In this article, we will study about the stocks which are owned by billionaires – Bill Gates and Warren Buffett. What’s better than to own stocks which are owned by these 2 global personalities. Retail investors tend to track the portfolios of these global personalities as they have extensive resources, which are far more than any sponsor or individual group of investors. Apart from having resources and people who can vet a sponsor, they have the ability to fetch high caliber sponsors as a result of their financial prowess.
More often than not, stocks which are owned by billionaires tend to outperform the market in the long-term as their large amount of investment capital helps them in securing those investment opportunities which are simply not available to private investors.
For ~60 years, Berkshire Hathaway CEO, Mr. Warren Buffett, continues to run circles around most prominent stock indexes of Wall Street. Ever since his association with Berkshire Hathaway in mid-1960s, the Oracle of Omaha, was able to deliver an average annual return of ~19.8% for the company’s Class A shares through 2022 end. If you do the maths, its double the annualized total return, even after including the dividends, of S&P 500 index over this same time. Therefore, his investing techniques have never been questioned by anyone.
With this in mind, let us now look at the stocks which are owned by billionaires – Bill Gates and Warren Buffett.
1. The Kraft Heinz Company
Kraft merged with Heinz which led to the creation of 3rd largest food and beverage manufacturer in North America behind PepsiCo and Nestle and 5th largest player in the world.
The company’s net sales grew by ~2.6%, with organic net sales increasing 4.0% and gross profit margin increasing 337 basis points to 33.6%.
It delivered strong second quarter results, with growth coming in net sales, profits and profitability. This was consistent with the company’s strategy to accelerate profitable growth. It grew throughout each of its 3 pillars: Foodservice, Emerging Markets, and U.S. Retail Grow Platforms. The company’s profits went up while investing in marketing, research & development, and technology, which it financed through gross efficiencies.
Net income/(loss) went up by ~277.0% in comparison to year-ago period to $998 million, mainly because of lapping non-cash impairment losses in prior year period, higher adjusted EBITDA versus prior year period, and unrealized gains on commodity hedges in present year period against unrealized losses on commodity hedges in prior-year period.
For FY23, the company expects organic net sales growth of 4% – 6% versus the prior year. Constant currency adjusted EBITDA growth of 4% – 6% in comparison to prior year, or 6% – 8% when excluding the impact from lapping 53rd week in 2022 is expected. Adjusted EPS is expected between $2.83 – $2.91.
The company’s CAO Lande Rashida La sold 16,453 shares of the company’s stock on August 7th at an average price of $35.07, for the total transaction of ~$577,006.71. Post this, the chief accounting officer now owns 206,243 shares in the company, worth $7,232,942.01.
Barclays reduced their price target on the company’s share from $40.00 to $38.00, giving an “equal weight” rating in the report dated July 20th. Analysts at HSBC initiated the coverage on the company’s stock in on September 22nd. They gave a “hold” rating on the stock and set the price target of $38.00 for the company’s stock.
Capital World Investors increased its stake in the company by ~96.5% in the 1st quarter. Capital World Investors now owns ~13,312,000 shares of the company’s stock for the total consideration of $524,360,000 post purchasing an additional 6,537,000 shares during the period. Finally, Norges Bank purchased a new stake in the company in 4th quarter worth ~$252,224,000. Around ~75.39% of the stock is currently owned by hedge funds and several other institutional investors.
2. United Parcel Service, Inc.
As the world’s largest parcel delivery company, the company manages massive fleet of over 500 planes and 100,000 vehicles.
The company has released 2Q23 earnings, with consolidated revenues of $22.1 billion in comparison to $24.8 billion in the previous year. Consolidated operating profit of the company came at $2.8 billion and adjusted consolidated operating profit was $2.9 billion in 2Q23.
In the U.S. domestic segment, its revenue decreased 6.9% as a result of ~9.9% decline in average daily volume, which was partially offset by 3.3% rise in revenue per piece. Operating margin from the segment was 11.1% and adjusted operating margin was 11.7%.
The company expects FY23 consolidated revenue to be ~$93 billion and adjusted operating margin of around 11.8%. It reaffirmed its capital allocation plans and anticipates capital expenditures to be ~$5.3 billion, dividend payments of ~$5.4 billion, subject to board approval. Share repurchases are expected to be ~$3 billion.
Insider Nando Cesarone sold ~22,825 shares of the company’s stock in a transaction dated 16th August. The shares were sold at average price of ~$171.70, equating to the total value of $3,919,052.50. Post this, the insider now owns 1 share in the company, worth $171.70.
RB Capital Management LLC increased its holdings in shares of the company by ~3.1% during 1Q. RB Capital Management LLC now owns ~2,689 shares of the company stock worth $577,000 post buying additional 81 shares during the period.
Conclusion
To some extent, renowned billionaires tend to provide the liquidity to the stock market when they invest their capital. Influential figures in financial landscape are very much important in improving market liquidity, which helps in discovery of accurate prices, and allocating capital efficiently.
Stocks which are owned by billionaires are tracked by stock market experts because their presumed knowledge and considerable resources tend to highlight the future potential of the stocks. At the time of investment, such investors experience less regulatory protection in comparison to their retail counterparts. Vast expertise and financial resources enable them to conduct thorough and in-depth research into myriad investment prospects. As a result, they have access to deals and tactics which are often unreachable for retail investors.
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