Vaccines are coming and that’s good news for public health. But it’s already a financial boon for some in the S&P 500, including Warren Buffett stocks, in the right places.
Investors scored more than $313 billion on just 10 S&P 500 companies, including financials like Buffett’s Berkshire Hathaway (BRKA) and top Berkshire Holding Bank of America (BAC) plus tech Apple (AAPL), in the six trading days since Pfizer (PFE) unveiled its vaccine.
The vaccine rally gained steam as Moderna (MDRA), Monday, announced encouraging vaccine developments, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. All told, just these 10 S&P 500 stocks accounted for nearly a quarter of the $1.3 trillion in market value gains since the vaccine announcement, says Wilshire Associates.
More types of S&P 500 stocks are joining the rally, largely without outsize gains by the massive information technology giants for once. Just one of the 10 biggest market value gains since the vaccine news are from the five megacap Nasdaq 100 stocks: Apple. And Buffett is a huge holder.
“The containment (of the virus with a vaccine) is potentially a catalyst for a more balanced economic recovery, where companies most impacted by the pandemic and the economic recession could finally see a path toward improved business and upticks in earnings,” said Chao Ma, investment strategist at Wells Fargo Investment Institute.
Warren Buffett: In The Right Place At The Right Time
Berkshire Hathaway reasserted its position in the S&P 500 following the vaccine news. The company’s market value has jumped 11% since the Pfizer news. That puts $47.4 billion into investors’ pockets in just about a week — more than any other company in the S&P 500 during that time.
And that’s a big win for Buffett. He still owns nearly 16% of the company. That means his portion alone of the week’s gain is $7.5 billion. Not bad for a week’s work.
Buffett’s Berkshire was a holder of an impressive half of the 10 S&P 500 stocks delivering the largest market value gains since the vaccine news. Much of the gains is due to Berkshire’s exposure to the right financials. The Financial Select Sector SPDR ETF (XLF) is up nearly 11% since the Pfizer vaccine news. That’s second only to the 24.9% gain in the Energy Select Sector SPDR ETF (XLE) during that time.
But not all financials are gaining equally. Bank Of America, the one bank Buffett has focused on and added to this year, is an outsized winner. The financial firm is up more than 13% since the Pfizer news. That added $28.4 billion in market value to the company. Berkshire Hathaway owns roughly 11% of the bank, making it the largest single owner of the bank.
He’s also a holder of Visa (V). The payments processing company’s value jumped 7% since the vaccine. That adds more than $30 million in market value. Admittedly, Berkshire’s position is still small, just 0.6%.
Warren Buffett Stocks: Picking The Right Big Technology Play
Amazingly, just one megacap tech stock, Apple, is among the top 10 market cap gainers from the vaccine. And it’s a massive holding for Buffett, at roughly half his portfolio.
Apple’s value is up more than $27 billion, or 1.4%, from the vaccine. That massive market value gain ranks seventh in the S&P 500. Apple is the only big-cap technology stock with a top 10 market cap gain in S&P 500 from the vaccine. Berkshire owns nearly 6% of Apple.
Meanwhile, most of the other big S&P 500 companies are going the wrong way. Amazon is down 5.4% from the vaccine date, shaving $1.6 billion in market value. Berkshire is a very small holder of Amazon (AMZN) at just 0.05% of the company. And Microsoft (MSFT) is off 2.9%, or $1.6 billion, the largest market value drop of any of the S&P 500 companies. Berkshire owns no Microsoft.
Regrets: Warren Buffett Has A Few
There are some knocks against Buffett, though. Berkshire Hathaway lightened up on many financials just ahead of their big runs.
Berkshire sold some of its holdings in JPMorgan Chase (JPM) during the quarter. And that was a miss as JPMorgan’s value jumped nearly $44 billion, or 14%, since the vaccine. That’s the second largest market value gain in the S&P 500.
Buffett has also missed out on much of the S&P 500 energy run-up. Buffett doesn’t own any Chevron (CVX) or Exxon Mobil (XOM), which are up 25% and 16%, respectively, since the vaccine. Keep in mind, though, energy stocks are still down 40% this year so he’s not missing much.
Nobody can get them all right. And 50% isn’t bad.
Top 10 S&P 500 Market Value Gains Since Vaccine
Gains since Pfizer’s Nov. 9 vaccine announcement
|Company||Ticker||% Gain Post Vaccine*||YTD % Ch.||Mkt. Cap Gain Post Pfizer Vaccine in millions*||Sector||Composite Rating|
|Walt Disney||(DIS)||13.5%||0.0%||$31,099.6||Communication Services||35|
|Bank of America**||(BAC)||13.5%||-21.7%||$28,288.1||Financials||39|
Sources: IBD, S&P Global Market Intelligence, * From Nov. 6 close to Nov. 16, ** – Holding of Berkshire Hathaway as of Nov. 15 (JP Morgan stake reduced in third quarter)
Follow Matt Krantz on Twitter @mattkrantz
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