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Berkshire Hathaway: Payment Industry in Q1

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Payment services companies

Berkshire Hathaway (BRK-B) has invested in several payment industry stocks like Visa (V), Mastercard (MA), American Express (AXP), and StoneCo (STNE). Apple (AAPL) was Berkshire Hathaway’s biggest holding at the end of the fourth quarter. Last week, Apple announced a credit card in association with Goldman Sachs (GS). Goldman Sachs also forms part of Berkshire Hathaway’s portfolio.

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Price action

Payment industry stocks managed to beat the markets in the first quarter. StoneCo saw an upwards price action of 122%, which is the highest among Berkshire Hathaway’s major holdings. The company released its earnings last month and crushed analysts’ estimates. Some of the other companies in Berkshire Hathaway’s portfolio posted soft earnings in the fourth quarter. While Coca-Cola (KO) gave dismal guidance, Kraft Heinz (KHC) announced a massive asset writedown and revealed a subpoena, which led to a selling spree in the stock.

StoneCo

Coming back to payment companies, while StoneCo’s performance stood out, other stocks also posted strong returns. American Express, Visa, and Mastercard saw upwards price action of 15.1%, 18.6%, and 25.0%, respectively, in the first quarter. While these stocks saw good returns in the first quarter, Berkshire Hathaway’s position isn’t substantial in Visa, Mastercard, and StoneCo. However, Berkshire Hathaway has significant exposure to American Express. Berkshire Hathaway is the company’s biggest shareholder.

Berkshire Hathaway has also invested in Paytm—an Indian startup that’s into payment services and e-commerce. In Paytm’s e-commerce business, the company competes with Amazon (AMZN) and Walmart-owned (WMT) Flipkart.

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