Warren Buffett’s Berkshire Hathaway is set to file its latest 13F with the SEC, revealing a new mystery stock position. The filing will provide insight into Buffett’s investment strategy, particularly in the commercial, industrial, and other sector.
Berkshire has been quietly building stakes in various companies without publicly disclosing them, as this would impact their prices. Analysts have identified several mega-cap names in this sector that Berkshire doesn’t currently own, including GE Aerospace, RTX Corp, Lockheed Martin, Caterpillar, Boeing Co, Honeywell, GE Vernova, and Deere & Company.
WarrenAI, Investing.com’s AI stock research assistant, suggests that Caterpillar stands out as a strong candidate. The company boasts a 16.4x P/E ratio, robust 55.4% ROE, and a 5.5% free cash flow yield, aligning with Berkshire’s investment style of durable profitability and shareholder-friendly policies.
Deere & Company is another stock that WarrenAI likes, citing its lower P/E ratio (13.5x) and high ROE (31.8%), but also noting the revenue contraction (-15.8% in FY2024), which could affect Buffett’s decision.
While other stocks like GE Aerospace, RTX Corp, Boeing Co, and Honeywell show promise, they are either too expensive or lack key profitability data. GE Vernova stands out for its growth potential but comes with a high P/E ratio of 71.7x. Lockheed Martin is also an option, despite its high leverage.
WarrenAI concludes that Caterpillar would likely be at the top of Berkshire’s list, followed by Deere if revenues stabilize. This analysis suggests that both companies offer the necessary moat, cash generation, and management discipline that have defined Berkshire’s portfolio for decades.
Source: https://www.investing.com/news/stock-market-news/buffetts-secret-stock-warrenai-thinks-its-found-the-answer-4193218