5 Warren Buffett Stocks to Watch After Berkshire Hathaway’s Latest Filing

Warren Buffett’s Berkshire Hathaway BRK.A BRK.B just filed its 13F for the first quarter of 2025. Here’s a look at the stocks that the team bought and sold during the first quarter and several undervalued Warren Buffett stocks to buy from Berkshire Hathaway’s portfolio today.

What Stocks Berkshire Hathaway Bought Last Quarter

Worries about DeepSeek’s AI disruption and policy uncertainty around tariffs briefly sent the US stock market into correction territory during the first quarter.

What buying did Warren Buffett and his colleagues do during the downturn? Not much.

They didn’t add any new positions to the portfolio during the first quarter, though they did add to several existing positions, including Occidental Petroleum OXY, Verisign VRSN, Sirius XM SIRI, Heico Corp HEI, and Domino’s Pizza DPZ. Notably, Buffett and team doubled Berkshire’s stake in Pool Corp POOL and Constellation Brands STZ.

Apple AAPL remained the largest holding in Berkshire’s publicly traded portfolio at the end of the first quarter.

What Stocks Berkshire Hathaway Sold Last Quarter

Buffett and his team continued to reduce Berkshire’s exposure to the US financial-services industry during the first quarter, scaling back the portfolio’s positions in Bank of America BAC and Capital One Financial COF and selling what remained of its position in Citigroup C.

Also during the first quarter, Berkshire continued to trim its positions in Charter Communications CHTR, Liberty Media Corp C Liberty Formula One FWONK, and T-Mobile TMUS, just as it did during the fourth quarter of 2024. It scaled back in Davita DVA and sold its entire position in NU Holdings NU, too.

The 5 Warren Buffett Stocks to Buy Now

Most of the publicly traded stocks held by Berkshire Hathaway are fairly valued or overvalued today, according to Morningstar’s metrics. Here are several undervalued stocks from its portfolio that look most attractive to Morningstar’s analysts.

1. Ally Financial ALLY
2. Amazon.com AMZN
3. Constellation Brands STZ
4. Kraft Heinz KHC
5. Occidental Petroleum OXY

Here’s a little bit about why we like each of these undervalued stocks, along with some key metrics for each. All data is as of May 14, 2025.

Ally Financial

• Morningstar Rating: 4 stars
• Morningstar Economic Moat Rating: None
• Morningstar Capital Allocation Rating: Standard
• Industry: Credit Services

Berkshire Hathaway owns more than 9% of Ally Financial’s stock. While Ally offers auto insurance, commercial lending, mortgage finance, and credit cards, auto loans remain its core focus and largest source of revenue. A slower auto market and higher credit costs have weighed on recent results, but Ally’s improved funding structure should lead to better returns than the firm has historically delivered. The stock trades 20% below our $45 fair value estimate.

Here’s what Morningstar analyst Michael Miller had to say about the stock after the company’s first-quarter earnings release:

Adjusted for $495 million in one-time portfolio repositioning expenses, Ally Financial reported $0.58 in adjusted earnings per share, up from $0.41 last year. These results translate to an 8.3% return on average equity.

Why it matters: This was a messy quarter for Ally, with portfolio repositioning losses, the sale of its credit card business, and elevated weather-related insurance expenses all occurring at once. However, the firm’s underlying results show improvement as it recovers from a string of poor results.

• There were clear signs that the firm is starting to turn a corner on its credit issues, which have been a headwind for the bank. Retail auto net charge-offs fell to 2.12% of total loans from 2.27% last year, the first annual decline since 2021.

• We expect credit losses to remain elevated in 2025, but the firm’s credit quality should continue to improve over time as the effect of its tighter underwriting flows through. This will bear some monitoring given tariff-related uncertainty, but higher car prices are a positive for the firm’s credit quality.

The bottom line: We maintain our $45 fair value estimate for no-moat-rated Ally. We see the shares as undervalued at the current price as we believe the market is focusing too much on the firm’s recent results, which have been cyclically depressed, and not the firm’s long-term profitability.

• We expect the firm’s net interest margin to expand in 2025. As the firm’s lower-yielding loans and mortgages roll off into higher-yielding loans, this will provide a natural tailwind, while the firm’s diminished deposit needs give it room to be more aggressive on pricing.

Long view: We hold a favorable view of Ally’s decision to exit its ancillary lending categories, like residential mortgages, to focus on retail auto lending and corporate finance. We expect the more focused and rational strategy for its balance sheet to lead to better long-term profitability and returns.

Michael Miller, Morningstar analyst

Read Morningstar’s full report on Ally Financial.

Amazon.com

• Morningstar Rating: 4 stars
• Morningstar Economic Moat Rating: Wide
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Internet Retail

Berkshire Hathaway doesn’t own a ton of Amazon’s stock; in fact, it’s only been invested in Amazon since the first quarter of 2019. Buffett has admitted in the past that while he always admired Amazon founder Jeff Bezos, he was reluctant to invest in the company early: He couldn’t imagine it would turn into the retail juggernaut that it did. Amazon has carved out its wide economic moat not just on its retail business but also on Amazon Web Services. The stock looks attractive, trading 12% below our $240 fair value estimate.

