Summary
- Both gurus have positions in Kraft Heinz, Taiwan Semiconductor, Apple
AAPL , Johnson & Johnson
JNJ , Visa
V and U.S. Bancorp
TBBK .
Warren Buffett (Trades, Portfolio), the legendary investor who leads Berkshire Hathaway
Similarly, Wedgewood Partners’ David Rolfe (Trades, Portfolio) approaches potential investments with the mindset of a business owner. He strives to generate significant long-term wealth by analyzing a handful of undervalued companies that have a dominant product or service, consistent earnings, revenue and dividend growth, are highly profitable and have strong management teams.
Since the two gurus have comparable approaches to investing, it is no surprise they have several holdings in common as of the three months ended Sept. 30.
According to the Aggregated Portfolio, a Premium GuruFocus feature based on 13F filings, the veteran value investors both have positions in The Kraft Heinz Co. (KHC, Financial), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial), Apple Inc. (AAPL, Financial), Johnson & Johnson (JNJ, Financial), Visa Inc. (V, Financial) and U.S. Bancorp (USB, Financial) as of the third quarter.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Kraft Heinz
During the quarter, Rolfe boosted his Kraft Heinz (KHC, Financial) position by 6.82%, while Buffett left his holding unchanged. The two gurus have a combined equity portfolio weight of 3.74% in the stock.
The Chicago-based packaged goods company, which owns the Oscar Mayer, Kraft, Velveeta, Heinz and Jell-O brands, has a $48.83 billion market cap; its shares were trading around $39.84 on Thursdaywith a price-earnings ratio of 40.68, a price-book ratio of 1.02 and a price-sales ratio of 1.90.
The GF Value Line
The GF Value Line suggests the stock is fairly valued.
The GF Score of 68 out of 100, however, indicates the company has poor future performance potential. While Kraft Heinz received high ratings for profitability and momentum, its growth, financial strength and GF Value ranks were low.
The GF Score indicates the company is likely to have average performance going forward.
Buffett has lost an estimated 47.11% on the investment based on GuruFocus data, while Rolfe has gained 3.54%.
Of the gurus invested in Kraft Heinz, Buffett has the largest stake with 26.57% of its outstanding shares. First Eagle Investment (Trades, Portfolio), Bill Gates (Trades, Portfolio)’ foundation trust and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also have significant holdings.
Taiwan Semiconductor Manufacturing
Buffett entered a 60.06 billion-share stake in Taiwan Semiconductor Manufacturing (TSM, Financial) during the quarter, while Rolfe curbed his investment by 15.17%. The combined equity portfolio weight is 5.21%.
The Taiwanese semiconductor chip manufacturer has a market cap of $421.52 billion; its shares were trading around $81.35 on Thursday with a price-earnings ratio of 14, a price-book ratio of 4.55 and a price-sales ratio of 5.99.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Value Line suggests the stock is significantly undervalued.
Further, the GF Score of 91 implies the company has high outperformance potential. While it raked in high scores for four of the criteria, momentum fell short.
The GF Score indicates the company has high outperformance potential.
GuruFocus found Buffett has lost an estimated 1.57% on his investment so far, while Rolfe has lost around 30.43% since the second quarter of 2021.
With a 1.16% stake, Buffett is now the company’s largest guru shareholder. Other top guru investors include Ken Fisher (Trades, Portfolio), Steve Mandel (Trades, Portfolio), First Eagle, Baillie Gifford (Trades, Portfolio), Frank Sands (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Ron Baron (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Chase Coleman (Trades, Portfolio).
Apple
Rolfe reduced his position in Apple (AAPL, Financial) by 1.83% to 360,547 shares during the quarter, while Buffett left his stake unchanged with 894.80 million shares. They have a combined equity portfolio weight of 51.13% in the stock.
The tech giant known for the iPhone and Mac computer, which is headquartered in Cupertino, California, has a $2.33 trillion market cap; its shares were trading around $147.73 on Thursday with a price-earnings ratio of 24.72, a price-book ratio of 46.16 and a price-sales ratio of 6.08.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Value Line suggests the stock is modestly undervalued.
Driven by high ratings for four of the criteria and middling marks for financial strength, Apple’s GF Score of 97 suggests it has high outperformance potential.
The GF Score indicates the company has high outperformance potential.
GuruFocus says Buffett has gained an estimated 280.02% on his investment since the first quarter of 2016, while Rolfe has gained 82.23% so far.
