On Wall Street, few money managers command the attention of professional and everyday investors quite like Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett. Since becoming Berkshire's chief in the mid-1960s, the Oracle of Omaha has practically doubled up the broad-based S&P 500 on the basis of total annual return, including dividends.
Buffett's phenomenal investment track record has some investors mirroring his trades. This can be done by closely monitoring Berkshire's Form 13F and Form 4 filings with the Securities and Exchange Commission (SEC).
Form 13Fs provide investors with a concise snapshot of what Wall Street's wisest money managers purchased and sold in the latest quarter. They're a required filing for institutional investors with at least $100 million in assets under management -- and Buffett is overseeing a 43-stock, $317 billion portfolio.
Meanwhile, Berkshire Hathaway is also required to file Form 4 with the SEC when purchases or sales are executed in a security that it owns at least a 10% stake in.
Although Berkshire's Form 13Fs and Form 4s don't tell the full story about Warren Buffett's favorite stock to buy, they have spilled the beans on a unique stock-split stock that the Oracle of Omaha can't stop buying.
Despite Buffett's company holding massive stakes in Apple, American Express, and Bank of America, the amount of Berkshire's capital spent buying shares of these three juggernauts, on a combined basis, pales in comparison to the amount of money the Oracle of Omaha has put to work in his favorite stock since July 2018.
The interesting thing about Buffett's favorite stock is that you're not going to find any evidence of purchase activity for it in Berkshire Hathaway's 13Fs. Instead, you'll find a detailed monthly buying breakdown of this top stock in his company's quarterly operating results... because his favorite stock to buy is shares of Berkshire Hathaway.
Prior to July 2018, Buffett and his right-hand man Charlie Munger, who passed away last November, had their hands tied when it came to buybacks. In order to repurchase Berkshire's stock, shares of the company had to trade at or below 120% of book value, which is a line-in-the-sand threshold that was never reached.
On July 17, 2018, Berkshire Hathaway's board of directors reworked these buyback covenants to give Buffett more liberty to undertake share repurchases, as he saw fit. These new criteria allowed for unlimited buybacks with no end date as long as: