Famous superinvestor, Charlie Munger, revealed in a recent regulatory filing his newest positions.  In Charlie Munger portfolio 2021 analysis, we will go into more detail about top 5 stocks this superinvestor had as of December 31, 2021.

Munger manages his investments via his fund, Daily Journal Corp, which holds about $0.3 billion according to the latest available 13F filling.  Click here for the latest available 13F filling.

The most notable stocks in Charlie Munger’s Q4 portfolio include Bank Of America Corp, Wells Fargo & Co, Alibaba Group Holding Ltd, Us Bancorp and Posco Adr. In addition to others mentioned in detail below.

We used the Q4 portfolio of Charlie Munger’s Daily Journal Corp to select his top 5 value stocks. We ranked the securities according to Munger’s stake value in each holding.

Summary

• Charlie Munger’s top 5 securities make up 100.0% of the entire portfolio.
• Daily Journal Corp owns position in 5 holdings, managing approximately $0.3 billion.
• Bank Of America Corp, Munger’s largest holding, makes up 39.6% of the total portfolio.

Bank Of America Corp (BAC)

Daily Journal Corp’s stake value: $102.3 Million

Percentage of Daily Journal Corp’s 13F Portfolio: 39.6%

Bank Of America Corp. does business in Commercial Banking industry, which is Finance and Insurance sector and has 213000 employees. Current CEO is Brian Moynihan.

As of February 08, 2022 Bank Of America Corp had a market cap of $398.52 Billion. Analysts predicted 1 year target price of $51.61 that exceeds the current price of $49.15 for 5.0%. Trailing twelve months P/E ratio is currently 13.82 making it a cheaper stock than the rest of the S&P500 index. Looking at revenue, Bank Of America Corp generated significant amount of revenue, $93707.0 million in 2021, surging by 26.3% in comparison to 2020 when it was $74208.0 million. Net income surged according to the latest fillings, jumping in 2021 by around 78.7% adding up to total of $31978.0 million. Besides, profit margin, which levels at 34.1%, shows an improvement, comparing to the the previous years.

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving clients in approximately 35 countries.

Wells Fargo & Co (WFC)

Daily Journal Corp’s stake value: $76.4 Million

Percentage of Daily Journal Corp’s 13F Portfolio: 29.5%

Wells Fargo & Co. does business in Commercial Banking industry, which is Finance and Insurance sector and has 268531 employees. Current CEO is Charles Scharf.

On February 08, 2022 Wells Fargo & Co had a market cap of $227.28 Billion. Analysts predicted 1 year target price of $62.84 that exceeds the current price of $56.41 for 11.4%. Trailing twelve months P/E ratio is currently 11.82 making it a slightly cheaper stock than the rest of the S&P500 index. Looking at revenue, Wells Fargo & Co generated significant amount of revenue, $82647.0 million in 2021, surging by 41.7% in comparison to 2020 when it was $58319.0 million (including credit losses provisions). Net income surged according to the latest fillings, jumping in 2021 by around 552.8% adding up to total of $21548.0 million. Further, in 2021, the net profit margin, was at 26.1%, shows an improvement compared the company’s previous years of operation.

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets. It provides a diversified set of banking, investment, and mortgage products and services, as well as consumer and commercial finance. In the communities it serves, the company focuses its social impact on building a sustainable by supporting housing affordability, small business growth, financial health, and a green economy.

Alibaba Group Holding Ltd (BABA)

Daily Journal Corp’s stake value: $71.5 Million

Percentage of Daily Journal Corp’s 13F Portfolio: 27.7%

Alibaba Group Holding Ltd does business in Software Publishers industry, which is Information sector. Current CEO is Yong Zhang.

As of February 08, 2022 Alibaba Group Holding Ltd had a market cap of $333.544 Billion. Analysts predicted 1 year target price of $199.6 that exceeds the current price of $118.16 for 68.9%. Trailing twelve months P/E ratio is currently 17.11 making it a slightly cheaper stock than the rest of the S&P500 index. Looking at revenue, Alibaba Group Holding Ltd generated significant amount of revenue, $717289.0 million in 2021, surging by 40.7% in comparison to 2020 when it was $509711.0 million. Net income was slightly higher than previous year, rising in 2021 by 0.8% totalling $150578.0 million. On top of that, the net profit margin, which was at 21.0%, has dropped compared to previous operations.

