Berkshire Hathaway (Warren Buffett)
When he’s not campaigning for higher taxes on the rich, Berkshire Hathaway’s (BRK.A, BRK.B) bespectacled billionaire Warren Buffett does a fair bit of investing. And the legendary value investor guided Berkshire’s $89 billion portfolio into a handful of new positions this past quarter.
Perhaps most interesting was his bet on Canadian heavy-oil producer Suncor (SU). According to Berk’s 13F, Buffett added more than half a billion dollars’ worth of the bitumen kingpin to the portfolio.
Suncor derives most of its current oil production from Alberta’s oil sands. That’s hurt the firm as Canadian crude oil has traded at even bigger discounts to Brent than WTI. As such, margins as well as earnings have suffered at Suncor over the last year or so.
But the firm is one of the largest land-holders in the Athabasca tar sands region, and production over the longer term should continue growing as energy-thirsty Asia looks towards Canada for its petroleum needs.
Plus, Suncor shares are cheap on both price-to-book value (1.2) and forward P/E (10.3) metrics.