Once again, Buffett has the largest stake with 5.62% of Apple’s outstanding shares. Fisher, Spiros Segalas (Trades, Portfolio), Grantham, PRIMECAP Management (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Tom Gayner (Trades, Portfolio) and Elfun Trusts (Trades, Portfolio) also have notable positions in the stock.
Johnson & Johnson
While Buffett left his Johnson & Johnson (JNJ, Financial) holding unchanged at 327,100 shares, Rolfe shaved 0.78% off his 6,400-share investment. The combined equity portfolio weight is 0.22%.
The New Brunswick, New Jersey-based pharmaceutical company, which also produces medical devices and consumer goods, has a $466.40 billion market cap; its shares were trading around $178.27 on Thursday with a price-earnings ratio of 24.58, a price-book ratio of 6.26 and a price-sales ratio of 4.95.
The GF Value Line suggests the stock is fairly valued currently.
The GF Value Line suggests the stock is fairly valued.
The GF Score of 90 indicates the company has high outperformance potential on the back of strong ratings for profitability, growth, financial strength and momentum as well as middling marks for GF Value.
The GF Score indicates the company has high outperformance potential.
GuruFocus data shows Buffett has gained an estimated 14.97% on the long-held investment. Rolfe has generated a 53.92% return since the first quarter of 2016.
Of the gurus invested in Johnson & Johnson, Fisher has the largest stake with 0.23% of its outstanding shares. Dalio’s firm, Grantham, Yacktman Asset Management (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio), Tweedy Browne (Trades, Portfolio) and Mairs and Power (Trades, Portfolio) also have large holdings.
Visa
In the third quarter, Rolfe trimmed his Visa (V, Financial) position by 2.7%, while Buffett left his stake alone. The gurus have a combined equity portfolio weight of 6.89% in the stock.
The company headquartered in San Francisco, which facilitates electronic payments and provides credit card services, has a market cap of $458.95 billion; its shares were trading around $216.70 on Thursday with a price-earnings ratio of 31, a price-book ratio of 12.87 and a price-sales ratio of 15.78.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Value Line suggests the stock is modestly undervalued.
With strong ratings for all five criteria, the GF Score of 99 means the company has high outperformance potential.
The GF Score indicates the company has high outperformance potential.
GuruFocus estimates Buffett has gained 372.42% on his investment since the third quarter of 2011. Rolfe has also done well with a return of roughly 115.86% so far.
With a 0.51% stake, Frank Sands (Trades, Portfolio) is the company’s largest guru shareholder. Other top guru investors of Visa include Fisher, Andreas Halvorsen (Trades, Portfolio), Chuck Akre (Trades, Portfolio), PRIMECAP, Segalas, Mandel, Simons’ firm, Diamond Hill Capital (Trades, Portfolio), Grantham and Dalio’s firm.
U.S. Bancorp
Although Buffett reduced his stake in U.S. Bancorp (USB, Financial) by 31.81% during the quarter, Rolfe upped his position by 7.29%. Together, the gurus have a combined equity portfolio weight of 1.34%.
The Minneapolis-based bank holding company has a $67.25 billion market cap; its shares were trading around $45.20 on Thursday with a price-earnings ratio of 10.75, a price-book ratio of 1.65 and a price-sales ratio of 2.86.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Value Line suggests the stock is modestly undervalued.
The GF Score of 77 indicates the company is likely to have average performance going forward. While U.S. Bancorp received high ratings for growth and GF Value, it got middling marks for profitability and momentum as well as a low financial strength rank.
The GF Score indicates the company is likely to have average performance going forward.
According to GuruFocus, Buffett has gained an estimated 44.04% on the long-held investment. Rolfe has gained approximately 22.67% since the first quarter of 2016.
Buffett is the company’s largest guru shareholder with a 3.57% stake. U.S. Bancorp is also held by Chris Davis (Trades, Portfolio), First Eagle, Grantham, Barrow, Hanley, Mewhinney & Strauss, Mairs and Power (Trades, Portfolio), the Yacktman Fund (Trades, Portfolio)s, PRIMECAP and many other gurus.
Portfolio composition
Buffett’s $296.10 billion equity portfolio, which is composed of 49 stocks, is largely invested in the technology, financial services and energy sectors.
Overview of Buffett’s portfolio by sector.
Rolfe’s $532 million equity portfolio, which is composed of 40 stocks, is heavily invested in the technology and financial services sectors.
Overview of Rolfe’s portfolio by sector.
Disclosures
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Source: https://www.forbes.com/sites/gurufocus/2022/12/02/warren-buffett-and-david-rolfe-agree-on-these-6-stocks/