3 Lessons from Buffett's Apple Stock Sales

(0:30) - How Much Should You Follow The 13-F Filings?(4:10) - Investing Lessons To Learn From Warren Buffett(27:45) - Episode Roundup: BRK.B, AAPL, COST, V, AXP            Podcast@Zacks.com Welcome to Episode #396 of the Value Investor Podcast.Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.Almost a year ago, Wall Street learned that Berkshire Hathaway (BRK.B) was selling lots of shares of its largest equity holding, Apple. Apple is one of the “4 pillars” of Berkshire Hathaway and a key component of the business.At the May 2024 Berkshire Hathaway annual meeting, Warren Buffett said they were selling for tax reasons. But the selling of the shares continued. As of the third quarter of 2024, Berkshire had sold 100 million shares. It now owns just 300 million. Apple is now just 26.2% of the Berkshire Hathaway equity portfolio, down from around 50%.There are three important lessons value investors can learn from Buffett’s sale of Apple shares.1.      Buy and hold forever is a myth2.      Don’t fall in love with your stocks3.      You can’t market timeValuations: Does It Matter? 1.      Apple Inc. (AAPL)When Berkshire Hathaway bought Apple in the first quarter of 2016, it was cheap on a price-to-earnings (P/E) basis. It had a P/E under 15, which usually indicates a company is a value. But Apple is now trading with a forward P/E of 32.3%.And Apple has a PEG ratio, which measures the P/E divided by growth, of 2.4. A PEG ratio under 1.0 indicates a company has both value and growth. But Apple is more expensive.Will we ever really find out why Buffett decided to start selling Apple in 2024?2.      American Express Company (AXP)American Express is now Berkshire Hathaway’s second largest holding in its equity portfolio. It makes up 15.4% of the portfolio. Shares of American Express have been on a tear the last year, adding 47%.Yet American Express still has attractive valuations. It trades with a forward P/E of 20 and has a PEG ratio of 1.5.Is this a buying opportunity in American Express?3.      Visa Inc. (V)Visa is also a holding in the Berkshire Hathaway equity portfolio. Buffett bought it in 2011 and has never sold, or bought, more shares even as valuations soared in 2020 and 2021. Visa traded over 40x during the pandemic.It was a small position originally, and remains so, even though the shares were up 27.8% over the last year. Yet, Visa is still trading with a forward P/E of 31. That is “cheaper” than Apple but it’s too high to be considered a classic value stock.Should investors follow Berkshire Hathaway into Visa in 2025?4.      The Coca-Cola Company (KO)Coca-Cola has been part of Berkshire Hathaway’s portfolio for decades. It remains one of the largest positions in the equity portfolio, at 10.8%.Shares of Coke are up 16.9% over the last year. It’s not cheap, with a forward P/E of 23.5. Coca-Cola also has a PEG ratio of 3.8. A PEG under 1.0 indicates growth and value.Is Coca-Cola still a buy in 2025?5.      Costco Wholesale Corp. (COST)Costco is not currently owned by the Berkshire Hathaway portfolio but it has its die-hard investors, which is similar to Apple. Shares of Costco are up 49% over the last year to new all-time highs.Costco doesn’t come cheap. It is now trading at 59x forward earnings. That is nearly double the valuation of Apple or Visa. Costco will report earnings again on Mar 6, 2025, so investors will soon hear how 2025 is progressing.Is Costco too hot to handle in 2025?What Else Should You Know About Buffett’s Sales of Apple Shares?  Tune into this week’s podcast to find out.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report CocaCola Company (The) (KO): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks