Warren Buffett is one of the greatest investors ever, if not the greatest. His company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), has a roughly $294 billion stock portfolio comprised of 45 stocks and exchange-traded funds that have helped make Berkshire the giant it is today.
Throughout the year, though, it has taken its foot off the gas pedal and slowed its stock buying and share repurchases. In the third quarter, Berkshire barely bought any stocks, didn't repurchase any of its own stock for the first time since 2018, and increased its hoard of cash and short-term U.S. Treasuries to more than $320 billion.
Although Buffett and Berkshire aren't in a stock-buying mood, they still hold many companies with high conviction. Here are two to buy hand over fist in November.
1. Sirius XM Holdings (33% stake)
Berkshire owns 33% of the digital audio company Sirius XM Holdings(NASDAQ: SIRI), and it's the 15th largest position in the conglomerate's equities portfolio. Buffett got involved in Sirius in 2016 and has been in and out of it ever since.
He seems to have a much higher conviction in the name after increasing his stake in the company by close to 940% in October alone.
Sirius spun off Liberty Media and conducted a stock split earlier this year. The stock has declined more than 50% this year, despite the bull market, as investors have grown concerned about declining subscribers and high debt.
However, the company is embarking on a new plan to boost paying subscribers, which involves acquiring exclusive advertising and distribution rights to popular podcast brands like the advice and comedy podcast Call Her Daddy; SmartLess, hosted by the actors Jason Bateman, Will Arnett, and Sean Hayes; and Conan O'Brien's Team Coco.
These deals are not cheap but can draw new audiences to the platform and provide more appeal to advertisers. While Sirius is still losing subscribers, the pace has slowed in the past two quarters.
Sirius has other appealing qualities. It is technically a pure monopoly, having the only satellite radio license in the U.S. It is not expensive, trading at less than 8 times earnings, and it has a dividend yield north of 4%, so investors are being paid to wait while the company tries to execute a turnaround.
2. Visa (0.4% stake)
It's well known that Buffett loves investing in companies that have or can build strong competitive moats. Sirius has a legal monopoly, but Visa(NYSE: V) is not far behind, having developed a network crucial to the global payments system, which will be difficult for challengers to replicate.
Berkshire first acquired a stake in Visa in 2011 and owns 0.4% of its shares outstanding. It is the 17th largest holding in Berkshire's equities portfolio at 0.8%.
Although you may see the Visa brand on your credit and debit cards, the company doesn't lend money to consumers. Instead, it serves as an intermediary for banks, consumers, and merchants in more than 200 countries.
Whenever there is a card transaction, you need a payment network to help make it happen. Visa collects a tiny fee on each transaction and plays a large role in setting the rules for the payments system. It processed more than 233 billion transactions in its fiscal 2024, up 10% year over year.
While Visa does have a few competitors like Mastercard, the company handles roughly 60% of debit card transactions in the U.S. Its dominance in debit transactions recently caught the attention of the U.S. Justice Department, which sued Visa alleging that the company "has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market."
Regulators have ratcheted up their antitrust agenda in recent years. But the electoral victory of Donald Trump in the presidential race is expected to lead to a major shake-up at the Justice Department, so the agency may not pursue these cases as aggressively down the road.
Visa recently reported strong earnings and returned close to $28 billion to shareholders through dividends and share repurchases. It has called the Justice Department's claims "meritless" and said it plans to defend itself "vigorously" in court. Given the underperformance of the stock compared to the broader market, I think this is an opportune time to buy shares for interested investors.
Should you invest $1,000 in Sirius XM right now?
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
