Berkshire Hathaway (NYSE: BRKa)’s subsidiary, New England Asset Management (NEAM), has recently increased its investments in Coca-Cola (NYSE: KO), U.S. Bancorp, and Johnson & Johnson (NYSE: JNJ), despite various industry challenges. The secret portfolio is part of the assets acquired from General Re in 1998.
Amid concerns that weight-loss drugs like Novo Nordisk (NYSE: NVO)’s GLP-1 receptor agonists could reduce demand for soft drinks, NEAM boosted its Coca-Cola stake by 80%. The decision was based on the company’s global reach and brand value, indicating confidence in the enduring appeal of the beverage giant.
In the face of threats of a U.S. recession and potentially higher lending rates escalating credit delinquencies and loan losses, U.S. Bancorp saw an 11% increase in share purchases by NEAM. The bank stands to benefit from extended periods of economic expansion and increased interest income from higher lending rates, providing a buffer against potential economic downturns.
Despite ongoing litigation related to its talcum-based baby powder, Johnson & Johnson remains a secure investment for NEAM. The firm increased its stake in J&J by almost 18%, buoyed by the company’s robust balance sheet, AAA credit rating from Standard & Poor’s, and push toward pharmaceuticals.
The recent moves by NEAM underscore Berkshire Hathaway’s investment strategy of backing companies with strong fundamentals and enduring market presence. This approach allows them to weather industry-specific challenges and macroeconomic uncertainties while providing potential long-term returns.
