The Stock Warren Buffett Is Virtually Guaranteed to Buy in 2025 Is a Company He's Invested Close to $78 Billion Into (Hint: It's Not Apple!)

Meanwhile, Warren Buffett has parted ways with north of 266 million shares of Bank of America (BofA) since July 17, based on available data from Form 4 filings. This type of filing is required when Berkshire buys or sells shares of a public company that it holds at least a 10% stake in. Since Berkshire now holds less than 10% of BofA’s outstanding shares, it’s no longer required to alert investors via Form 4 every time it sells shares.

Over the last eight quarters, Berkshire Hathaway’s brightest minds, led by Buffett, have collectively sold $166.2 billion more in stocks than they’ve purchased. This looks to be a clear-as-day warning to Wall Street that the stock market is historically pricey and value is becoming tougher to find with each passing quarter.

But there is one stock Warren Buffett is almost certain to buy in 2025, especially with Berkshire Hathaway sitting on an all-time record $325 billion in cash.

While there are a couple of standout value stocks in Berkshire Hathaway’s portfolio, a couple of which the Oracle of Omaha and his team have been purchasing of late (e.g., Sirius XM Holdings), the stock Buffett is likeliest to purchase in 2025, which won’t be found in Berkshire’s 13Fs, is (drum roll) shares of his own company.

Prior to July 2018, Warren Buffett had no means of putting his company’s cash to work via buybacks. The rules governing share repurchases required that Berkshire Hathaway’s stock trade at or below 120% of book value for buybacks to take place. Unfortunately for Buffett, his company’s stock never fell below this threshold.

On July 17, 2018, Berkshire’s board amended the buyback criteria to allow its company’s chief more freedom to repurchase shares. Under the new rules, buybacks were allowed with no ceiling or end date as long as Berkshire Hathaway had at least $30 billion in combined cash, cash equivalents, and U.S. Treasuries on its balance sheet, and Warren Buffett believes his company’s shares are intrinsically cheap. This latter criterion is intentionally vague to give Buffett the freedom to buy back stock at will.

For 24 consecutive quarters since these criteria were amended, Warren Buffett repurchased shares of his company’s stock. The cumulative value of these buybacks is close to $78 billion, which is far more than he’s spent buying shares of Apple, Bank of America, and Occidental Petroleum on a combined basis.

Interestingly, the September-ended quarter marked the first time since the buyback rules were amended that Warren Buffett didn’t green-light any share repurchases. This likely has to do with Berkshire’s stock trading for a 60% to 70% premium to its book value, which represents its loftiest price-to-book value in roughly 16 years. As an ardent value investor, Berkshire’s chief decided to sit on his hands.

However, having $325.2 billion worth of cash in Berkshire Hathaway’s coffers should give the Oracle of Omaha the liberty of being a bit looser with his perception of value — at least when it comes to shares of his own company. With Buffett repurchasing shares for 24 straight quarters prior to the most recent quarter, it seems only logical that Berkshire Hathaway is the stock he’s virtually guaranteed to buy at some point (if not every quarter) in 2025.

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American Express and Bank of America are advertising partners of Motley Fool Money. Sean Williams has positions in Bank of America and Sirius XM. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

The Stock Warren Buffett Is Virtually Guaranteed to Buy in 2025 Is a Company He’s Invested Close to $78 Billion Into (Hint: It’s Not Apple!) was originally published by The Motley Fool