Warren Buffett Sold $133 Billion Worth of Stocks in 2024: Here Are 2 He's Not Selling

Through the first nine months of 2024, Warren Buffett's Berkshire Hathaway unloaded $133 billion worth of stocks. Buffett reduced Berkshire's massive stake in Apple and sold nearly a quarter of its Bank of America holding.

In the third quarter, Apple, American Express (NYSE: AXP), Bank of America, and Coca-Cola (NYSE: KO) made up 70% of Berkshire's $271 billion stock portfolio. Buffett is raising cash at a time when the S&P 500 is trading at 30 times earnings, which is historically high for this popular market barometer.

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However, it's worth looking at the stocks Buffett is choosing not to sell right now. Buffett continues to hold shares of Coca-Cola and American Express, which says a lot about what he thinks of their competitive advantages and growth prospects.

1. Coca-Cola

Warren Buffett has often invested in top consumer brands over his investing career. When Buffett sees a quality business trading at an attractive valuation, he pounces, and his 1988 investment in Coca-Cola is a great example.

Coca-Cola stock fell sharply in the 1987 Black Monday crash. But the company was growing earnings at double-digit rates, and it still had a tremendous international growth opportunity. In the aftermath of the sell-off, the shares traded at around 16 times earnings, which prompted Buffett to invest a fifth of Berkshire's equity in Coke stock.

Buffett has never sold a single share of Coca-Cola. The stock has split a few times over the last 30 years, leaving Berkshire with 400 million shares at the end of the 2024 third quarter. Those shares are worth $25 billion at current share prices, and paying $776 million in annual dividends.

Coca-Cola is not the high-growth company it was when Berkshire originally invested, but the company should continue to grow earnings as it gains market share. Coca-Cola experienced a slight decline in unit case volume last quarter, reflecting a weak consumer spending environment. But over the long term, management expects to grow revenue marginally faster than the 4% historical growth rate of the global beverage industry.

The stock trades at 21 times 2025 earnings estimates and offers a high dividend yield of 3.14%. Assuming the company grows earnings faster than revenue, it probably won't be enough to outperform the S&P 500 over time. However, Coca-Cola's strong brand and consistent sales performance make it a great stock to hold if you want to boost your passive income.

2. American Express

Berkshire has held a large stake in American Express stock for 30 years, and as of Q3 2024, it still held 151 million shares. After adding to the position in 1998, Buffett has continued to patiently hold the stock and let it compound in value with the growth of the business.

American Express earned $12.5 million in 1964, $1.4 billion in 1994, and $9.9 billion over the past year. That record of profitable growth clearly reflects a wide competitive moat.

American Express stands out in an industry dominated by a few credit card companies. It has built a strong brand on customer service and a card membership model. Net card fees totaled nearly $2.2 billion in Q3, up 18% over the year-ago quarter. This gives American Express recurring revenue that it reinvests in benefits to retain and attract new card members.

Another attractive aspect of the business is that American Express card members spend more on average than customers of other card brands. Despite recent weakness in consumer spending, total transaction volumes, or billed business, grew 6% over the past year.

Even with a single-digit growth rate in billed business, American Express is still on pace to report outstanding earnings growth of 25% for 2024. This reflects strong growth in card fees, low delinquency rates, and steady growth in new card members.

The stock is not cheap. It's trading at 20 times 2025 earnings estimates, which is higher than its 10-year average price-to-earnings multiple of 18. However, analysts expect earnings to grow at an annualized rate of about 14% over the long term, consistent with management's target, which may justify the higher valuation.

While American Express could experience weaker financial results in a recession, Buffett clearly believes that the stock will grow in value over time.

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Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy.