Warren Buffett’s Q4 portfolio shifts: New bet on Constellation, Apple sales paused

Notable Highlights:

• New Bet: Constellation Brands (STZ) – A $1.2B investment in a top alcohol brand known for its strong pricing power and steady dividend (1.5%).
• More Energy Exposure: Added Occidental Petroleum to total 264.2M shares ($13.05B)—continuing his long-term bullish stance on oil and gas.

Reductions:

Notable Highlights:

• Biggest Cut: Citigroup -73% - Buffett’s largest financial trim this quarter, marking a sharp retreat from big banks.
• More Bank of America Selling: -14.7% of BAC, continuing from Q3 and totaling a 23.7% reduction over two quarters.

Exited Positions Entirely:

• Ulta Beauty: Sold out completely after a short-lived investment.
• SPY (S&P 500 ETF) and VOO (Vanguard S&P 500 ETF): Fully exited both S&P 500 ETFs, possibly signaling concerns about high market valuations and the relevance of active investing.

Key takeaways from Q4 2024:

Cash Pile Nears $325 Billion

• Buffett’s legendary cash reserves continue to grow, now estimated at close to $325 billion, up from a record $150 billion just 18 months ago.
• High interest rates mean this cash hoard is earning significant income while Buffett remains patient for bigger opportunities.

Finally Done Selling Apple

• After four quarters of trimming his largest holding, Buffett paused, holding steady at 300M shares ($75.1B), still 28% of Berkshire’s portfolio, down from 51% before his sales.
• Buffett previously suggested these sales were for “tax purposes”, not a lack of confidence in Apple’s long-term prospects.

New Bet on Constellation Brands: A Play on Strong Brands and Cash Flow

• Buffett’s $1.2B bet on Constellation Brands signals confidence in the alcohol sector’s pricing power and stable demand.
• The company has a 1.5% dividend yield, and its Modelo brand is now the #1 beer in the U.S. - making this a potential long-term compounder.

Still Cooling on Financial Stocks

• Massive Cut in Citigroup (-73%) and continued trimming of Bank of America (-14.7%) highlight his shrinking enthusiasm for big banks.
• Financial and tech stocks still make up 65.68% of Berkshire’s portfolio, but Buffett is clearly narrowing his exposure to weaker players.

Dumped S&P 500 ETFs – A Signal on Market Valuations?

• While the SPY and VOO positions were small, selling them completely could reflect Buffett’s view that broad-market valuations are stretched.
• The S&P 500’s P/E ratio is well above its historical average, possibly making it less attractive than hand-picked individual stocks.

Buffett Loves Dividend Stocks, Still

• Nine of his top 10 holdings pay dividends, emphasizing his focus on cash-generating businesses. Below are the 12-month dividend yields of his top holdings:
  • Apple: 0.41%
  • American Express: 0.90%
  • Bank of America: 2.13%
  • Coca-Cola: 2.82%
  • Chevron: 4.25%
  • Occidental Petroleum: 1.83%
  • Moody’s: 0.65%
  • Kraft Heinz: 5.53%
  • Chubb: 1.36%

  Saxo’s Dividend growth theme basket includes a curated list of stocks that have shown over a long period to consistently grow dividends.

  ---

  Final takeaways: Buffett’s market outlook for 2025

• Patience is Key: With cash near $325B, Buffett is clearly waiting for bigger opportunities.
• Selective Buying: Adding Constellation Brands signals confidence in consumer staples with pricing power.
• Cautious on Valuations: Dumping S&P 500 ETFs may hint at skepticism about broad market valuations.
• Loyal to Quality: Apple remains his top bet, and dividends remain a cornerstone of his strategy.

Explore our curated shortlist featuring Warren Buffett's holdings here, providing you an opportunity to invest directly in the stocks favored by the Oracle of Omaha.