Buffett buys shares in Constellation, Pool, and Domino's

Warren Buffett's company, Berkshire Hathaway, made notable stock purchases in the fourth quarter, buying shares in Constellation Brands, Pool Corp, and Domino's Pizza. Despite recent market drops, Buffett's long-term focus remains strong. Constellation Brands is known for its popular beer brands like Corona and Modelo. The company faced challenges recently, missing earnings estimates and dealing with weak consumer spending. However, its stock is now seen as a value opportunity, trading at a price-to-earnings ratio of 13, with a dividend yield of 2.3%. While growth in the alcohol market is slow, steady sales growth is expected if overall market conditions improve. Pool Corp specializes in pool products for both residential and commercial use. Buffett's investment surprised some, but it aligns with his strategy of investing in strong companies. The stock's performance has declined due to a slowdown in real estate, affecting pool construction. Despite a drop in sales and operating income, management expects stability in 2025. The stock trades at a forward price-to-earnings ratio of 26, which is considered fair for its business model. Domino's Pizza has also caught Buffett's eye, with a significant increase in its shareholding. The pizza chain has shown exceptional growth over the past 15 years, with a stock return of 5,300%. In 2024, Domino's raised retail sales by 6% despite industry challenges, thanks to its effective franchise model. The company boasts a high return on capital, indicating strong growth potential. Current earnings expectations give the stock a price-to-earnings ratio of 26, reflecting its promise for future profitability.