It's Uncle Warren's big weekend, when the faithful flock goes to Omaha to meet the greatest investor of our generation. There will be food and music and furniture and all of the other trappings of a Berkshire Hathaway (BRK.A) (BRK.B) festival. And most important, for us, there will be talk of stocks galore, especially Buffett's portfolio where you can bet he will be grilled about his positions.
Berkshire's got a ton of them. Let's take a look at the top five to set the scene for what he might say.
First is Apple (AAPL) where we know he just bought 75 million additional shares to go with his 170 million of last filing. That's a monster and we know that Buffett likes Apple because he thinks it produces the greatest consumer products ever, ones with 99% satisfaction rate. Buffett hasn't really addressed the service stream but I think that's going to be the big theme for him and it is the one that the tech analysts constantly deride as small potatoes versus handsets. This quarter put an end to that and I bet Buffett talks about razors-the cellphones-and razor blades-all the services including music, iPhone back up, Apple Pay and so much else and how that's where the money is.
Second is Wells Fargo (WFC) . Here's one where he's just going to ride it out betting the worst is over. I expect he will spend as little time on it as possible because it is so darned embarrassing. He's not allowed to buy anymore because no entity can own more than 10% of a bank. But he's got to be steamed about the endless penalties. Still, if he says the government's intervention is over, this one rallies and rallies hard even though the restrictions the feds put on the bank are pretty onerous when it comes to growth.
Third is Kraft Heinz (KHC) and here's one where the worst is over and it's started to rally. Warren Buffett, while still a big shareholder, is leaving the board, which, to me means that the company can be more hostile in its next deal, something Buffett forbade. Pinnacle's (PF) a natural but it's awfully high. Kellogg's (K) a possibility, too.
Fourth is Bank of America (BAC) , through the warrants that he got when the company was near death's door. It's been spectacular and he loves Brian Moynihan the CEO. So do I and I think that if the Fed raises rates three times and it doesn't kill the economy this is the bank to bet on.
Finally there is Coca-Cola (KO) and this is a tough one. Buffett has shown an amazing patience and willingness to let the company just do its thing, and I bet he says that James Quincey, the new CEO, is doing a great job expanding the beverage portfolio.
What's missing from the top five? None other than IBM (IBM) , which is truly a shame. I actually think that IBM with its emphasis on fast growing strategic imperatives and a 4% yield is now a buy. It's too hard to say that Buffett called the bottom with his final sales, but as far as risk reward it's one of the best stocks out there.
Remember, these days Uncle Warren doesn't mince words. He totally tells it like it is. That's why I think Apple and Wells are the two I care the most about. He caused the stock of Apple to break out today. Will he do the same thing to Wells? That's the only mystery of the weekend.
Let's leave it at that.