Warren Buffett, the head of Berkshire Hathaway, is renowned for his distinctive investment approaches. Since assuming leadership in the 1960s, his firm has realized a remarkable return of nearly 5,700,000%. A multitude of investors strive to replicate his trading strategies.
According to Berkshire Hathaway’s recent disclosures, Domino’s Pizza has captured Buffett’s attention as his latest stock pick. Over the last two decades, the stock price of Domino’s has surged approximately 7,000%, not including dividends. Despite this significant rise, the company has refrained from executing a stock split to enhance share accessibility.
Currently, Domino’s shares are priced at about $439, which may be perceived as steep for smaller investors. This situation has sparked speculation about a potential stock split in 2025 to lower share prices. The company’s initiative called “Hungry for MORE” has shown promising outcomes.
The initiative emphasizes:
– Creating innovative products to engage customers
– Implementing technology and streamlined processes to enhance profits
– Rewarding faithful customers
– Strengthening brand equity through franchise partnerships
In the third quarter, these strategies resulted in a 5.1% increase in global retail sales. Domino’s is poised for its 31st consecutive year of sales growth in international markets. The company’s commitment to transparency has bolstered brand trust, fostering greater customer loyalty.
If Domino’s maintains its marketing strategies and operational efficiency, it could produce substantial gains for its shareholders. With Warren Buffett on board as an investor, there’s substantial interest in whether Domino’s will emerge as the next candidate for a stock split in 2025. Buffett tends to focus on specific businesses through Berkshire Hathaway.
Nevertheless, in recent times, he has diversified into ETFs as well. Berkshire now holds two ETFs that track the S&P 500: the SPDR S&P 500 ETF Trust and the S&P 500 ETF. Buffett appears to have a preference for the S&P 500 ETF, given Berkshire’s larger stake in it.
In his 2013 shareholder letter, he articulated a preference for S&P 500 funds. Buffett commenced investing in the S&P 500 ETF in 2019, and its returns have surpassed 100% since that time.
Warren Buffett’s Recent Stock Selection
Nonetheless, there are worries regarding future market conditions. Barry Bannister from Stifel anticipates a 26% decline in the S&P 500 next year, citing elevated valuations and economic challenges. Morgan Stanley analyst Seth Carpenter also expressed concerns that potential tariffs could have adverse effects on the economy.
He suggested that tariffs might elevate inflation rates and hinder economic growth. The accuracy of these projections remains uncertain. While deregulation and corporate tax cuts may benefit the stock market, tariffs could negatively influence it.
For investors with a long-term vision, the encouraging news is that the S&P 500 has a history of delivering exceptional returns. Buffett’s investment in the S&P 500 ETF could continue to be a solid choice for sustained investment. Although Warren Buffett’s Berkshire Hathaway has been divesting stocks in 2024, it still maintains significant stakes in various firms.
This December, three appealing stocks are Occidental Petroleum, Chevron, and Pool Corporation. Occidental Petroleum stands as Berkshire’s sixth-largest holding. The company reported robust results for the third quarter, featuring adjusted EPS of $1.00 and a 21% surge in operating cash flow.
Occidental Petroleum presents an appealing dividend stock with a yield of 1.7%. Chevron provides a trustworthy source of passive income, having increased dividends for 37 consecutive years and offering a 4% yield. The company has diversified away from oil and gas and can remain profitable even with oil prices dipping below $50 a barrel.
Pool Corporation is a recent addition to Berkshire’s portfolio. As the largest distributor of pool-related products, the company’s business relies heavily on maintenance and replacement expenditures, despite the cyclical nature of its industry.
Management anticipates long-term revenue growth ranging from 6% to 9% annually. These three stocks present a combination of dependable dividends and significant growth potential, positioning them as superior options for investors this December.
