Buffett's favorite stocks draw mixed earnings reviews

American Express and Coca-Cola fared well, but Wells Fargo turned in a tepid report.

By TheStreet Staff Oct 21, 2011 11:20AM

By Don Dion, TheStreet

TheStreet

 

Given the mix of winners and losers we have seen during the opening weeks of earnings season, it has likely been difficult for many stock pickers to navigate the markets without a setback. Even Warren Buffett has seen a blend of strength and weakness from the companies in his legendary portfolio.

 

This week has been important for fans of the Oracle of Omaha. Over the past few days, some of the largest names in the Berkshire Hathaway (BRK.A) portfolio have reported quarterly earnings and provided insight into the closing months of the year.

 

Of particular importance were Coca-Cola (KO), Wells Fargo (WFC) and American Express (AXP), which represent the three largest slices of the portfolio.

 

Buffett's portfolio casts a wide net across the broad market spectrum, offering exposure to financials, industrials, consumer goods, energy and other sectors. From an individual holdings perspective, however, the lineup is notably concentrated. Together, KO, WFC, and AXP represent nearly 60% of the total assets.

 

Related Articles      

Swirling macroeconomic turbulence appears to have had only a limited effect on consumer demand for soft drinks. Over the most recent three-month period, Coca-Cola reported earnings growth of more than 8%. A Wall Street Journal report notes that, excluding charges including restructuring costs, the company was able to outpace analyst estimates.

 

Despite that strength, the company recognized the road ahead is not entirely smooth with continued global economic turmoil and rising commodity costs.

 

Berkshire's No. 3 holding, American Express, also fared favorably over the past three months, beating forecasts.

 

Company executives pointed to consumer resilience as a major source of strength for the credit card giant. In a statement included in the company's earnings press release, CEO Kenneth Chenault noted that cardmember spending jumped 16% to a record level.

 

Looking ahead, the company appears cautiously optimistic. Economic issues remain a cause for concern. However, Chenault mentions that AXP has taken a number of steps that have improved competitiveness.

 

While Coca-Cola and American Express saw notable strength, Wells Fargo left something to be desired.

 

Interestingly, compared with other Wall Street giants, Wells Fargo appeared strong. Following the subpar performances from JPMorgan (JPM) and Goldman Sachs (GS), the company managed to report earnings in line with expectations.

 

Any optimism was offset by market commentators who were quick to point out the effects that looming issues facing banks are having on the company. Of particular concern was Wells' weak revenue numbers.

 

Shares of WFC took a heavy hit as investors steered clear of the California bank after its tepid report.

For popular Buffett stocks, the opening weeks of earnings season have been a mixed bag. In the last full week of October, investors can expect to hear from other Berkshire notables, including ConocoPhillips (COP) and Procter & Gamble (PG). The two are slated to report earnings Wednesday and Thursday.

4Comments
Oct 21, 2011 12:00PM
avatar
SmileHi, I like  Buffett, he buys good blue chip stocks when they are low and holds on to them !
Oct 21, 2011 5:09PM
avatar
Buffet is a cancer.  He needs to take his money & buy a nice rest home some where far away.  This recession is nothing but a monopoly game for him & his lackies! 
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

114
114 rated 1
278
278 rated 2
474
474 rated 3
641
641 rated 4
639
639 rated 5
663
663 rated 6
640
640 rated 7
499
499 rated 8
284
284 rated 9
122
122 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
COPCONOCOPHILLIPS9
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
KOGKODIAK OIL & GAS Corp9
CVXCHEVRON CORPORATION8
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.