Warren Buffett plans to retire this year after delivering a return of over 5,000,000% to long-term investors through his holding company Berkshire Hathaway. With a market capitalization of $1.12 trillion, Berkshire is already quite large, so investors shouldn't expect a repeat of the previous six decades of growth.That said, the portfolio is still a great way to look for inspiration in the market. Let's discuss why two Berkshire-backed stocks, Amazon (AMZN 0.55%) and BYD (OTC: BYDD.F), could make great buys ...

One of Warren Buffett's core investment tenets is to buy high-quality companies that possess economic moats. Having durable competitive strengths helps a business defend itself against existing rivals and new entrants to the industry. Look at Berkshire Hathaway's massive $277 billion public equity portfolio and you'll see this philosophy on full display.The conglomerate has a stake in dozens of companies, but Buffett's firm owns 400 million shares of one top dividend stock. Is it a must-buy in May?Steady pe ...

Celsius (CELH -3.09%) was once the talk of the town among investors. In the five-year period leading up to the stock's Mar. 2024 all-time high, it surged more than 7,300%. The business was putting up ridiculous growth numbers year after year.However, the remainder of 2024 was a rude awakening as sales started to come under pressure. The beverage stock is 64% off its peak, as of this writing, despite climbing 44% in the past three months. Clearly, volatility is still a major part of the story.Celsius is trad ...

Group 1: Company Overview - Warren Buffett's Berkshire Hathaway has a significant investment in Coca-Cola, valued at $29 billion, making it the third largest holding in the portfolio [3][4] - Coca-Cola has generated a total return of 22,400% since April 1975, showcasing its long-term profitability and growth potential [3][4] Group 2: Competitive Advantages - Coca-Cola possesses a wide economic moat, supported by its strong brand and global presence in over 200 countries with more than 200 different products [4] - The company's marketing strategy, including long-term sponsorships like the Olympics, enhances brand visibility and customer loyalty [5] - Coca-Cola has demonstrated strong pricing power, allowing it to consistently increase prices over time due to customer loyalty [5] Group 3: Financial Performance - Coca-Cola's operating margin has averaged 27% over the past decade, indicating robust profitability [6] - Berkshire Hathaway owns 400 million shares of Coca-Cola, generating an annual income of $816 million from dividends, with a quarterly payout of $0.51 per share [8][9] - Coca-Cola has increased its quarterly dividend for 63 consecutive years, appealing to income-focused investors [9] Group 4: Investment Considerations - While Coca-Cola has generated significant wealth historically, it has underperformed in the last five and ten years, making it less attractive for investors seeking high growth [10][11] - The mature nature of the beverage industry suggests muted growth prospects, indicating that substantial future returns may be unlikely [10][11]

Core Viewpoint - Berkshire Hathaway holds a significant stake in American Express, valued at $37 billion, indicating potential for continued success in the financial sector [1] Group 1: Competitive Strengths - American Express possesses durable competitive advantages, characterized by a strong brand and economic moats, making it a high-quality business [3] - The company has a powerful brand presence in the financial services industry, targeting wealthier clients with premium credit cards that offer high rewards and perks [4] - American Express benefits from a network effect, where increased merchant acceptance enhances the value of its cards for consumers, creating a positive feedback loop [5][6] Group 2: Financial Performance - In 2024, American Express reported a 9% increase in revenue, reaching $65.9 billion, and a 19% rise in adjusted earnings per share (EPS) [7] - The company anticipates revenue growth of 8% to 10% and adjusted EPS growth of 12% to 16% in 2025, with long-term sales growth projected at a minimum of 10% per year [7] - Favorable trends, such as the shift towards cashless transactions and rising GDP, are expected to drive payment volume through American Express's network [8] Group 3: Customer Base and Demographics - The customer base is shifting, with millennials and Gen-Z accounting for over 60% of new consumer accounts in Q1, indicating a growing spending trend among these demographics [9] Group 4: Valuation and Capital Return - American Express shares are currently trading 26% below their all-time high, presenting a compelling valuation opportunity with a price-to-earnings (P/E) ratio around 17, one of the lowest in the past year [10] - The company has a strong capital allocation policy, returning $2 billion in dividends and repurchasing $5.9 billion in stock in 2024, enhancing returns for investors [11]

Core Viewpoint - American Express is highlighted as a strong investment opportunity, particularly for those looking to invest $1,000, due to its durable competitive advantages and solid financial performance over time [1]. Group 1: Economic Moat and Competitive Strength - American Express possesses a durable economic moat characterized by its strong brand and premium positioning in the credit card market, attracting wealthier customers [2]. - The company's brand supports its pricing power, allowing it to charge merchants higher fees compared to other card networks and to increase annual fees for customers, with the average fee per card rising to $111 in Q1 2025, a 185% increase over the past decade [3]. Group 2: Financial Performance and Growth - American Express has demonstrated sustainable growth, with revenue and diluted earnings per share (EPS) increasing at compound annual rates of 6.7% and 9.7% respectively from 2014 to 2024 [5]. - The leadership anticipates continued growth, projecting revenue to increase by at least 10% annually and EPS to grow at a mid-teens rate [5]. Group 3: Resilience in Economic Downturns - Despite concerns about a potential recession, American Express's affluent customer base is expected to navigate economic challenges better than average consumers, which may minimize losses for the company [7]. - In Q1 2025, American Express reported a net write-off rate of 2.1%, unchanged year over year, indicating stability in credit quality [7]. Group 4: Recent Spending Trends - The company has observed continued strength in restaurant and lodging spending, although there was a deceleration in airline spending compared to 2024 trends [8]. - American Express experienced a 6% increase in billed business, which measures payment volume, in Q1 2025 [8]. Group 5: Valuation and Investment Opportunity - Despite a challenging market environment, American Express shares have declined 18% in 2025, presenting a potential buying opportunity for long-term investors [10]. - With a price-to-earnings ratio of 16.9, below its historical three-year average, the stock is considered a compelling investment at its current valuation [11].