The company aims to build the main future infrastructure of commerce and is diversified in many business such as financials (Alipay) and information technology (Cloud). Alibaba Group’s mission is to make it easy to do business anywhere.

Us Bancorp (USB)

Daily Journal Corp’s stake value: $7.9 Million

Percentage of Daily Journal Corp’s 13F Portfolio: 3.0%

U.S. Bancorp. does business in Commercial Banking industry, which is Finance and Insurance sector. Current CEO is Richard Davis.

On February 08, 2022 Us Bancorp had a market cap of $88.587 Billion. Analysts predicted 1 year target price of $65.33 that exceeds the current price of $60.2 for 8.5%. Trailing twelve months P/E ratio is currently 11.71 making it a slightly cheaper stock than the rest of the S&P500 index. If we look at revenue, Us Bancorp generated high $23894.0 million revenue in 2021 which is a considerable increase of 24.2% compared to 2020 when it was $19242.0 million (including credit losses provisions). Net income surged according to the latest fillings, jumping in 2021 by around 60.6% adding up to total of $7963.0 million. Besides, profit margin, which levels at 33.3%, shows an improvement, comparing to the the previous years.

U.S. Bancorp, with nearly 70,000 employees and $554 billion in assets as of Dec. 31, 2020, is the parent company of U.S. Bank National Association, the fifth-largest commercial bank in the United States. The bank is committed to serving its millions of retail, business, wealth management, payment, commercial and corporate, and investment services customers across the country and around the world as a trusted financial partner.

Posco Adr (PKX)

Daily Journal Corp’s stake value: $0.6 Million

Percentage of Daily Journal Corp’s 13F Portfolio: 0.2%

Posco does business in Iron and Steel Mills and Ferroalloy Manufacturing industry, which is Manufacturing sector and has 35393 employees. Current CEO is Jeong Wu Choi.

As of February 08, 2022 Posco Adr had a market cap of $17.24 Billion. Analysts predicted 1 year target price of $65.33 that exceeds the current price of $60.2 for 8.5%. Trailing twelve months P/E ratio is currently 3.62 making it much cheaper stock than the rest of the S&P500 index. Looking at revenue, Posco Adr generated significant amount of revenue, KRW 76332000.0 million in 2021, surging by 32.1% in comparison to 2020 when it was KRW 57792795.73282 million. Net income surged according to the latest fillings, jumping in 2021 by around 313.0% adding up to total of KRW 6617000.0 million. In addition, the net income margin, which in 2021 was 8.7%, shows significant improvement set side by side with last few years.

Conclusion

The most interesting fenomen that happened in Charlie Munger’s portfolio is his increase in BABA. Many of other superinvestors are currently selling this stock, however, Munger sees great value and believes it will grow in value over time. Looking at financials, BABA showed great results in terms of revenue, however net income wasn’t so satisfactory. Slow net income growth is mainly attributable to heavy investment in Alibaba’s new bargain marketplace Taobao Deals, local consumer services, Taocaicai, used for local community group buying, and Lazada.

Top 2 banks, BAC and WFC still make Munger’s largerst proportion of portfolio, almost 70%. Along with US Bancorp, all three banks showed significant improvement in revenue and net income during 2021.

To conclude, here is the list of the top 5 stocks and most recent financial indicators of these stocks as of February 08, 2022.

Stock	% of portfolio	Market Cap (USD)	P/E	Net earnings (USDm)	Net earnings y/y	Profit margin
Bank Of America Corp (BAC)	39.6%	398.843B	13.8	31978	78.7%	34.1%
Wells Fargo & Co (WFC)	29.5%	228.582B	11.9	21548	552.8%	26.1%
Alibaba Group Holding Ltd (BABA)	27.7%	338.768B	17.1	150578	0.8%	21.0%
Us Bancorp (USB)	3.0%	88.498B	11.7	7963	60.6%	33.3%
Posco Adr (PKX)	0.2%	17.279B	3.6	6617000	313.0%	8.7%

You can find the above stocks on Interactive Brokers.

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