Investing

Warren Buffett's Top Stock Picks Outperforming the Markets in 2017, but Berkshire Hathaway Isn't

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Now that the stock market indexes have posted six consecutive quarterly gains, 24/7 Wall St. has been reviewing some of the top areas that have stood out from the indexes. Some have been for the better, and some for the worse. The major U.S. stock indexes posted the following gains in the first quarter of 2016: Dow Jones Industrial Average up 5.0%, S&P 500 up 5.9% and Nasdaq 100 up almost 12%.

As of April 4, it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) has underperformed the markets with a mere 2.6% gain. It also turns out that Buffett’s top stock gainers so far in 2017 are handily outperforming the broader market indexes.

When investors hear about Buffett, they probably think about one of the wealthiest men in the world and about his being considered the world’s greatest investor of the modern era.

Buffett’s best performing stock holdings, out of more than 40 holdings, are outperforming the broader market indexes handily in 2017. This may stand out perhaps as odd, but most of these picks outperforming the markets are actually investment selections made by Buffett’s portfolio managers, Ted Weschler and Todd Combs, and rather than selections made by his own choosing.

The bull market is more than eight years old, and investors have proven for more than five years now that they will find any reason at all to buy each and every market pullback. Those same investors also are still looking for new trading and investing ideas. If Buffett and his team are hot on an idea, maybe it’s a good enough idea for the rest of us.

Here are the top performing Buffett stocks of 2017.

1. Apple Is Up 24%

Apple Inc. (NASDAQ: AAPL) has been grown as a stake by the Buffett team ever since the end of 2016, and it was selected by one of his portfolio managers last year. A gain of 24% should be impressive for any period, let alone one single quarter. Then add on top of it that Apple is the largest company by market capitalization as well.

Apple’s stock trades within a 52-week range of $89.47 to $144.50, with a consensus analyst price target of $146.76. The company has a total market cap of $753 billion.

2. Moody’s Is Up 19%

Moody’s Corp. (NYSE: MCO) was a position Buffett trimmed in prior years, and his praise of the endless free money from the pay-for-ratings model might not have been so popular during and after the Great Recession. Still, Buffett’s profit here is massive and Moody’s is again considered to be a safe investment by investors.

Moody’s has a 52-week range of $87.30 to $114.03 and a market cap of $21 billion. The consensus price target is $113.00.

3. Sirius XM Is Up Almost 16%

Sirius XM Holdings Inc. (NASDAQ: SIRI) is a selection by the Buffett portfolio managers. What may seem interesting here is that Berkshire Hathaway’s stake in the satellite radio monopoly is actually mixed between the Liberty shares and in the Sirius XM, rather than just in the actual Sirius XM shares alone. This stock was up 15.6% at the end of the first quarter.

Sirius shares have a consensus price target of $5.25 and a 52-week range of $3.74 to $5.53. The total market cap is $24 billion.

4. Visa Is Up Almost 15%

Visa Inc. (NYSE: V) has been grown slightly over time, and it may very well be the case that Buffett’s portfolio managers picked this as part of the credit card processing strategy by owning Visa, Mastercard and a huge stake in American Express. Visa was up 14.75% so far in 2017.

Visa has a total market cap of $206 billion. The consensus price target is $98.17, and the 52-week range is $73.25 to $92.05.

5. Charter Communications Is Up 14%

Charter Communications Inc. (NASDAQ: CHTR) is yet another selection that almost certainly was made by Team Buffett rather than by Buffett himself. This cable giant has grown on its own and from acquisitions, and the 9.4 million share stake of Berkshire Hathaway has fluctuated in recent quarters. Charter acquired Time Warner Cable and Bright House Networks for a combined $65.5 billion in 2016, and on top of being a cable giant it is one of the five largest residential telephone providers in America due to the phone, cable and web bundling.

Charter Communications has a 52-week range of $193.77 to $341.50 and a total market cap of $102 billion.

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