Warren Buffett -- the Oracle of Omaha -- is one of the world's
most renowned investors, heralded for his simple yet effective
valuation methods. As such, followers of the legendary investor pay
close attention when Buffett places big bets, and they hope that by
following his stock picks, they will cash in on Buffett's guru-like
In the commodity space, however, Buffett has been quite vocal about
his aversion to certain commodities --
. However, Buffett does have meaningful exposure to commodity
producers that are involved in a wide array of industries,
including oil and gas, solar power, and agriculture. And according
(NYSE:BRK.B) most recent
, Buffet holds stakes in five commodity producer stocks.
For those looking to follow the legendary investor's picks, our
firm highlights Berkshire's five commodity stock holdings.
Berkshire Hathaway currently owns over 27 million shares in this
Texas-based, independent downstream energy company, which amounts
to a holding value of over $1.58 billion. Phillips 66 is a recent
spin-out from energy giant ConocoPhillips, and now houses the
refining, marketing, midstream, and chemicals businesses that used
to be part of the parent company.
As of February 2013, Phillips owns roughly 15,000 miles of pipeline
systems and 10,000 owned or supplied branded marketing outlets
across the US, Europe, and Asia. In its midstream business,
Phillips transports, fractionates, and markets natural gas liquids
in the United States. From a technical perspective, the company's
stock also features a relatively attractive dividend yield of 2.15%
based on the stock's most recent closing price and its annual
payout of $1.25.
Berkshire also owns more than 24 million shares in Phillip 66′s
parent company, ConocoPhillips. ConocoPhillips is an international
integrated energy company that focuses on crude oil, natural gas,
natural gas liquids, liquefied natural gas and bitumen.
The company operates throughout North America, Europe, Asia, and
Australia, and currently has operations and activities in 30
countries. In 2012, the ConocoPhillips produced 1,578 thousand
barrels of oil equivalent per day and had proved reserves of 8.6
billion barrels of oil. Its stock also feature an attractive yield
of 3.92%, based on the company's annual payout of $2.76.
Suncor Energy Inc.
Another independent oil and gas company, Suncor Energy is heavily
involved with the Athabasca oil sands, a deposit that holds 1.7
trillion barrels of bitumen. In addition to exploring and
developing Canada's Athabasca basin, the company also markets,
refines, and transports oil and natural gas throughout Canada and
Berkshire Hathaway currently holds more than 17 million shares of
the Calgary-based company -- a holding value of more than $638
million, or a 1.18% stake in the company.
Deere & Co.
Given Buffett's admiration of all things agriculture, this pick is
perhaps not surprising. Deere & Co. is a leading manufacturer
of agricultural and turf equipment, as well as related service
parts. DE makes everything from tractors and ATVs, to combine
harvesters and balers.
The company also has a long track record of delivering value to
shareholders in the form of dividends and share buybacks; currently
the stock yields 2.41% based on its annual payout of $2.04.
Berkshire Hathaway holds a little under 4 million shares of this
stock, which amounts to a holding value of over $336 million.
National Oilwell Varco, Inc.
Capturing roughly 60% of the market share in its industry, National
Oilwell Varco is one of the leading names in the oil and gas
equipment and services space. The company was founded in 1862 and
is headquartered in Houston, Texas. Its operations are segmented
into three main categories: rig technology, petroleum services, and
distribution and transportation.
Some of the company's most successful products include offshore and
onshore drilling rigs, oilfield tubular goods, drill string
equipment, as well as extensive lifting and handling equipment. One
of the most attractive features of NOV is, however, the company's
business model, which allows it to generate profits no matter what
condition the oil and gas drilling industry is currently in. Given
its proven track record, Berkshire recently upped its stake in the
company to over 8.8 million shares, a roughly 2.08% stake in the
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Editor's note: This article by Daniela Pylypczak was originally