But sometimes regulators temporarily give companies a pass on reporting when doing so could prevent the buyer from executing a long-term purchase plan. In Buffett’s case, news that he’s snatching up shares of some obscure or overlooked stock could trigger a buying frenzy, pushing prices beyond what he’s willing to pay and interrupting his long-term plan.
News of Warren Buffett’s secret stock came out in late 2023 after the company’s third-quarter filing, sparking discussion and intrigue that most expected to end when Buffett reported the transaction in time for the next report – which didn’t end up happening. Instead, Berkshire Hathaway’s fourth-quarter Form 13F (an asset manager’s equity holding report) still included the “Manager has omitted from this public Form 13F one or more holding(s) for which it is requesting confidential treatment from the U.S. Securities and Exchange Commission” verbiage. In other words, we’re still waiting to find out what Buffett’s secret stock is – but here are stocks Buffett might be holding.
Paypal (PYPL)
Buffett’s stock picks tend to be value-driven, and few sectors are as easily quantified from a value perspective as banking. At the same time, Buffett and his team famously eschew next-gen tech investing, including FinTech, exemplified by deceased vice chair Charlie Munger’s bizarre battle against crypto. But Paypal (NASDAQ:PYPL) may represent an exception to Buffett’s tech-avoidance strategy, as this tech stock is decidedly undervalued and has the market longevity to prove its worth in a long-term portfolio.
Ultimately, PayPal could offer Buffett’s financial holdings greater diversification away from legacy banking that he typically prefers, considering the company’s dominant digital payment processing position before even factoring in subsidiary Venmo’s peer-to-peer payment popularity. At the same time, the company’s value-driven metrics are shockingly attractive for an investor as conservative as Buffett tends to be. As of 2023’s fourth quarter, PayPal’s free cash flow per share stands at $2.29, handily beating Buffett’s top banking stock Bank of America’s (NYSE:BAC) $1.47 ratio. At the same time, PayPal’s price-to-earnings ratio is fairly low considering its long-term growth prospects, sitting at just 14x.
This makes PYPL one of those stocks Buffett might be holding.
BlackRock (BLK)
Frankly, the fact that Berkshire Hathaway and Buffett aren’t already major backers of BlackRock (NYSE:BLK) is somewhat surprising. Generally, the company has all of the traits that should make it a top-tier Warren Buffett stock: highly liquid, fantastic financial management, strength, staying power, and sufficiently diverse revenue streams to help offset ventures that Buffett may not be down with, like its crypto forays. Critically, though, at a $121.82 billion market cap, BlackRock is large enough to make a hefty investment greater than 5% of the float worth going for, considering Berkshire’s own megalithic size means it takes a lot to make an investment worth executing. Likewise, Buffett is fairly famous for staking bets on the people behind the process, and few business leaders are as well-known for their excellent track record and prudent management as BlackRock’s co-founder and CEO Larry Fink.
While BlackRock may not be as “operational” as Buffett tends to like his stock picks, he’s also likely thinking about Berkshire Hathaway’s future as he winds down his business interests – and staking a chunk of change on a diversified wealth manager like BlackRock can help prevent any specific investment over-concentration in Buffett’s absence.
JPMorgan Chase (JPM)
As alluded to already, Buffett’s mysterious stock likely falls within the financial services sector, as evidenced from Berkshire Hathaway’s increased reported cost basis in “banks, insurance, and finance” equities in its third- and fourth-quarter filings. And JPMorgan Chase (NYSE:JPM) represents the legacy bank stock style Buffett has historically fallen for. He previously invested in the financial powerhouse in 2018, only to divest by the end of 2020.
Buffett and JPMorgan Chase CEO Jamie Dimon also have a long-standing friendship. Buffett even lauded Dimon’s leadership during the bank’s challenges in 2013, further reinforcing Buffett’s “people first” preference when it comes to investment opportunities.
With a price-to-earnings ratio of just 11x, JPMorgan Chase’s stock offers affordability, coupled with the bank’s esteemed reputation within the sector. Adding to the connection, Todd Combs, an investment manager at Berkshire Hathaway, serves on JPMorgan Chase’s board of directors. While, individually, each point may not mean much, putting them all together points to a strong possibility that Buffett’s secret stock is JPMorgan Chase.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.