a glass of recession resistance

Fine wine is a sweet comfort in any situation — and now it can make your investment portfolio a little more comfortable, too.

Ownership in real assets like fine wine could be the diversification you need to protect your portfolio against the volatile effects of inflation and recession. High-net-worth investors have kept this secret to themselves for too long.

Now a platform called Vinovest helps everyday buyers invest in fine wines — no sommelier certification required.

Vinovest automatically selects the best wines for your portfolio based on your goals, and it tells you the best times to sell to get the best value for your wine.

About the Author

Joey Frenette

Joey Frenette

Staff Writer

Joey Frenette is a freelance contributor to MoneyWise.

What to Read Next

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.