Berkshire Hathaway’s Q4 2024 Portfolio Analysis: SiriusXM, Constellation Brands, and Key Changes

1. Background of the Large Investment in SiriusXM

• Acquisition Situation: Berkshire Hathaway aggressively purchased Sirius XM Holdings Inc. shares starting in Q3 2024, currently holding a 35% stake and becoming the largest shareholder. This significantly surpasses Vanguard (6.6%), the previous second-largest shareholder.
• Sirius Stock Trend: The stock price fell approximately 18% from the mid-$30s in the latter half of 2024 to the mid-$20s in early 2025. However, Berkshire continued buying, possibly indicating a belief that the stock was undervalued.
• Presumed Decision Maker: Ted Weschler appears to be the driving force behind this investment. He has a long-standing relationship with Liberty Media and is known for his skill in identifying undervalued companies.

2. Sirius Investment Strategy and Growth Challenges

• Expansion into the Podcast Market:
  • A 3-year exclusive contract was signed with Alex Cooper, a popular podcast star among the MZ generation.
  • Attempts to strengthen the subscriber base through the popular program “Call Her Daddy” and its related network.
• Similar Historical Case: The company experienced great success with its 2006 contract with Howard Stern.
• Competitive Landscape: Spotify (20%) and YouTube (15%) are expanding their market share in the digital media space. Spotify, in particular, is significantly outpacing competitors in terms of paid subscriber growth, intensifying competition.
• Short-Term Goal: Considering the undervalued valuation (PER 8.5x, PBR 0.74), a “cigar butt investment” strategy aiming for short-term gains is possible.

3. New Acquisition of Constellation Brands

• Acquisition Background: A major US beverage company producing beer, wine, and spirits. It owns a strong brand portfolio, including Corona beer and Robert Mondavi wines.
• Purchase Details: 5.62 million shares were purchased, representing an investment of approximately $1.243 billion.
• Investment Intent: Diversification into the consumer staples sector, known for its defensive characteristics. Targeting the relatively defensive alcoholic beverage market during economic downturns.

4. Complete Sale of Major ETFs like SPY and VOO

• Reasons for ETF Sale:
  • Berkshire Hathaway completely sold its holdings of SPY and VOO, S&P 500 index tracking ETFs. This can be interpreted as Warren Buffett’s judgment that the US market remains overvalued.
  • Ulta Beauty was briefly included in the portfolio in Q3 and then completely sold. This could be due to a change in investment strategy or the company not performing as expected.

5. Bank of America vs. Occidental Petroleum

• Bank of America (Decrease): Continuous reduction of its stake. 117.4 million shares were sold in Q4.
• Occidental Petroleum (Increase): Adoption of a bottom-fishing strategy. An additional 8.9 million shares were purchased from late December 2024, with further stake expansion in early 2025.

Summary: The Core of Berkshire’s Portfolio This Time

1. SiriusXM: Targeting undervalued assessment and innovation strategies in the digital media sector.
2. Constellation Brands: Strengthening defensive investments with a strong consumer goods portfolio.
3. Complete Sale of ETFs: Judgment that US indices are overvalued.
4. Occidental Petroleum: Utilizing bottom-fishing opportunities in the commodities sector.

Insights into Investment Trends

• Berkshire is adjusting its portfolio balance between traditional industries and digital media. The challenges in the digital sector and the defensive positioning in the traditional consumer goods sector reflect optimal adaptation to the current global economic environment.

Tip: While this information can be used as a reference for investment decisions, independent judgment is crucial. It is important to remember Warren Buffett’s philosophy of identifying growth potential and undervalued factors when developing investment strategies.

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