Circle May 15 on your calendars. That's when we should find out all the stocks Warren Buffett bought for Berkshire Hathaway's portfolio during the first quarter of 2025, when the markets were highly turbulent.
However, we don't have to wait until Berkshire's mid-May 13F filing to know at least some of the legendary investor's moves in Q1. We already know that Buffett loaded up on several stocks as the market sank.
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Buffett's international favorites
Sometimes, Berkshire reveals its trades via Form 4 regulatory filings to the U.S. Securities and Exchange Commission (SEC) well before it submits a 13F filing. That's what happened in Q1, with the conglomerate disclosing that it bought additional shares of Verisign in January and Sirius XM Holdings and Occidental Petroleum in early February. I won't discuss these purchases in detail, though, because the S&P 500 wasn't declining when they were made.
The initial market sell-off began later in February as concerns rose about the Trump administration's tariffs. This decline erupted into a full-blown correction in April following the president's announcement of steep reciprocal tariffs on nearly every country. While we don't know yet if Buffett bought stocks in April, he did buy five stocks during the early part of the S&P 500's plunge.
Japanese regulatory filings revealed that Berkshire added to its positions in Itochu(OTC: ITOCF)(OTC: ITOCY), Marubeni(OTC: MARUF)(OTC: MARUY), Mitsubishi(OTC: MSBHF)(OTC: MTSU.Y), Mitsui(OTC: MITSF)(OTC: MITSY), and Sumitomo(OTC: SSUM.F)(OTC: SSUM.Y) in March. All five companies are Japanese trading houses known as "soga sosha."
These stock purchases shouldn't have come as a surprise to anyone. Buffett mentioned the Japanese companies in his annual letter to Berkshire Hathaway shareholders released on Feb. 22, 2025, writing, "Over time, you will likely see Berkshire's ownership of all five increase somewhat."
Why Buffett likes these Japanese stocks
Buffett has been a net seller of stocks for nine consecutive quarters. What does he like so much about these five Japanese stocks that made him want to buy more shares as the market tanked?
For one thing, Buffett understands their businesses. All five companies are conglomerates that operate in a wide range of industries. It's no coincidence this description sounds similar to Berkshire itself.
When Berkshire first invested in these Japanese stocks in 2019, Buffett was attracted to their low valuations. I suspect that's still the case. Itochu trades at a price-to-earnings ratio of 10.5 -- and it's the most expensive of the group. Sumitomo's and Mitsubishi's earnings multiples are 9.72 and 9.52, respectively. Marubeni and Mitsui are even cheaper with shares trading at 8.21 and 7.82 times trailing 12-month earnings, respectively.
Buffett wrote to Berkshire shareholders earlier this year that he and his designated successor as CEO of Berkshire Hathaway, Greg Abel, "like their capital deployment, their managements and their attitude in respect to their investors." In particular, he pointed out the Japanese conglomerates' approaches to dividend increases, stock buybacks, and executive compensation.
The "Oracle of Omaha" stated in his 2023 letter to Berkshire shareholders that Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo were among a select group of stocks he expected to "maintain indefinitely." He reaffirmed this view in his most recent shareholder letter, writing, "I expect that Greg and his eventual successors will be holding this Japanese position for many decades and that Berkshire will find other ways to work productively with the five companies in the future."
Should you buy these stocks too?
I'm always leery of even the appearance of suggesting that anyone buy a stock solely because a famous investor bought it. Your investment objectives, risk tolerance, and financial resources will almost certainly differ from Buffett's and Berkshire Hathaway's.
For example, Berkshire is borrowing yen to finance its investments in these Japanese stocks. Its dividend income in 2025 from the five trading houses should be in the ballpark of $812 million, compared to an interest cost of its yen-denominated debt of around $135 million. That's the kind of financial transaction most retail investors won't be able to swing.
That said, the underlying reasons Buffett likes these Japanese stocks are good reasons for other investors to like them. Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo have solid business models. Their stocks are attractively valued. All five pay dividends that should add to their total returns over the long run. I think these qualities make the stocks Buffett bought as the market sank good picks for quite a few other investors, too.
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Keith Speights has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway and VeriSign. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
