2 Financial Stocks Warren Buffett Loves
It's no secret that Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) chairman and CEO Warren Buffett likes financial sector stocks. Of his 49 current holdings, roughly one-third are in the financial sector. Within the financial sector, Buffett favors banks, which represent roughly 15% of the overall portfolio.
Banks typically perform well in a rising interest rate environment because they earn a large portion of their revenue from interest on loans. But this is not a typical market, as rates are rising to fend off runaway inflation and the economy has slowed. This reflects the underperformance of many bank stocks relative to the S&P 500. But two Buffett bank stocks are positioned to outperform in this cycle.
US Bancorp (NYSE: USB), the holding company for US Bank, is the fifth-largest bank in the country with about $577 billion in assets. It is also the ninth-largest holding in Buffett's portfolio, as his 126 million shares make up about 2.15% of the overall portfolio. The stock price is down 17% year to date as of June 22, which beats the S&P 500 and is better than any of the eight largest U.S. banks.
Source Fool.com