The 1 Stock Warren Buffett Definitely Didn't Buy in Q2

Yahoo

17 hours ago

Key Points
There are lots of likely candidates that Buffett didn't buy last quarter.
However, we can know for sure that Buffett didn't buy one stock in Q2.
While Buffett isn't buying this stock, it could be a good pick for other investors.
10 stocks we like better than Berkshire Hathaway ›
Warren Buffett plans to step down as CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) at the end of this year. However, that doesn't change the level of scrutiny his stock picks receive in the least. Many investors remain highly interested in knowing which stocks the "Oracle of Omaha" is buying.
We won't know the stocks Buffett bought in the second quarter of 2025 for another couple of weeks or so. Berkshire typically submits the 13F regulatory filing disclosing its equity holdings for the second quarter in mid-August of each year. However, there's one stock that the legendary investor definitely didn't buy in Q2.
Lots of likely candidates
Before we get to that one stock, I'll readily admit there are lots of likely candidates that Buffett didn't buy last quarter. Valuation alone would disqualify a boatload of stocks. For example, Palantir Technologies sports a forward price-to-earnings ratio of around 278. The odds against Buffett buying a stock trading at such a premium are slim.
I think the likelihood that Buffett initiated new positions in stocks for which he recently exited positions is also very low. Berkshire sold all of its remaining shares of Citigroup and Nu Holdings in the first quarter of 2025. It would be quite surprising if Buffett or his investment managers turned around and bought these two stocks again in Q2.
Berkshire's 10Q filing for the second quarter, which was released over the weekend, also provided big hints about other stocks that Buffett probably didn't buy. For example, Berkshire recorded an impairment of $5 billion on its investment in Kraft Heinz. Could the conglomerate have put more money in a stock that has lost it so much money? It's theoretically possible, but not probable.
Another likely candidate that Buffett probably didn't buy is American Express. Berkshire revealed in its latest quarterly update that it owned 151.6 million shares of the financial services giant at the end of Q2. At the end of Q1, Berkshire owned 151,610,700 shares of American Express. Maybe Buffett added a small number of AmEx shares in Q2, but I doubt it.
The slam-dunk stock that Buffett didn't buy in Q2
The above list of potential stocks that Buffett didn't buy in Q2 isn't exhaustive by any means. However, there's one slam-dunk stock that Buffett didn't buy in Q2: Berkshire Hathaway itself. Berkshire's 10Q for the second quarter stated bluntly, "There were no share repurchases during the first six months of 2025."
Buffett has loved stock buybacks in the past. Berkshire's buyback program allows him to authorize repurchasing shares any time he wants, as long as the company's cash, cash equivalents, and U.S. Treasury bill holdings don't fall below $30 billion. With Berkshire's cash position at $344 billion, Buffett could have bought back shares if he chose to do so. So why didn't he? Buffett is probably concerned about Berkshire's valuation.
The stock repurchase program allows Buffett to initiate share buybacks when he "believes that the repurchase price is below Berkshire's intrinsic value." Even though Berkshire's share price has fallen more than 10% from its peak earlier this year, the stock still trades at 23.4 times forward earnings and is above its levels throughout most of 2024.
An excise tax of 1% on stock buybacks that went into effect in 2023 probably also factors into Buffett's reluctance to repurchase shares. He even mentioned this during Berkshire's annual shareholder meeting in May 2025, stating, "If Berkshire buys Berkshire shares in repurchases, we now pay more than you will pay if you buy Berkshire shares." Buffett added that the excise tax "hurts some of our investee companies quite substantially."
Is Berkshire Hathaway a good pick for other investors?
As Buffett said, ordinary investors aren't affected by the excise tax. Is Berkshire Hathaway a good pick even though it's not buying back its own shares? I think so.
Granted, the stock's valuation looks high at first glance. However, I don't think that's a concern for long-term investors considering Berkshire's growth prospects.
Some might be worried about Buffett stepping down as CEO. He still plans to be actively involved as chairman of the board, though. Importantly, Buffett is confident in the abilities of his successor, Greg Abel, telling shareholders earlier this year that he doesn't plan on selling a single share. He also expressed his view that Berkshire's prospects will be better with Abel as CEO.
Buffett definitely isn't buying Berkshire Hathaway these days. But that doesn't mean you shouldn't.
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American Express is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Keith Speights has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway and Palantir Technologies. The Motley Fool recommends Kraft Heinz and Nu Holdings. The Motley Fool has a disclosure policy.
The 1 Stock Warren Buffett Definitely Didn't Buy in Q2 was originally published by The Motley Fool