Down 14%, is it time to buy Warren Buffett’s best stocks before 2025?

Given his impressive track record of doubling capital as a CEO of a company Berkshire HathawayWarren Buffett is an investing legend. It stands to reason that professional and amateur investors follow his portfolio closely to find potential new ideas to allocate their money.

Among the dozens of companies owned by Buffett, this is the top one Beverage stock Which has fallen in recent months and is now trading 14% off its all-time high in September. Does this mean it’s time to buy this business before 2025?

Berkshire Hathaway and Warren Buffett own a stake in… coca cola (NYSE: KO) For almost four decades. Today it represents 8.4% of the group’s public equity portfolio. It doesn’t take much to understand some of the notable characteristics that make the soft drink giant a high-quality enterprise.

Coca-Cola has a lasting competitive advantage with its products Brand name. With a presence in more than 200 countries and territories around the world and a 40% market share of the non-alcoholic beverage industry, the company is highly regarded by consumers who have come to trust the consistency that Coca-Cola delivers.

One important characteristic that Buffett takes into consideration is whether the company has the ability to continually raise prices, otherwise known as… Pricing power. Coca-Cola fits the description. In the most recent quarter (Q3 2024 ending September 27), unit volume declined 1% year over year but was offset by a 10% price increase. Management has the ability to fight inflationary pressures by asking customers to pay more over time. Not many companies are that lucky.

In addition, Coca-Cola is very profitable. In the past decade, its operating margin has averaged 26.8%, which shows how much of its sales base flows into its bottom line.

All of these positive traits are likely the main reasons Berkshire has become a long-time shareholder of Coca-Cola. I would also argue that the fact that this is a boring business also contributes to Buffett’s positive view. There’s almost no risk that the company will go under any time soon – if ever.

In other words, there is no risk of obsolescence, which can be viewed positively in today’s rapidly changing, technology-driven economy. This also adds a high level of predictability to Coca-Cola’s business model, making the leadership team’s job much easier in making strategic decisions.

Coca-Cola may dominate the beverage industry around the world, but that doesn’t mean it was a profitable investment. In the past five and 10-year periods, stocks have delivered total returns of 33% and 105%, respectively. These numbers lag seriously behind more broadly Standard & Poor’s 500performance during these two periods of time.

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