Berkshire Hathaway’s Common Stock Portfolio Substantially Outperformed the S&P 500 in Past Year

The 10 largest common stock investments in Berkshire Hathaway’s portfolio had a one year weighted return of 44% through February 7, 2020. This was almost double the 23% return from the S&P 500 over this time period.

The top 10 stocks represent approximately 80% of the total value of Berkshire’s common stock investments.

8 out of the top 10 stocks rose in the past 12 months, with Apple (+ 87%) and Moody’s (+ 66%) having the largest percentage price increases. Only Kraft Heinz (-37%) and Wells Fargo (-1%) declined in price.

Since Berkshire’s portfolio of $220 billion represents about 40% of its $550 billion market capitalization, and Berkshire appreciated by only 13% in the past 12 months, this is an indication of Berkshire being undervalued.

The one year rate of return on Berkshire’s top 10 stock holdings as of February 7, 2020:

(1) Apple (Berkshire’s current investment: $80 billion) + 87%

(2) Bank of America ($33 billion) +23%

(3) Coca-Cola ($24 billion) +20%

(4) American Express ($20 billion) +26%

(5) Wells Fargo ($18 billion) – 1%

(6) Kraft Heinz ($10 billion)  – 37%

(7) JPMorgan Chase ($8 billion) +34%

(8) U.S. Bancorp ($7 billion) +7%

(9) Moody’s ($7 billion) +66%

(10) Goldman Sachs ($4 billion) + 23%

1 year weighted return on the top 10 stocks  +44%

1 year rate of return on S&P 500  +23%

1 year rate of return on Berkshire Hathaway  +13%