Recent regulatory filings made by Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) revealed that the holding company reduced its stake in Bank of America (NYSE:BAC) for the first time since 2019. Even the most favored of Warren Buffett stocks aren’t immune from a little profit-taking. 

Over three separate days in July, Berkshire sold 33.9 million shares of BAC stock for proceeds of nearly $1.5 billion and an average selling price of $43.56. According to WhaleWisdom.com, Berkshire paid an average price of $25.68 for BAC shares. That indicates Buffett’s pre-tax profit was approximately $630 million. 

That’s some gain, but then again, that’s what we’ve become accustomed to with Berkshire’s equity portfolio. Despite the sale, Bank of America remains Berkshire’s second-largest position accounting for 9.5% of its $398 billion portfolio. 

BAC isn’t the only stock Berkshire should probably trim. However, I’m more interested in the Warren Buffett stocks the holding company should be adding to in 2024. 

Here are my three choices straight from CNBC’s Berkshire portfolio tracker.    

Amazon (AMZN)

Amazon (NASDAQ:AMZN) is 0.5% of Berkshire’s portfolio. It owns 10.0 million shares, or 0.1% of the Seattle company.

Buffett often talks about how he missed an opportunity to buy Amazon stock early on in the company’s history. In 1994, when it was just a bookstore, he was given the opportunity to buy. He said no. He did again three years later in 1997 when it became public. 

In 2019, before Berkshire bought Amazon stock, Buffett admitted that he missed the opportunity because, in his head, he couldn’t move from the bookselling business model to something more diversified and technologically driven.

“I’d always admired Jeff,” Buffett told Yahoo Finance editor Andy Serwer. “I mean, I met him 20 years ago or so, and I thought he was something special, but I didn’t realize you could go from books to what’s happened there.”

Thanks to the company’s largest position, Apple (NASDAQ:AAPL), Buffett knows a lot more about tech stocks, which should help him evaluate all the different revenue streams Amazon has and the potential new ones down the road. 

Mitsubishi (MSBHF)

Mitsubishi (OTCMKTS:MSBHF) is one of the five Japanese trading houses in which Berkshire first invested $6 billion in August 2020. He could not believe he could invest in these historic businesses. 

“I just thought these were big companies. They were companies that I generally understood what they did. Somewhat similar to Berkshire in that they owned lots of different interests,” Buffett told CNBC’s Becky Quick in April 2023. “And they were selling at what I thought was a ridiculous price, particularly the price compared to the interest rates prevailing at that time.”

He boosted the holding company’s stakes in all five in April 2023. It now owns 8.6% of Mitsubishi, the largest ownership stake of the five; it accounts for 1.8% of Berkshire’s equity portfolio. The others account for 1.5%, 1.4%, 0.7% and 0.6%. 

He said in 2023 he would consider buying more. That’s a smart move. 

A friend of mine from high school worked at the Canadian arm of Mitsubishi’s auto business after university. He stayed there for years and used to tell me about all the different businesses the parent company was into.

If there’s a business that Buffett understands backward and forward, it is the conglomerate, which is precisely what these trading houses are. 

Moody’s (MCO)

Moody’s (NYSE:MCO) is one of the three big credit ratings companies along with S&P Global (NYSE:SPGI) and Fitch Group is owned 100% by privately held Hearst Corp.

Moody’s is Berkshire’s eighth-largest holding accounting for 2.9% of the holding company’s equity portfolio. Its $11.3 billion stake represents 13.5% of Moody’s stock. 

Berkshire first bought MCO stock in Q4 2000. It owned 24 million shares as of Dec. 31, 2000. They were valued at approximately $617 million at the end of 2000. Today it owns 24.67 million, so it’s added about 670,000 shares over 24 years. That’s not much.  

It reported Q2 2024 results on July 23. Revenues were up 22% year-over-year to $1.8 billion, while its earnings per share jumped 47% to $3.02. As a result, it raised its full-year EPS estimate to $11.20 at the midpoint of its guidance. 

Its stock isn’t cheap at about 42x its 2024 earnings but you have to pay for quality. 

Further, based on its trailing 12-month free cash flow of $2.09 billion and an enterprise value of $28.65 billion, it has a free cash flow yield of 7.3%. Anything above 8% is value territory. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor held a long position in AMZN.