There aren't many money managers who can command the attention of a room of investors quite like Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) Warren Buffett. Since becoming CEO in the mid-1960s, the "Oracle of Omaha" has overseen a staggering 6,444,825% cumulative return in his company's Class A shares (BRK.A), which on an annualized total return basis is nearly double that of the benchmark S&P 500(SNPINDEX: ^GSPC) over the last six decades.
Given Buffett's success on the investment front, professional and everyday investors alike aren't shy about riding his coattails to significant long-term gains. Berkshire's chief has a knack for picking out amazing bargains hiding in plain sight.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Mirroring Warren Buffett's trading activity is often easy. No later than 45 calendar days following the end to a quarter, Berkshire Hathaway is required to file a Form 13F with the Securities and Exchange Commission. This filing details every stock Buffett and his top advisors (Ted Weschler and Todd Combs) bought and sold in the latest quarter.
But what investors might not realize is that Berkshire's 13F has limitations. More specifically, it fails to disclose Warren Buffett's favorite stock to buy. This is a company he's spent nearly $78 billion purchasing in less than seven years, which happens to be crushing the broad-based S&P 500 in the return column on a year-to-date basis.
Berkshire Hathaway's top holdings aren't Buffett's favorite stock(s) to buy
Based on Berkshire's quarterly 13Fs, you'd probably come to the conclusion that his company's top holdings are Buffett's favorite stocks to buy.
For instance, Apple(NASDAQ: AAPL) has been Berkshire's largest holding by market value for more than half a decade. Berkshire's chief appreciates the strong leadership of Apple CEO Tim Cook, who's overseeing an ongoing transformation of his company into one focused on higher-margin subscription services.
Furthermore, Apple has the leading capital-return program among publicly traded companies. Since kicking off share buybacks in 2013, it's closing in on $750 billion in cumulative repurchases and has retired almost 43% of its outstanding shares. The beautiful thing about buybacks for companies with steady or growing net income is they provide a lift to earnings per share (EPS).
Despite the praise Warren Buffett has heaped on Apple and its CEO, the Oracle of Omaha has overseen the sale of more than 615 million shares of Apple since Sept. 30, 2023.
Investors might also think Buffett's "forever" holdings -- those identified in his 2023 shareholder letter as "indefinite" holdings -- are his favorite stocks to buy. These eight forever holdings include Coca-Cola and American Express, which have respectively been held since 1988 and 1991, Occidental Petroleum, and the five Japanese trading houses.
Though Coca-Cola and American Express are, undeniably, core holdings for Berkshire Hathaway, he hasn't purchased shares of either company in a really long time. Meanwhile, Buffett has spent a pretty penny buying close to 265 million shares of Occidental Petroleum since the start of 2022, yet it still doesn't come to matching the nearly $78 billion used to purchase shares of his favorite company.
Image source: Getty Images.
The Oracle of Omaha's favorite stock to buy is crushing the S&P 500 -- but it's also historically pricey
Investors wanting insight on Warren Buffett's favorite stock to buy should look past Berkshire's quarterly filed 13F and go straight to the company's operating results. On the final page before the executive certifications, you'll find to-the-dollar details of exactly how much the Oracle of Omaha has spent purchasing his favorite stock (drum roll)... Berkshire Hathaway.
Prior to July 2018, Berkshire Hathaway's share repurchase program effectively had Buffett's hands tied behind his back. Buybacks could only be made if Berkshire's stock fell to or below 120% of book value (i.e., no more than 20% of book value in the most recent quarter). Since Berkshire's stock never dipped below this level, no share repurchases could be undertaken.
On July 17, 2018, the company's board amended the rules governing buybacks to give Warren Buffett and late right-hand-man Charlie Munger more autonomy. As long as Berkshire has at least $30 billion in combined cash, cash equivalents, and U.S. Treasuries on its balance sheet, and Buffett views his company's stock as intrinsically cheap, repurchases can be made with no end date or ceiling.
For 24 consecutive quarters (July 2018 – June 2024), Buffett green-lit the purchase of almost $78 billion worth of his company's stock. During this span, Berkshire's outstanding share count was reduced by roughly 12.6%. Similar to Apple, these buybacks have provided an upward lift to Berkshire Hathaway's EPS.
Through the closing bell on April 1, 2025, Berkshire Hathaway stock has outperformed Wall Street's widely followed S&P 500 by more than 21 percentage points on a year-to-date basis: 17.13% vs. (4.23%). This disparity is even more pronounced over the last five years, with Berkshire's Class A stock outpacing the S&P 500 by more than 75 percentage points (193.2% vs. 117.9%), not including dividends.
While putting almost $78 billion to work via buybacks looks like a genius move in hindsight, it is worth pointing out that Warren Buffett broke his 24-quarter streak and didn't purchase a single share of his company's stock during the second-half of 2024.
If there's one aspect of Buffett's investment philosophy that he's unwavering about, it's his desire to get a good deal. He's a diehard value investor, and even his own company's stock is no longer a screaming bargain.
As of the closing bell on April 1, Berkshire Hathaway's stock was trading at a 77% premium to its 2024 year-end book value. The last time shares of Buffett's company consistently traded at this much of a premium to book value was in the early stages of the Great Recession (December 2007).
Although Berkshire Hathaway's year-to-date, five-year, and 60-year outperformance demonstrates what a juggernaut Buffett and Munger built, the recent lack of desire for Buffett to buy shares of his favorite stock signals that trouble may be brewing on Wall Street.
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American Express is an advertising partner of Motley Fool Money. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
