My Top 3 Favorite Stock Picks From the Berkshire Hathaway Portfolio

  • These Berkshire Hathaway stock picks could make for interesting additions to your portfolio.
  • Kroger (KR): Kroger’s grocery business offers a predictable revenue stream.
  • Occidental Petroleum (OXY): Occidental will likely see increased demand from geopolitical concerns.
  • Sirius XM (SIRI): Sirius XM is speculative but enticing because the Oracle likes it.
Berkshire Hathaway Stock Picks - My Top 3 Favorite Stock Picks From the Berkshire Hathaway Portfolio

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Warren Buffett’s conglomerate Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) is always of interest among market participants. Known as the Oracle of Omaha, Buffett is a legendary investor: when he speaks, people listen. You don’t even have to agree with the man to appreciate the insights he’s able to provide. However, certain ideas within the bucket of Berkshire Hathaway stock picks are more intriguing than others.

Granted, if there was a basket of securities to acquire, then going with whatever the Oracle decides isn’t the worst plan in the world. What makes Buffett such an inspiration to many is that he has navigated both bullish and bearish market cycles. With other individual-based systems, it’s unclear whether they will stand the test of time. There’s no such hesitation with Berkshire Hathaway stock picks.

Still, it’s difficult to buy all of the individual holdings of the conglomerate. And one can make the argument that it may not be ideal. Instead, these relevant enterprises could potentially offer the best chance for success.

Kroger (KR)

Kroger (KR) Supermarket. The Kroger Co. is One of the World's Largest Grocery Retailers.
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Let’s start with grocery giant Kroger (NYSE:KR). For me, this is an easy idea to discuss under the context of favorite Berkshire Hathaway stock picks. No, it’s not the most exciting idea out there. Indeed, it’s rather boring. However, boring under the current environment of consumer challenges and geopolitical flashpoints is a positive. Boring gets you not in first place but at least to the finish line.

Let’s talk numbers. In the past year since the first quarter of fiscal 2025, Kroger generated an average earnings per share of $1.17. This figure beat the collective consensus view of $1.08, yielding an earnings surprise of 8.6%. It’s worth pointing out that the company beat all four quarters rather than relying on certain standout performances.

It also appears to be undervalued relative to the defensive retail industry. Right now, KR stock trades at 12.27X forward earnings and 0.26X trailing-year sales. That said, analysts anticipate bumps in the road for the current fiscal year.

However, by the following year, the company can get back on the expansion track with EPS of $4.55 on projected revenue of $152.16 billion. Also, the forward dividend yield of 2.35% (with a low payout ratio of roughly 39%) help sweeten the deal.

Occidental Petroleum (OXY)

A magnifying glass zooms in on the Occidental Petroleum website.
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Another solid idea for top Berkshire Hathaway stock picks is Occidental Petroleum (NYSE:OXY). A hydrocarbon giant, Occidental specializes in the oil and gas exploration and production projects. Also known as the upstream component of the energy value chain, this industry will likely see increased demand. With geopolitical tensions soaring in the Middle East as well as in Ukraine, supply chain stability will be a key issue.

Bottom line, the world will need access to more inventory reliably. Therefore, OXY stock should see a march higher in the months and years ahead. Further, the financials seem to align with the narrative. There was a hiccup in Q2 2023. Since then, however, the company has been exceeding its bottom-line targets. In the past year since Q1, the average EPS stood at 81 cents, above the consensus of 72 cents.

Now, OXY stock isn’t the cheapest idea in the upstream space, trading at 2.15X sales. However, in the past year, the market previously accepted a multiple of 1.97X.

Admittedly, the consensus view for 2024 sales calls for a dip of 1.4% to $28.51 billion. But given the broader context, the high-side estimate of $30.07 billion seems more reasonable.

Sirius XM (SIRI)

The Sirius XM (SIRI) mobile app logo on a smartphone screen.
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Finally, we’ve arrived at the riskiest idea among Berkshire Hathaway stock picks. Sirius XM (NASDAQ:SIRI) isn’t ideal for every investor. Priced in the low-single digits, SIRI would be what many consider a penny stock. Plus, over the past few years, the enterprise – which specializes in satellite radio services – has suffered a steep drop in market value. Nevertheless, the Oracle likes it.

That warrants at least some investigation. What’s interesting here is that in terms of face-value performances, Sirius held its own. However, the recent Q2 report was not pleasant, with the company disclosing a decline in subscribers and suffering a revenue hit. One positive is that the company is maintaining its guidance for Q3, which was surprising.

Regarding the valuation, SIRI stock trades hands at 1.49X sales. That’s discounted relative to the prior year’s average metric of 2.02X. Of course, one must take into account the eroding top line.

Looking ahead over the next two years, Sirius may end up posting EPS of 32 cents on revenue of $8.93 billion by the end of 2025. Last year, the company delivered earnings of 32 cents per share on sales of $8.95 billion. That said, the high-side estimate calls for EPS of 36 cents on $9.18 billion on the top line. A fundamental change, such as a wider return to the office could potentially boost the sales figure.

On the date of publication, Josh Enomoto 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 did not have (either directly or indirectly) any positions in the securities mentioned in this article.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


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