Is Chubb Limited (CB) Warren Buffett’s Top Stock Pick?
In our latest roundup, we dive into the 10 Best Stocks to Buy According to Billionaire Warren Buffett. This analysis will specifically focus on Chubb Limited (NYSE:CB) and how it compares to Buffett’s favored stocks.
Renowned for his wealth, investment acumen, and philanthropic efforts, Warren Buffett leads Berkshire Hathaway, which has evolved from a struggling textile mill in the 1960s to a multi-industry titan. Today, Berkshire oversees ventures ranging from Geico insurance to BNSF Railway, managing an equity portfolio valued at over $267 billion and a staggering cash reserve of $334.20 billion as of year-end 2024.
Given Buffett’s long track record of impressive returns, it’s no surprise that countless investors seek to replicate his successes by tracking his current purchases.
READ ALSO: Warren Buffett’s Portfolio: 15 Longest Held Stocks and 10 Stocks Warren Buffett and Insiders Are Crazy About.
Often referred to as the Oracle of Omaha, Buffett emphasizes investing in companies with robust economic moats and undervalued assets. His investment strategy is largely rooted in long-term value investing—favoring businesses he knows well over sheer diversification. While many novice investors lean on diversification to mitigate risks, Buffett has argued that it can dilute expertise.
Despite a robust market performance in 2024, Buffett has adopted a more cautious investment stance, selling off significant stakes in overvalued companies amidst rising interest rates and economic hesitations.
Notably, Buffett has voiced concerns regarding President Donald Trump’s tariffs on imports, which caused disruptions in the global stock landscape. Nevertheless, Berkshire Hathaway’s Class B shares only dipped slightly on April 3, outperforming the broader market during the same period.
In the fourth quarter, Buffett’s 13F portfolio comprised 38 securities valued at approximately $267 billion, slightly increasing from the previous quarter. Remarkably, his top ten holdings represent almost 90% of this portfolio, illustrating his concentrated investment philosophy.
To compile our list of Warren Buffett’s top investments, we meticulously reviewed Berkshire Hathaway’s fourth-quarter 2024 disclosures, ranking holdings by stake value. Where overlaps occurred, we highlighted the larger investments. We also analyzed hedge fund sentiment towards each stock using Insider Monkey’s extensive database of investor correspondence.
Why do we emphasize the stocks heavily favored by hedge funds? Research indicates that mirroring the selections of top-performing hedge fund managers can outstrip market performance. Our quarterly strategy has returned a remarkable 373% since May 2014, surpassing its benchmark by an astonishing 218 percentage points—make sure to check this out in our upcoming newsletter.
Let’s explore the overlap between our curated list of the 10 longest-held stocks by Warren Buffett and his current top holdings.
Is Chubb Limited (CB) the Best Stock to Buy According to Billionaire Warren Buffett?
Portion of portfolio: 2.79%
Value of holdings: $7,469,434,519
Chubb Limited (NYSE:CB) stands as a global leader in insurance, operating in 54 countries and territories and providing a broad array of property and casualty insurance solutions. Incorporated in Switzerland and listed in the U.S., Chubb has maintained a significant presence in international markets.
During the fourth quarter, Buffett held onto his 27,033,784 shares of Chubb, reflecting his confidence in the company’s growth trajectory. Analysts at JMP Securities have echoed this sentiment, asserting a “Market Outperform” rating with a price target of $325, crediting Chubb’s expansion in emerging markets as a key growth driver.
Chubb reported a net income of $2.58 billion for the fourth quarter, translating to $6.33 per share, alongside a robust core operating income of $2.45 billion. This growth was fueled by a 6.7% increase in Global P&C net premiums and a hefty 13.7% rise in net investment income, primarily from specialized underwriting practices.
In its recent earnings report, Chubb cited a combined ratio of 95.7% despite incurring significant catastrophe losses from California wildfires, showcasing its resilience. Furthermore, the firm announced plans to acquire Liberty Mutual’s property and casualty operations in Thailand and Vietnam, further solidifying its position in Asia.
As of April 24, Chubb’s stock traded at $282.44 with a market cap of $113.187 billion, reflecting a modest year-to-date increase of 2.22%. Ranking 9th in our list of Buffett’s top stocks, we believe that while Chubb possesses strong investment potential, certain AI stocks may offer the opportunity for superior returns in shorter time frames. For those interested, check out our detailed report on an affordable AI stock that’s gaining momentum.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article was originally published by Insider Monkey.
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