- Berkshire Hathaway’s latest 13-F filing reveals it doubled the size of its stake in the owner of the Modelo and Corona beer brands in the United States, while dumping its $1 billion stake in Citigroup. It also reduced its exposure to Bank of America and Capital One Financial.
Warren Buffett’s Berkshire Hathaway doubled its stake in Constellation Brands, opting to ditch shares in U.S. financials in favor of the wine and spirits company behind popular Mexican beerss Modelo and Corona in the United States.
In its latest 13-F quarterly SEC filing published on Thursday, the investment holding revealed the size of its stock portfolio slid 3% to $258.7 billion over the three months to the end of March, as it exited its $1 billion Citigroup stake entirely.
In addition, it trimmed its holdings in Bank of America and Capital One Finance by 7% and 4%, respectively. By comparison, the amount of stock it held in Constellation Brands rose more than twofold to just over 12 million shares from the 5.6 million it acquired in the fourth quarter.
Berkshire has suddenly developed a taste for the brewing giant at a time when demographic trends suggest a permanent consumer shift away from alcoholic beer as younger generations lose interest.
Beverages laced with THC and CBD, the chemical compounds found in marijuana and hemp, have instead become all the rage of late, especially among Gen Z drinkers.
Buffett known for focusing on undervalued stocks
“Demand for cannabis-infused beverages is certainly growing while demand for alcohol had declined in recent years,” Meenakshi Subbaraman, a program director at the Public Health Institute told Newsweek in February.
Yet the Berkshire Hathaway chair is known for being a countercyclical investor who buys “when there’s blood in the street”.
One beverages industry analyst summed up his approach in February: “Warren Buffett is looking at the value of the business in the long term and believes the stock is undervalued.”
Constellation Brand’s Modelo has been able to tap into its exposure to the growing Hispanic population, becoming the most popular beer brand in the United States after the fallout from Bud Light’s brief yet disastrous collaboration with trans influencer Dylan Mulvaney in 2023.
Neither Berkshire Hathaway nor Constellation Brands responded to an out-of-hours request by Fortune for comment. Citigroup declined to provide a statement.
Berkshire Hathaway ploughing cash into short-dated Treasury debt
The native Nebraskan is dubbed the “Oracle of Omaha” for his foresight when buying into undervalued stocks. One of his most famous investment mottos is be fearful when others are greedy and greedy when others are fearful.
Lately, however, Buffett his single biggest investment arguably is in Treasury bills. Considered bulletproof, this asset class is as safe as cash but offers a healthy return thanks to today’s high interest rate environment.
According to JPMorgan estimates earlier this month, Berkshire has stashed $314 billion into short-dated U.S. sovereign debt, roughly equivalent to 5% of overall bill supply and more than the Federal Reserve itself holds on its books.
Buffett, whose long-time partner Charlie Munger passed away in November while still serving as vice-chair of the company, shocked the market when the 94-year old legend said he could no longer keep up with younger successor Greg Abel and would step down in a matter of months.
“The difference became more and more dramatic,” Buffett told the Wall Street Journal this week. “He just was so much more effective at getting things done.”
