These 9 Warren Buffett Stocks Are Higher During the Nasdaq Bear Market
Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has a knack for making money. Despite navigating his way through more than a half-dozen bear markets since taking the reins in 1965, the Oracle of Omaha has created more than $590 billion in shareholder value and overseen a better than 3,600,000% aggregate return for his company's Class A shares (BRK.A).
Warren Buffett's success as an investor
Amid this bear market carnage, nine Warren Buffett stocks have managed to deliver a positive year-to-date return, not counting dividends paid.
1. Coca-Cola: Up 0.4% year to date
Beverage giant Coca-Cola (NYSE: KO) is Warren Buffett's
Although inflation is soaring domestically and in a number of key markets globally, many of Coca-Cola's beverage products are viewed as non-discretionary items. In other words, people are unlikely to reduce their consumption of Coke products just because prices are up and the domestic or international economic outlook has weakened.
What's more, Coca-Cola
2. Kroger: Up 2.1%
The United States' leading supermarket chain, Kroger (NYSE: KR), is another Buffett stock that's outperforming as the Nasdaq tumbles.
Kroger's success during uncertain times is due to the fact that it sells basic necessities. No matter how poorly the stock market or U.S. economy perform, consumers still need to buy food, hygiene, and household products. Even though operating margins for supermarkets are razor-thin, there's a predictable level of cash flow the company can expect to generate each year.
However, Kroger is only expected to grow sales by 2% next year, which means
3. Markel: Up 3.9%
Conglomerate Markel (NYSE: MKL), which was a first-quarter addition to Berkshire Hathaway's portfolio, is also having a respectable year, with its shares up nearly 4%.
Markel is often viewed as a mini-Berkshire Hathaway. It
The company also invests in and acquires businesses, albeit on a smaller scale than Berkshire Hathaway. Since the beginning of the century, Markel's book value has soared nearly 3,600%!
4. T-Mobile: Up 10%
The beauty of telecom stocks is that having a wireless device and wireless access have become basic necessities over the past two decades. Stock corrections and economic downturns usually have little impact on wireless churn rates. This means continued profitability for the big domestic players.
T-Mobile has also jumped out to an early lead with its 5G wireless penetration in the U.S. Though upgrading its wireless infrastructure to handle 5G speeds will be costly, the juicy margins associated with increased data consumption should be well worth it.
5. BYD: Up 10.1%
China-based electric vehicle (EV) and battery company BYD (OTC: BYDD.F) edges out T-Mobile by the slimmest of margins for a year-to-date gain of 10.1%.
Whereas most automakers have been pulverized by parts shortages and/or COVID-19 pandemic-related provincial shutdowns in China,
To boot, battery installations in Q1 more than tripled to 10.4 gigawatt-hours, accounting for over 20% of China's battery installation market share to begin the year.
6. Activision Blizzard: Up 12.3%
Whereas most tech stocks have been clobbered in 2022, gaming company Activision Blizzard (NASDAQ: ATVI) has defied the Nasdaq bear market. There's a good reason for that.
In January, software kingpin Microsoft made a $95 all-cash offer to acquire Activision Blizzard. Though shares are up 12% in the wake of this announcement, they're still trading well below Microsoft's all-cash offer price due to the uncertainty of whether or not U.S. regulators will approve the combination.
Interestingly, the usually long-term-focused Warren Buffett made clear during his company's annual shareholder meeting that Berkshire Hathaway's position in Activision
7. McKesson: Up 20.9%
Healthcare services company McKesson (NYSE: MCK), which was added to Berkshire's portfolio in Q1, has been truly superb. It's outperformed the Nasdaq by more than 50 percentage points on a year-to-date basis.
The great thing about
McKesson's capital return program is also bound to turn heads. In fiscal 2022, which ended March 31, 2022, the company repurchased roughly $3.5 billion worth of its common stock. Over the past 5 1/2 years, it's bought back more than $11 billion worth of its shares.
8. Chevron: Up 26.4%
Perhaps it's no surprise that
Chevron's outperformance is a reflection of crude oil and natural gas prices hitting multidecade highs. There's a good likelihood that energy prices will remain elevated for the foreseeable future. Energy companies were forced to pare back investments during the pandemic, and now the global energy complex has been disrupted by Russia's invasion of Ukraine. In short, there's no way to quickly ramp up supply in order to lower spot prices.
But keep in mind that Chevron is also an integrated energy company. It operates pipelines, refineries, and chemical plants that help it hedge against significant downside in crude oil and natural gas prices.
9. Occidental Petroleum: Up 92.1%
Lastly, the crown for top-performing Warren Buffett stock in 2022 goes to oil and gas company Occidental Petroleum (NYSE: OXY). Shares have nearly doubled, and are outperforming the Nasdaq by more than 120 percentage points this year.
Although Occidental is an integrated company like Chevron, it
However, Occidental's acquisition of Anadarko in 2019 put its balance sheet under serious strain. Despite repaying $9.6 billion in debt over the trailing year, Occidental ended March with a still-mountainous $25.9 billion in net debt.
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