Given recent market trends and the rising significance of the healthcare industry, Warren Buffett has been betting on AbbVie (ABBV) and Merck (MRK), as revealed in Berkshire Hathaway (NYSE:BRKa)'s latest 13F filing. However, we think the macroeconomic and exogenous headwinds faced by Chevron (CVX) and Charter Communications (NASDAQ:CHTR)—which are also held by Berkshire—make them best avoided now. Read on.Warren Buffett is one of the world’s most respected investors. He is known for his value investing strategy, in which he advocates a buy-and-hold approach whereby investors hold their positions for a prolonged period to benefit from rising share prices over the long term. Buffett’s latest bets have been in the healthcare industry--an industry he believes has immense growth potential given the technological integration and breakthrough developments made by several companies to treat critical diseases.
Berkshire Hathaway’s biggest holdings in the healthcare industry are AbbVie Inc . (NYSE:ABBV) and Merck & Co., Inc. (MRK). These leading biopharma companies are poised to grow significantly in the near term as they expand their drug pipelines.
However, Buffett has been reducing his exposure in several stocks, including Chevron Corporation (NYSE:CVX) and Charter Communications, Inc. (CHTR). Surging volatility in oil prices since the beginning of the year has caused a decline in CVX's operating margin in its last reported quarter. In CHTR’s case, the rising demand for over-the-top (OTT) platforms in lieu of traditional cable services has made CHTR less attractive.