Warren Buffett was a net seller of stocks over the first nine months of 2023. When Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) releases its fourth-quarter report, it will likely show he sold more stocks than he bought for the full year.
Last year, there were nearly $33 billion in stock sales to just $9 billion in purchases. He completely exited several long-held stocks like Johnson & Johnson (NYSE:JNJ), Mondelez International (NASDAQ:MDLZ) and UPS (NYSE:UPS) while others he just trimmed here and there. The other day, he filed notice with the Securities and Exchange Commission (SEC) that he again reduced his stake in ratings agency Moody’s (NYSE:MCO) to 11%. At one point he owned 20% of the stock.
Below are three stocks he was selling in 2023. Let’s see if these Warren Buffett stocks to sell should be jettisoned from your portfolio too.
Amazon (AMZN)
Although Berkshire Hathaway still owned a sizable position in Amazon (NASDAQ:AMZN) at the end of the third quarter, Buffett pared back the holding by 551,000 shares, or over 5%. If you’ve heard of buyer’s regret, do you think Buffett has seller’s regret?
Amazon reported stellar earnings the other day as artificial intelligence (AI) drove the cloud service business to new heights. AMZN stock soared on the news. Since the end of October, Amazon is up 28%.
It’s not likely Buffett regrets the decision as he rarely seems to be affected by short-term stock movement. He’s generally a long-term investor who likes a bargain. On the surface, Amazon certainly didn’t seem to be one back then and definitely doesn’t appear to be so today after the big rally. Yet cloud services will be a big growth driver for the foreseeable future, and Amazon Web Services is the industry leader by far. Buffett still owns 10 million shares worth $1.2 billion. I’m not sure I’d be a seller of Amazon at these levels.
HP (HPQ)
The second stock Buffett sold down is computer hardware maker HP (NYSE:HPQ). Although the stock is off 10% in 2024, it’s still up 6% from the end of the third quarter. But go back to the second quarter when the Oracle of Omaha began selling his shares. HP stock is down 14%, so on the whole, Buffett seems to have gotten it right.
PC sales are in a secular decline. Gartner says the worldwide PC market contracted 9% in the third quarter last year, and the eighth consecutive quarter shipments fell. Yet HP hopes to lead a turnaround in sales with the release of an AI PC this year.
Already, HP sells AI workstations for enterprise customers. But a consumer-class AI PC could cause a renaissance in sales. AI is infusing everything and turbocharging growth. An AI-enhanced PC could have the same effect as it takes work, gaming, and entertainment to new levels.
Yet, that’s all speculative. Therefore, it’s understandable that Buffett would want to reduce his HP holdings. I’d still be tempted to hold onto at least a small stake in the event a new revolution does materialize.
Chevron (CVX)
Integrated oil and gas giant Chevron (NYSE:CVX) has been on the outs with Buffett for a long time. Yet, the investing guru dives ever deeper into the sector by simultaneously buying Occidental Petroleum (NYSE:OXY). When Buffett sold 53 million shares of Chevron last year, he purchased 54 million shares of Occidental.
Of course, Berkshire Hathaway still has $18.6 billion worth of Chevron stock. But at $14.5 billion, Occidental is closing the gap. Both stocks have been a dud, though, each dropping around 7% in value since the end of the first quarter.
Where Chevron does shine, however, is in paying dividends. The oil and gas giant pays $6.49 per share yielding 4.3% annually. Conversely, the Permian Basin star pays just $0.68 per share and yields 1.2%. Also, Chevron just announced an 8% dividend hike to $6.52, the 37th consecutive year the energy stock raised its payout.
Oil stocks have long underperformed the market, but there is still a big role for leaders like Chevron to play in the future.
On the date of publication, Rich Duprey held a LONG position in CVX and JNJ stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