Morningstar senior analyst Dan Romanoff said this after Amazon’s first-quarter earnings release:

Amazon reported first-quarter results that beat the high end of guidance on both the top and bottom lines. Revenue grew by 10% year over year in constant currency to $155.7 billion, while operating margin was 11.8% versus 10.7% a year ago. Currency hurt sales growth by $1.4 billion.

Why it matters: Results were generally good, with upside broadly on the top and bottom lines, which we think is positive in the face of looming tariffs. We see some prebuying behavior ahead of tariffs, which is worth monitoring if the tariff situation persists beyond the second quarter.

The bottom line: We maintain our fair value estimate of $240 per share as we see good results in conjunction with mixed guidance, and we see shares as attractive.

Coming up: Overall guidance is mixed, with revenue solid and profitability light relative to our model. Satellite launch costs for Project Kuiper will likely pressure margins for a couple quarters, while new AWS capacity coming online later this year will have a similar impact.

Dan Romanoff, Morningstar senior analyst

Read Morningstar’s full report on Amazon.

Constellation Brands

• Morningstar Rating: 5 stars
• Morningstar Economic Moat Rating: Wide
• Morningstar Capital Allocation Rating: Standard
• Industry: Beverages—Brewers

Berkshire Hathaway initiated a position in Constellation Brands during the fourth quarter of 2024. Constellation Brands has carved out a wide moat with its portfolio of top-selling Mexican beer brands that underpin strong brand equity and tight distributor partnerships, explains Morningstar analyst Dan Su. We expect the company’s beer brands to fuel growth, while the turnaround with its wine and spirits will take time. The stock is trading 32% beneath our $274 fair value estimate.

Here’s Su’s take on Constellation Brands after its recent earnings release.

Constellation Brands posted 2% sales growth for fiscal 2025 while adjusted earnings per share rose 11% on efficiency gains in the beer segment. For the next three years, it expects low- to mid-single-digit sales growth, below its prior midterm target of 6%-8%.

Dan Su, Morningstar analyst

Kraft Heinz

• Morningstar Rating: 5 stars
• Morningstar Economic Moat Rating: Narrow
• Morningstar Capital Allocation Rating: Standard
• Industry: Packaged Foods

Berkshire Hathaway owns more than 26% of Kraft Heinz’s stock. The packaged-food manufacturer has revamped its road map and is now focused on consistently driving profitable growth. We think Kraft Heinz stock is worth $53 per share, and shares are trading at a 49% discount to that fair value today.

Here’s what Morningstar director Erin Lash thinks of Kraft Heinz’s first-quarter results:

Kraft Heinz’s first-quarter organic sales slumped 4.7%, reflecting a 5.6% hit from lower volumes and unfavorable mix. Despite this, the adjusted operating margin ticked up 30 basis points to 20%.

Erin Lash, Morningstar director

Occidental Petroleum

• Morningstar Rating: 4 stars
• Morningstar Economic Moat Rating: None
• Morningstar Capital Allocation Rating: Standard
• Industry: Oil & Gas E&P

Berkshire Hathaway owns 27% of Occidental Petroleum’s stock. Although Oxy is one of the world’s largest independent oil and gas producers, we don’t think it has carved out an economic moat—though we believe it’s on the cusp of earning its cost of capital, adds Morningstar director Josh Aguilar. We assign Oxy a $59 fair value estimate, and shares are trading 26% below that.

Here’s Morningstar’s take on Oxy’s business:

Occidental is one of the world’s largest independent oil and gas producers. Its upstream operations are spread across the US, Middle East, and North Africa. It has a consolidated midstream business, which provides gathering, processing, and transport services to the upstream segment, and it holds a majority equity interest in Western Midstream. The portfolio also includes a chemicals business, which produces caustic soda and PVC. The latter segment benefits from low energy and ethylene costs, while its profitability is determined by the strength of the broader economy.

The $55 billion Anadarko deal was a huge undertaking for Oxy, which itself had an enterprise value of about $50 billion at the time. The cash portion was partly financed with a $10 billion preferred equity investment from Berkshire Hathaway along with the proceeds from the sale of Anadarko’s Mozambique assets, which Total purchased for $3.9 billion in late 2019. While these arrangements left Oxy with a heavy debt burden prior to the pandemic, drastic measures helped management steady the ship, and the firm took full advantage of the subsequent rebound in commodity prices, generating enough cash to fully repair the balance sheet and pave the way for significant capital returns. The firm is obligated to match distributions above $4 per share annually with preferred equity redemptions.

The midstream segment also includes Oxy Low Carbon Ventures, which partners with third parties to implement carbon capture, storage, and utilization projects. This activity differentiates Occidental from most peers, which merely focus on curtailing their own emissions. Oxy’s experience sequestering carbon dioxide for enhanced oil recovery potentially enables it to go further. Management has ambitious plans to develop direct air capture facilities that should also generate incremental revenue.

Finally, Oxy closed the roughly $12 billion CrownRock acquisition in 2024, which provides Oxy a high-graded asset portfolio, allowing Oxy to add significant production capacity in the Midland Basin. While this acquisition comes at an elevated capital cost, we think it will help create firmwide operating efficiencies.

Josh Aguilar, Morningstar director

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.