Warren Buffett is one of the 21st century’s most influential and successful institutional investors. With his winning investing formula, Buffett has become the world’s fifth-richest person. His holding company, Berkshire Hathaway (BRK.A), has gained 0.7% over the past nine months.
Buffett holds a significant stake in Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), and Occidental Petroleum Corporation (OXY). As of the first quarter of 2022, AAPL accounts for the largest holding in Buffett’s portfolio, valuing $159.10 billion. He holds 10 million shares of AMZN worth $103.67 billion. Also, his portfolio includes $59.83 million worth of OXY.
Given the fundamental strength of these stocks, we think investors should consider buying the dip in these three Buffett’s holdings.
Apple Inc. (AAPL)
APPL needs no introduction. The multinational technology company designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.
On June 6, 2022, AAPL previewed iPadOS® 16, which takes the versatility of the iPad further with powerful productivity and collaboration features. Taking advantage of the power of the M1 chip, Stage Manager™, AAPL introduced an entirely new multitasking experience, full external display support, new ways to collaborate via Messages, big updates to Mail, Safari, iCloud Shared Photo Library, and more.
On the same day, AAPL also provided its developers with even more powerful tools and technologies to create richer experiences for their users. These should help the company enhance its customer base and revenue streams.
AAPL’s total net sales increased 8.6% from the prior-year quarter to $97.28 billion in the fiscal second quarter ended March 31, 2022. The gross margin for the quarter came in at $42.56 billion, reflecting an increase of 11.8% year-over-year, while the operating income stood at $29.98 billion, up 9% year-over-year. The company’s EPS increased 8.6% from the prior-year quarter to $1.52
The consensus EPS estimate of $1.32 for the fiscal quarter ending September 2022 represents a 6.8% improvement year-over-year. The consensus revenue estimate of $90.60 billion for the same quarter represents an 8.7% increase from the same period last year. It has an impressive earnings surprise history, as it topped Street EPS estimates in each of the trailing four quarters.
AAPL’s shares have gained 3.6% over the past year to close the last trading session at $131.88. However, it slumped 10.4% over the past month.
Amazon.com, Inc. (AMZN)
AMZN is a well-established company that engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments, North America; International; and Amazon Web Services (AWS).
On June 9, AMZN announced the launch of Virtual Try-On for Shoes, an interactive mobile experience that uses augmented reality to help customers visualize how a pair of shoes will look on them, right from the comfort of their homes. This should help AMZN to take a step forward in creating innovative experiences that make online shopping easier and more delightful for customers.
AMZN also announced the general availability of AWS Mainframe Modernization, a new service that makes it faster and easier for customers to modernize mainframe-based workloads by moving them to the cloud. This should provide organizations the complete advantage of the elasticity, scalability, and reliability that AWS has to offer, while also saving time and money.
AMZN’s total net sales increased 7.3% year-over-year to $116.44 billion in the fiscal quarter ended March 31, 2022. Its net cash provided by investing activities grew 110.5% from the year-ago value to $906 million, while its cash, cash equivalents, and restricted cash balance increased 7.2% from its year-ago value to $36.60 billion.
Street expects AMZN’s EPS for the fiscal third quarter to improve 33.3% year-over-year to $0.41. The consensus revenue estimate of $129.76 billion for the same period represents a 17.1% increase year-over-year.
AMZN has slumped 37.8% year-to-date and 8.3% over the past month to close the last trading session at $103.74.
Occidental Petroleum Corporation (OXY)
OXY engages in the acquisition, exploration, and development of oil and gas properties and operates through three segments Oil and Gas; Chemical; and Midstream and Marketing.
In March 2022, Oxy Low Carbon Ventures, a subsidiary of OXY and Weyerhaeuser Co. (WY), announced their lease agreement to develop a carbon capture and sequestration project on a 30,000-acre space in Louisiana. This is expected to help the company expand its business operations and reduce carbon emissions.
In the same month, OXY announced an agreement with SK Innovation Co. Ltd. to produce the first net-zero oil using environmental attributes. As per the agreement, SK Trading may purchase up to 2,00,000 barrels of net-zero oil per year for the next five years to develop net-zero products. This is expected to boost OXY’s revenue stream and might benefit the company.
OXY’s total revenue and other income increased 55.7% from the prior-year quarter to $8.53 billion in the fiscal quarter ended March 31, 2022. Income from continuing operations for the quarter came in at $4.88 billion, reflecting an increase of 1,530.8% year-over-year, while its EPS stood at $4.65, up 1,391.7% year-over-year.
OXY’s revenue for the fiscal quarter ending June 2022 is expected to come in at $9.36 billion, indicating a 55.7% year-over-year growth. The company’s EPS is expected to increase 813.8% from the year-ago value to $2.92. OXY also beat the consensus EPS estimates in all the trailing four quarters.
OXY’s stock has gained 111.2% over the past year and slumped 6.6% over the past month to close its last trading session at $59.83.
AAPL shares were trading at $131.94 per share on Tuesday morning, up $0.06 (+0.05%). Year-to-date, AAPL has declined -25.49%, versus a -21.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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