Berkshire Hathaway (BRK.A 1.42%) (BRK.B 1.11%) owns shares of more than 40 different companies in its portfolio. To be perfectly honest, there’s a solid investment case to be made for all of them. After all, Warren Buffett and his team tend to invest in industry leaders with excellent cash flow and durable competitive advantages.
However, there are some that look more attractive than others, and that’s especially true as 2025 gets underway. With that in mind, here are three stocks from Berkshire’s portfolio that could certainly be worth a closer look right now.
Buffett can’t stop buying this legal monopoly
One stock Berkshire has been loading up on lately is Sirius XM Holdings (SIRI 1.55%). Berkshire has added to its position in the satellite radio leader several times recently and now owns nearly 35% of the company. This is the second-largest percentage Berkshire owns of any company besides its wholly owned subsidiaries (Davita is first, with a 44% stake).
Sirius XM isn’t just a leader in its industry but is a legal monopoly. It is the only major satellite radio company and is a highly profitable business. With shares trading for less than 8 times forward earnings, it could be a steal for long-term investors.
To be fair, there’s a lot not to like. Revenue hasn’t grown significantly since 2021, and the subscriber base peaked six years ago and hasn’t been able to get back to that level yet. But Sirius XM’s management is making some smart moves (like introducing an ad-supported version), and as interest rates fall, it could reinvigorate new vehicle sales, which would be a major growth catalyst.
A cheap bank that could have an interesting 2025
Soon after the 2023 banking turmoil that saw several regional institutions shut their doors for good, Buffett unloaded several large bank stock positions. However, one of the few still in the portfolio is Capital One Financial (COF 1.34%), of which Berkshire owns about $1.6 billion worth of stock.
It’s not hard to see why Buffett might like Capital One. The credit card business can be extremely profitable thanks to the relatively high interest rates on credit card debt. In fact, Capital One has a net interest margin of more than 7%, more than double what most other large banks produce. And the stock is rather cheap at just 1.12 times book value — for context, fellow Buffett bank stock Bank of America has a price-to-book multiple of nearly 1.3.
The pending acquisition of Discover Financial Services will be interesting to watch. Not only will it dramatically increase the size of the bank’s credit card business, but it will also give Capital One control over Discover’s payment network, thereby reducing its reliance on Visa and Mastercard for payment processing.
A dominant leader with lots of potential
While the massive Apple investment gets most of the attention, there’s another “Magnificent Seven” stock in Berkshire’s portfolio — Amazon.com (AMZN 2.39%). There’s a good argument to be made that it is one of the most attractive investments in the portfolio right now.
It’s rare to find a company with two different but market-leading businesses. Amazon’s e-commerce business is larger than its next 10 competitors combined, and with only 16% of U.S. retail sales coming from e-commerce today, there’s lots of room to grow. Amazon Web Services (AWS) is the leader in cloud services and is by far the more profitable part of the company. Plus, the cloud computing market is forecast to roughly triple in size by 2032, so it could be a major driver of profit growth for years to come.
Which is best for you?
The best choice for you depends on your risk tolerance, investment goals, and current portfolio composition. But these are three excellent stocks for long-term investors to own, and they all look attractive as 2025 gets underway.
Bank of America is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Discover Financial Services is an advertising partner of Motley Fool Money. Matt Frankel has positions in Amazon, Bank of America, Berkshire Hathaway, and Capital One Financial. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends Discover Financial Services and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
