Key Points

In early 2025, Warren Buffett's Berkshire Hathaway exited its positions in Citigroup and Nu Holdings. Berkshire didn't launch any new positions in the quarter. However, the large conglomerate upped its stake significantly in one company that has served shareholders well since going public in 1995. 10 stocks we like better than Pool ›

One of the most anticipated events of each quarter is the unveiling of Berkshire Hathaway's 13F filing with the Securities and Exchange Commission (SEC). The document details the holdings in Berkshire's massive equities portfolio at the end of each quarter, effectively telling the market what stocks Warren Buffett and his team bought and sold over a three-month period.

With Buffett set to step down at the end of the year, this frequent glimpse into one of the brightest investing minds the world may ever see is now coming to an end. In the first quarter of 2025, Buffett sold his stake in two bank stocks, Citigroup(NYSE: C) and Nu Holdings(NYSE: NU), and piled into a stock up over 34,770% since its initial public offering (IPO).

Selling Citigroup and Nu

Buffett and his team have long been experts in the banking sector. Over the 21st century, the company at one point or another has pretty much owned every major U.S.-based bank on Wall Street. That's why it was a big deal when Buffett acquired a stake in Citigroup in 2022 because he hadn't owned the stock since 2001, according to SEC filings. Citigroup has wildly underperformed its peers since the Great Recession and trades at a significant discount to tangible book value, making it a good candidate for Buffett's value playbook.Image source: Motley Fool.

It looks like Buffett has done OK on the position. Berkshire bought the bulk of its shares in early 2022 at an average share price of $53.40. The average price of Citigroup in the fourth quarter of 2024 and first quarter of this year, when Berkshire sold nearly all of its shares, was $71.68, although we'll never know the exact price the company sold at.

Given that Citigroup's transformation under CEO Jane Fraser, who took over in 2021, remains on track, and that the large U.S. banks will see tailwinds from deregulation, I think Buffett and Berkshire are selling too early. But Buffett has clearly soured on the banking sector in recent years, ditching a number of his bank holdings and downsizing on many of his existing bank stocks. He may think a recession is coming, and banks, which are cyclical, tend to struggle in a recession.

Berkshire also exited its stake in the Brazilian digital bank Nu Holdings. Berkshire got shares through the company's IPO and initially invested $500 million at a $30 billion valuation. Berkshire would eventually double that position and sold its stake in 2024's Q4 and Q1 of the year, during which time Nu had an average market cap of over $60 billion.

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Data by YCharts.

Nu grew incredibly fast in Brazil and Latin America by offering banking products with much lower (or zero) fees than other traditional banks in the region, enabling it to acquire customers at a very low cost. At the end of Q1, the bank had nearly 119 million active monthly customers and banked nearly 60% of the Brazilian adult population. Trading at less than 18 times forward earnings, Nu is not that expensive given its growth, but nonperforming loans have risen, and there are some concerns that Brazil's economy could slow in the back half of 2025.

Buffett thinks the water is fine on this stock

Berkshire didn't launch any new positions in the year's Q1, but it did significantly increase its stake in the large global swimming pool distributor Pool Corp.(NASDAQ: POOL) by 145% in Q1. Pool is still a relatively small position in Berkshire's portfolio, only accounting for 0.2% of total holdings. Since going public in 1995, Pool is up over 34,770% (as of May 16).

It's an interesting time for Berkshire to be increasing its position because Pool has not been performing too well lately. In Q1, Pool reported adjusted earnings per share and net revenue that missed consensus estimates, according to Zack's Research. However, the company did slightly increase its guidance for 2025.

Analysts lowered their price targets for the company following earnings. Over the last three months, 10 analysts have issued research reports on Pool, with three giving the stock a buy rating, six saying hold, and one sell. The average price target only implies slight upside, according to TipRanks. In a research note, Bank of America analyst Shaun Calnan said management is now calling for slightly lower gross margins that will be flat year over year.

Trading at nearly 29 times forward earnings, the stock isn't exactly cheap and has a trailing-12-month free-cash-flow yield of about 4%, which is solid but not anything spectacular. Still, given that the company claims to be the largest wholesale distributor of swimming pool products in North America, Europe, and Australia, it likely has a decent moat, and pool maintenance is typically a service that will hold up during a recession. Pool is also a very profitable company and recently increased share repurchases, so there is a lot to like about the company as well.

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Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Berkshire Hathaway. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.

Billionaire Investor Warren Buffett Recently Sold Citigroup and Nu Holdings and Piled Into a Stock Up Over 34,770% Since Its IPO was originally published by The Motley Fool

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