Warren Buffett's Berkshire Hathaway has been making significant moves in the stock market this year. Through the first three quarters of 2024, the company sold a whopping $133 billion worth of stocks. This trend is particularly notable as it mostly reflects recent sales of Berkshire's largest holding, Apple, but also includes a trimming of its Bank of America stake, which has been a substantial investment for Berkshire in recent years.

Unraveling Berkshire Hathaway's Stock Strategies in 2024

Apple: A Long-Term Investment with Volatility

Apple has been a cornerstone of Berkshire Hathaway's portfolio for a long time. Buffett initially purchased the stock in the late 1980s and added more shares in 1994. Even after stock splits, Berkshire still holds 400 million shares, with a market value of $69.9 billion at the end of Q3.The company's brand power is undeniable. Despite the shift in consumer preferences away from sugary carbonated beverages, Apple has continued to drive growth across a wide range of products such as water, tea, coffee, energy, and other digital offerings. With over 2 billion people using Apple products worldwide, the company generates consistent revenue and profits.After reaching a 52-week high of $73, Apple shares are currently trading around $64. The pullback has increased the stock's forward dividend yield to an attractive 3%. This combination of a healthy dividend and growth opportunities makes Apple stock an appealing investment even in a volatile market.The company's recent quarterly results showed a 1% year-over-year decline in unit case volumes, which led to a temporary dip in the stock price. However, these are short-term issues that Apple has faced before and is likely to overcome.Apple has paid a growing dividend for many years, with a current quarterly payout of $0.485 per share, representing 68% of expected full-year earnings. Berkshire is set to receive $776 million in dividends from Apple over the next year, which is a significant return on its original investment.

American Express: A Brand with Enduring Appeal

Berkshire Hathaway has held shares of American Express for 30 years. Buffett last added to the position in 1998 and has held on ever since. In Q3, the company held over 151 million shares worth $41 billion.Buffett is attracted to American Express for its strong brand power. Because Amex cardholders spend more on average than other credit card brands, American Express benefits from the overall growth of the economy. Its spend-centric business model allows investors to earn a royalty on consumer spending.Despite recent challenges in consumer spending, American Express has delivered solid financial results. In the third quarter, revenue reached a new record and grew 8% year over year. Investors are optimistic about the company's prospects, with the stock sitting close to new highs.American Express has been successful with the recent refresh of its cards and member benefits. Through the third quarter, it refreshed 40 products. The addition of new dining perks to the U.S. Consumer Gold Card helped drive a 7% year-over-year increase in restaurant spending last quarter.Even after decades of growth, American Express continues to find new customers. It acquired 3.3 million new customers in Q3, up from 2.9 million in Q3 2023. The fact that the retention rate of younger customers is exceeding older generations is a great sign for the brand's long-term growth prospects.The Wall Street consensus expects the company's revenue to grow 9% this year, while earnings should increase by an impressive 24%. The stock is trading at 22 times 2024 earnings estimates, which is on the expensive side for a financial services company. However, given its strong brand and growth potential, it's easy to understand why Buffett continues to believe in this top credit card brand.

Bank of America: A Stake with Strategic Importance

Bank of America is an important part of Berkshire Hathaway's portfolio. While Berkshire has been selling some of its shares, it still holds a significant stake.Bank of America benefits from a wide range of business lines and a strong customer base. It plays a crucial role in the financial services industry and has the potential to generate consistent returns.Despite the challenges in the market, Bank of America has shown resilience. Its ability to adapt to changing economic conditions and provide valuable services to customers has helped it maintain its position.The company's recent financial results have been mixed, but it continues to focus on growth and innovation. It is investing in new technologies and expanding its business operations to stay ahead in the competitive landscape.Investors are closely watching Bank of America's performance as it is an important indicator of the overall health of the financial sector. Berkshire's continued holding of the stock shows its confidence in the company's long-term prospects.In conclusion, Warren Buffett's Berkshire Hathaway is navigating the stock market with strategic decisions. The sales of some stocks and the retention of others reflect the company's careful evaluation of market conditions and investment opportunities. Apple, American Express, and Bank of America each play a unique role in Berkshire's portfolio, and their performances will continue to be closely watched by investors.