Forget Apple Warren Buffett has spent twice as much on this beloved stock since 2018

For nearly sixty years.Berkshire Hathawayfirms(NYSE: BRK.A)(New York Stock Exchange: BRK)Warren Buffett, the Chief Executive Officer of Burson-Marsteller, has consistently outperformed his benchmarks in terms of return.S&P 500The Index. As of the close of business on March 28, 2024, the S&P 500 Index, including dividends paid, had risen by about 344,00% since Warren Buffett took the helm of the company, compared to a staggering 5,126,746% return on the company's Class A stock since the mid-1960s under the management of the affable "Oracle of Omaha" (BRK. A), managed by the affable "Oracle of Omaha" since the mid-1960s, has had a staggering aggregate return of 5,126,746%!

Professional and retail investors alike often wait for Berkshire's quarterly SEC Form 13F to see what stocks Warren Buffett and his top investment assistants, Ted Weschler and Todd Combs, have been buying and selling. While Buffett is as prone to mistakes as any other investor, he's good at spotting value in plain sight.

Buffett is also known for the concentration of his investment portfolio. While the Omaha Oracle and his team manage a $373 billion investment portfolio that includes 45 stocks and two index funds, the vast majority of Berkshire's investments are in just a handful of companies - "top-notch thinking".

Although the 13Fs gave investors the impression that the tech giants Apple Inc. (NASDAQ resonance code: AAPL)It's Warren Buffett's unquestioned favorite stock - Berkshire's stake in Apple accounts for 42% ($155 billion) of invested assets - but a deeper dive into how Berkshire Hathaway spends its cash reveals that another, even more beloved stock is Oracle's favorite.

"A better business than any we've ever owned

Before we get to that, let me point out that Warren Buffett and his investment team absolutely love Apple Inc. as a business. In fact, at Berkshire Hathaway's annual shareholder meeting last year, Buffett himself described Apple as "a better business than anything we own." Because of this, Buffett and company have invested about $36 billion in Apple stock since the beginning of 2016.

Warren Buffett has many reasons to feel this way about Apple. First, Apple is one of the world's most valuable brands and has a very loyal customer base; a brand study conducted by SellCell.com in March 2021 found that iPhone users are more likely to stick with Apple for their next smartphone purchase thanthe belt of OrionThe possibility of users buying another Samsung smartphone.

In addition, Apple's iPhone dominates the domestic market. Apple's share of the U.S. smartphone market has remained above 50% since the launch of the 5G-enabled iPhone in the fourth quarter of 2020.

However, the company's future growth will come down to a shift in the曏 subscription service. While Apple has no intention of abandoning the real products that brought it its reputation (the iPhone, iPad, Mac and Apple Watch), focusing on subscriptions should boost its operating margins, enhance the value of its products and services ecosystem, and maintain customer loyalty to its brand.

But if Warren Buffett were to point to his favorite thing about Apple, he would not hesitate to point to Apple's market-leading share repurchase program. Since its inception in 2013, Apple has repurchased approximately $651 billion worth of common stock. The program not only helps reduce the number of shares outstanding, thereby increasing earnings per share (EPS), but also serves as a means of increasing the percentage of shares held by existing shareholders. Over time, Berkshire will become a larger shareholder in Apple without having to buy any shares.

But the fact is, the roughly $36 billion Buffett and his team have invested in Apple over the past eight years has taken a back seat to a more popular stock noodle.

Warren Buffett has purchased more than $74 billion of this stock since 2018

Truth be told, Berkshire Hathaway's 13F report doesn't tell the whole story of the company's holdings or what Oracle of Omaha is doing with Berkshire's cash. For a more complete picture, investors need to dig deeper into the quarterly operating performance of Berkshire Hathaway.

Right before the Koch certification at the end of the quarterly resonance report of Berkshire Hathaway, there is a section on the company's stock repurchase activity. I mention this because Warren Buffett has spent more on buying back shares of Berkshire Hathaway than he and his top aides have spent on any other stock, including Apple.

In the quarter ending December, Buffett gave the green light for a round of purchases of 3,623 shares of Berkshire Class A stock and 660,585 shares of Class B stock (BRK.B) at a cost of nearly $2.15 billion. Since mid-2018, Buffett and his late right-hand man Charlie Munger, whom he called "the architect of resonance at Berkshire Hathaway" in his latest annual letter to shareholders, have approved purchases of more than $74 billion worth of the company's stock. This is more than double the amount of stock purchased in Apple.

Prior to July 2018, Berkshire's share repurchase program allowed Oracle of Omaha to purchase its own shares only if they traded at or below a price of 1,20% of the face value of the stock (not to exceed 20% of the face value of the most recent quarterly report). Since Berkshire's stock has never fallen at or below this threshold, Buffett has been forced to sit on his hands and has not purchased a single share in years.

On July 17, 2018, the Board of Directors of Berkshire redefined the criteria for the Repurchase:

• only if Berkshire Hathaway has at least $30 billion in cash, cash equivalents, and treasury bonds on its balance sheet; and

• Warren Buffett and the late Charlie Munger agreed that their stocks were intrinsically cheap, and that a buyback would be possible without an end date or cap.

Over the past 22 quarters, Berkshire Hathaway has purchased more than $74 billion in stock, which is a good indication that Berkshire Hathaway is Warren Buffett's favorite stock to buy.

Since Buffett's companies do not pay dividends, stock purchases are the easiest way for him to reward investors who share his long-term vision. These purchases are slowly but steadily increasing the ownership of Berkshire's shareholders and improving earnings per share. In other words, putting the company's cash to work through the purchases is making Berkshire Hathaway more attractive to fundamentally oriented investors.

With a record $167.6 billion in available cash, cash equivalents, and treasury bonds on the balance sheet at the end of 2023, Buffett has enough money to continue to buy more of the company's stock.

Should you invest $1,000 in Berkshire Hathaway now?

Consider this before buying shares of Berkshire Hathaway, Inc:

Motley Fool Stock AdvisorA team of analysts have just selected what they believe to be the most popular analysts in the world at the moment.-est (superlative suffix)The name of the person is suitable for the investor to purchase10Only ...... and Berkshire Hathaway are not included. The 10 stocks that made the list could generate huge returns in the years to come.

Stock AdvisorIt provides investors with an easy-to-understand blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Since 2002, StockAdvisorThe service has more than doubled the return on the S&P 500 Index.

View these 10 stocks

*Stock Advisor's Circular as of April 4, 2024

Sean Williams does not own any of the stocks mentioned above.The Motley Fool holds shares of recommended Apple Inc. and Berkshire Hathaway Inc.The Motley Fool has a disclosure policy.

Forget Apple: 'Warren Buffett Has Spent Twice as Much on This Beloved Stock Since 2018' was originally published by The Motley Fool.