Berkshire Hathaway's 'Secret $5 Billion Investment' Speculated to be Caterpillar

Charlie Garcia speculates in a MarketWatch article that Warren Buffett's Berkshire Hathaway may disclose a $5 billion investment in Caterpillar, Deere, UPS, or Honeywell International in its 13-F filing. Garcia gives Caterpillar a 70% chance, Deere a 10% chance, UPS a 10% chance, and Honeywell a 10% chance.

Charlie Garcia speculates in a MarketWatch article that Warren Buffett's Berkshire Hathaway may disclose a $5 billion investment in Caterpillar, Deere, UPS, or Honeywell International in its upcoming 13-F filing. Garcia gives Caterpillar a 70% chance, Deere a 10% chance, UPS a 10% chance, and Honeywell a 10% chance [1].

Berkshire Hathaway's latest 13-F filing, due after Thursday's closing bell, is expected to reveal a new mystery stock position. The company has been building a multi-billion-dollar stake in a confidential stock, which has been kept secret to avoid triggering copycat trades [2]. This investment is likely to be in the Commercial, industrial, or other sector, as indicated by the growth in the cost basis of the third category in the company's first and second-quarter filings [3].

Warren Buffett's Berkshire Hathaway has a history of investing in companies with durable profitability, proven capital allocation, and shareholder-friendly policies. Caterpillar stands out with a 16.4x P/E, robust 55.4% ROE, and a 5.5% free cash flow yield, making it the closest fit to Berkshire's investment style among the listed candidates [2]. Deere & Company, another candidate, has a cheaper P/E (13.5x) and a fantastic 31.8% ROE, but faces revenue contraction, which could give Buffett pause for now [2].

Garcia's speculation is based on Berkshire's historical investment patterns and the company's current portfolio composition. The potential investment in these companies aligns with Berkshire's focus on stable and profitable businesses. Investors should keep an eye on Berkshire's 13-F filing for further insights into the company's investment strategy and potential future earnings.

References:
[1] https://www.marketwatch.com/story/buffett-secret-stock-warrenai-thinks-173042823.html
[2] https://finance.yahoo.com/news/buffett-secret-stock-warrenai-thinks-173042823.html
[3] https://www.financialexpress.com/business/investing-abroad-warren-buffett-mystery-stock-purchase-speculation-heats-up-mystery-to-be-revealed-in-berkshires-13-f-filing-today-3946182/