Warren Buffett is one of the most closely watched investors of all-time. His long-term track record has built him an empire and a huge following of investors that try to emulate his every step.
Every quarter Buffett is required to release a 13F report listing all of his holdings, and investors eagerly look through his holding and look to duplicate his investing strategy into their own portfolio. Buffett's strategy is pretty straight forward. Invest in companies you know, companies with big moats, and companies that you expect to hold for a lifetime.
Buffett does not look for stocks that he can get in and out of quickly. That is not his style. Buffett looks for solid long-term holdings, and if you are looking for a group of possible stocks to buy and hold indefinitely you may want to consider the biggest stocks in Buffett's portfolio.
Here are four of his biggest holdings for consideration.
Bank of America (BAC)
As of the end of the third quarter, Buffett reported holding 927.3 million shares of Bank of America (BAC) stock. BAC stock has been a top performer in 2019 with shares up 33.5% year to date. Bank of America has shown impressive earnings growth of 23% per annum over the last five years but looking ahead analysts expect profits to rise at just 8.1% on an annual basis over the next five years. The low earnings growth forecast is reflected in the stock trading at just 11 times future earnings. Wall Street is already pricing in the low growth so as long as the company is able to hit or exceed future earnings projections the stock should remain strong. Analysts have a $33.81 price target on the stock.
Coca-Cola (KO)
Buffett's quarterly report shows a holding of 400 million shares of soft drink giant Coca-Cola (KO). KO stock has performed well in 2019, and shares are currently up 12% on the year. Buffett is a very long-term holder of Coca-Cola. Despite a consumer shift away from sugary soft drinks the company has managed to grow earnings at a modest 1.9% annual rate over the last five years and looking ahead analysts expect to see profits rise at 4.7% per annum over the next five years. Last quarter the company posted in-line earnings and slightly better than expected quarterly revenue, marking the 13th straight revenue beat. KO is trading at 29 times earnings, which is a bit high considering its earnings growth, but Wall Street remains upbeat on the stock and shares should remain strong as long as no negative quarterly numbers emerge. Analysts have a $57.50 price target on the stock, which currently trades at $53.00.
Wells Fargo (WFC)
As of September 30, Buffett reportedly held 378.4 million shares of financial giant Wells Fargo (WFC). WFC has appreciated 17.2% since the start of the year. The financial sector has been strong during the bull market, and WFC stock is currently trading just shy of its all-time high. Earnings have risen at a modest 2.2% per annum over the last five years but looking ahead analysts expect a stronger growth of 8% per annum over the next five years. The stock trades at a low valuation of 11.6 times earnings, which suggests the stock has additional upside potential as long as the company is able to consistently hit or exceed earnings estimates. Last quarter the bank posted a big earnings miss, but sales were well above the consensus and Wall Street pushed shares higher. Moving forward the company will need to deliver better bottom-line numbers for the stock to continue to build on its current momentum and analyst to lift their price targets. The stock is trading at $54.10 with a $51.24 average price target.
Apple (AAPL)
Tech titan Apple (AAPL) remained a top holding of Buffett at the end of the third quarter, with the Oracle of Omaha reportedly holding a whopping 248.8 million shares of the iPhone maker. AAPL has been a standout stock in 2019 with shares rising 69% on the year. Apple's recent strength stems from the company's ability to show strong growth in its services division. With iPhone sales waning, the company has put its focus on building its services, and strong growth has brought big enthusiasm into the stock. The company has managed to grow its earnings at an annual rate of 8.4% over the last five years and looking ahead analysts expect to see an additional growth of 9.9% per annum over the next five years. Apple remains a darling of Wall Street and is currently trading at an all-time high of $268.00, with shares trading at 17 times future earnings. Analysts have put a $258.23 average price target on the stock.
