Warren Buffett isn't as diversified as you might think. Sure, his Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) portfolio includes over 50 stocks. However, one of those stocks (which happens to be named after a certain red fruit) comprises nearly 48% of Berkshire's total holdings.
But that's not the only example of the legendary investor's lower level of diversification. There are seven stocks in Buffett's portfolio that have close ties to each other via another stock that he doesn't own.
Seven related stocks in Buffett's portfolio
Berkshire owns three sets of "twins." First, there's Liberty Latin America Series A (NASDAQ:LILA) and Liberty Latin America Series C (NASDAQ:LILA-K). The two stocks represent different share classes of the same underlying business -- Liberty Latin America.
Liberty Latin America is a top telecommunications company that serves markets in Latin America, the Caribbean, and Puerto Rico. It has 8 million mobile subscribers and also offers internet, landline, and video services.
The second set of "twins" in Buffett's portfolio consists of Liberty Live Series A (NASDAQ:LLYV-A) and Liberty Live Series C (NASDAQ:LLYV-K). The underlying business behind these stocks is Live Nation Entertainment, which operates Ticketmaster, Live Nation Concerts, and Live Nation Media & Sponsorship.
Liberty SiriusXM Series A (NASDAQ:LSXMA) and Liberty SiriusXM Series C (NASDAQ:LSXMK) make up the third pair of "twins." The underlying business for the two stocks is satellite radio broadcaster SiriusXM.
The seventh of these related stocks is Liberty Formula One Series C (NASDAQ:FWON-K). The underlying business in this case is motor racing leader Formula One Group.
The common link: Liberty Global
Liberty Global (NASDAQ:LBTYA) (NASDAQ:LBTYK) is the common link between all seven of the aforementioned stocks. Buffett doesn't currently own Liberty Global, but he has in the past.
In 2018, Liberty Global spun off Liberty Latin America as a separate entity. The two companies now have no formal connection.
Liberty Global is, however, joined at the hip with the other five "Liberty" stocks in Buffett's portfolio. All of them are tracking stocks that track the performance of Liberty Global's subsidiaries or investments in other businesses.
Interestingly, Liberty Global was once a tracking stock itself. Following the merger of Tele-Communications, Inc. and AT&T in 1999, Liberty Media became a tracking stock of AT&T its class A and class C shares trading under different tickers than it has now.
Is Liberty Global stock a buy?
Anyone who wants to buy five Buffett stocks in one fell swoop could do so by investing in Liberty Global. But would that be a good move right now?
Some Wall Street analysts are bullish about the stock. Of the 19 analysts surveyed by Refinitiv in October, four rated Liberty Global as a "strong buy." Another eight analysts recommend buying the stock.
However, I don't like Liberty Global right now. For one thing, the company isn't profitable. Liberty Global posted a net loss of more than $511 million in the second quarter of 2023. And its bottom line is trending in the wrong direction.
Liberty Global also has a huge debt load of $15.3 billion. That amount is more than twice the size of the company's market cap.
I suspect that Buffett would agree with my take on Liberty Global. However, he appears to be a big fan of several of Liberty Global's related stocks. For example, Berkshire's stakes in Liberty SiriusXM Series A and Series C currently stand at 20.6% and 19.8%, respectively.
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Keith Speights has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Live Nation Entertainment. The Motley Fool has a disclosure policy.
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