Warren Buffett's Latest Move: New Stock Added to Portfolio

Here's the 1 Stock We Know for Certain Warren Buffett and His Team Bought Recently

Warren Buffett, also known as the Oracle of Omaha, hasn't been very enthusiastic about the stock market lately. In fact, Berkshire Hathaway, his conglomerate, has been selling more stocks than buying in the past seven quarters. Despite this trend, there is one stock that Buffett (or one of his portfolio managers) has been purchasing for Berkshire Hathaway shareholders, as indicated by required SEC filings.

Warren Buffett's Recent Stock Activity

While Buffett has been reducing his exposure to equities in Berkshire's portfolio, he has been known to repurchase shares of Berkshire Hathaway over the years. However, share buybacks may be less appealing at Berkshire's current price, which has seen a 30% increase year-to-date. In June, Buffett did not buy back any shares, and the stock continued to trade higher in the third quarter. This could mark the first quarter without any share buybacks since the board of directors amended the repurchase authorization in 2018.

Buffett has also refrained from purchasing another stock he had consistently bought in the past - Occidental Petroleum. Despite a drop in Occidental's stock price due to falling oil prices, Berkshire Hathaway did not increase its stake in the company. It seems that Buffett is content with the 27.3% stake Berkshire holds and has shown confidence in Occidental's CEO, Vicki Hollub.

The Stock Purchase

One recent SEC filing revealed that Berkshire added to an existing position by purchasing $87 million worth of Sirius XM shares in October. While Berkshire had previously owned shares of Sirius XM, it significantly increased its stake in the company late last year. Sirius XM, the only satellite radio operator in the United States, generates revenue primarily from subscriptions rather than advertising. With a subscriber base of about 33 million paid subscribers, Sirius XM remains profitable despite recent stagnation in subscriber growth.

Sirius XM's Business Model

Sirius XM's focus on exclusive content and subscription-based revenue model, which includes free trials with new car purchases, sets it apart from traditional terrestrial radio. The company benefits from lower music royalty rates compared to on-demand streaming services, enabling it to produce rising operating profits. Despite its current stock price trading at a low valuation, Sirius XM's business model and consistent profitability make it a potential Warren Buffett investment.

Final Thoughts

As of now, Sirius XM is the only stock that Buffett and his team have purchased recently. This signals Buffett's caution towards the current stock market and the lack of attractive investment opportunities for Berkshire Hathaway. While larger companies may not be appealing from a valuation standpoint, there are numerous opportunities for everyday investors, especially in small- and mid-cap stocks.

Before considering investing in Sirius XM or any other stock, it's important to conduct thorough research and analysis. The current market offers a range of opportunities beyond what Buffett has selected, and investors should explore various options to build a diversified portfolio.