Through his holding company Berkshire Hathaway (NYSE:BRK-A/NYSE:BRK-B), Warren Buffett runs a massive investment portfolio, currently worth $340 billion. He also holds nearly $150 billion of cash in the portfolio in case, as he likes to say, opportunities arise.
Buffett’s investments are highly concentrated in a handful of notable names such as Apple (NASDAQ:AAPL) and Bank of America (NYSE:BAC). However, he has smaller positions in dozens of other stocks that attract less attention from the media.
Many have proven their investment value, thereby helping Buffett outperform the benchmark S&P 500 index, earning him the adage greatest investor of all time. So, let’s dive into three Warren Buffett stocks set to explode higher.
Warren Buffett is a notorious dividend collector.
The Oracle of Omaha must have been thrilled when wireless internet provider T-Mobile (NASDAQ:TMUS) recently declared its first ever dividend payment. The company promises to pay a dividend of 65 cents per share to stockholders on December 15.
Buffett currently owns 5.24 million shares of TMUS stock worth more than $735 million. Based on his current holdings, he will receive $3.40 million when T-Mobile pays the December dividend. If the internet company maintains its dividend at 65 cents a share each quarter, that would total $2.60 per share for the year.
Therefore, Buffett will earn $13.63 million from shareholder payouts. Not bad for one of Buffett’s newer investments. TMUS stock is up 3% over the last 12 months and has gained 100% over five years.
However, the antitrust action has been long anticipated and will likely take years to resolve. It’s more of a strong breeze than a headwind for the e-commerce company. And, while the antitrust action plays out, Amazon is making lots of right decisions that should help the company and its stock move forward.
First, Amazon is adding advertisements to its Prime Video streaming service and charging all users an additional fee of $2.99 per month to avoid seeing the ads. The addition of both the ads and optional skip fee should help to make Amazon’s streaming unit more profitable, bringing extra revenue. Next, Amazon announced plans to invest $4 billion in artificial intelligence (AI) company Anthropic, which is a rival to ChatGPT creator OpenAI. This could be a major catalyst for the stock.
AMZN stock has gained 46% so far in 2023. Warren Buffett currently owns 10.55 million shares of Amazon worth $1.31 billion.
United Parcel Service (UPS)
The Teamsters union that represents 340,000 workers at UPS recently announced that its members voted in favor of a new contract agreement. This essentially ends the risk of a major strike that threatened to disrupt millions of package deliveries, causing supply chain and inventory headaches for large and small businesses.
In fact, the new five-year collective agreement with the Teamsters was not cheap for UPS. The company has said that at the end of the new contract, the average UPS full-time delivery driver will earn $170,000 a year in pay and benefits.
However, the deal is a small price to pay compared to the damage that could have been wreaked had a strike occurred at UPS. The consulting firm Anderson Economic Group estimated that a 10-day strike at UPS would have cost the U.S. economy more than $7 billion.
UPS stock is one of Buffett’s smaller positions as he holds just 59,400 shares of the company worth $9.10 million. UPS stock has declined 12% year to date (YTD) but up 32% over five years.