Besides its wholly owned operating businesses, Berkshire Hathaway is known for its huge $327 billion public equities portfolio. The conglomerate owns many individual stocks, but one stands out for its massive financial impact in recent times.
If you had invested $10,000 in this top Warren Buffett stock 10 years ago, here’s how much you’d have today.
Image source: The Motley Fool.
Even after sizable share sales, Berkshire has a 1.6% stake in Apple (AAPL 1.25%) valued at $71 billion right now. In the past 10 years, this “Magnificent Seven” stock has generated a total return of 1,300% (as of June 4), turning $10,000 into $139,630 today.
Having purchased its first Apple shares in the first quarter of 2016, Berkshire has captured a phenomenal gain on this investment. Buffett believes Apple is a wonderful company, which isn’t a surprising conclusion given its history of product and service innovation, pricing power, and tremendous profits.
Today’s Change
Current Price
Exactly a decade ago, Apple looked like a value stock, trading at a price-to-earnings ratio of 10.9. That multiple has expanded by 246% since then to 37.7, driven by robust financial performance that led to a major improvement in market sentiment.
Prospective investors have no margin of safety. The valuation implies lofty expectations for a company that won’t report the same growth it did in the past.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
