Highlights;
- Berkshire Hathaway’s Q2 purchases include UnitedHealth, Nucor, and Constellation Brands.
- Constellation Brands is highlighted for its strong competitive position and undervaluation.
- The company boasts strong free cash flow and active share buybacks.
- It aligns with Buffett’s value investing strategy.
In 2025, Warren Buffett expanded Berkshire Hathaway’s investment portfolio, but one particular stock catches the eye. Despite challenges in the market, Buffett managed to uncover several opportunities, with one standing out as a prime investment.
Berkshire Hathaway, under Buffett’s guidance, has grown into a trillion-dollar company primarily through strategic stock investments, a strategy that remains unchanged. However, the current market has posed significant challenges, leading to more stock sales than purchases over the past three years. This has resulted in a substantial cash reserve of $344 billion as of June.
In the last quarter, Berkshire added $3.9 billion in equities, including 10 publicly traded stocks. Among these, UnitedHealth, Nucor, Lennar, Constellation Brands, Pool Corp, Lamar Advertising, Allegion, Heico, Chevron, and Domino’s Pizza were purchased. Additionally, a new position in D.R. Horton was established, though slightly reduced in the second quarter.
While each investment presents potential, Constellation Brands emerges as the standout. With exclusive rights to major Mexican beer brands like Modelo and Corona, the company has expanded its market share, becoming the second-largest U.S. beer distributor. Despite industry headwinds, Constellation has continued to gain market share, supported by strategic distribution and marketing efforts.
Its wine and spirits segment, though underperforming, is being streamlined. Constellation’s robust free cash flow, projected at $1.5 to $1.6 billion annually, supports share repurchases and dividends. Trading at less than 13 times forward earnings, the stock offers an attractive valuation, aligning with Buffett’s value investing philosophy. This makes Constellation Brands a compelling choice for those following Buffett’s strategy.
Disclosure: Adam Levy holds a position in UnitedHealth Group. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, D.R. Horton, Domino’s Pizza, and Lennar, and recommends Constellation Brands, Heico, and UnitedHealth Group. The Motley Fool’s disclosure policy is available for review.
