Warren Buffett Going Out With a Bang. 2 Stocks He Just Doubled Up On

Warren Buffett is one of history’s most renowned investors, leading Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) to extraordinary success over decades. His investment philosophy is rooted in the value investing principles learned from Benjamin Graham, emphasizing buying undervalued companies with strong fundamentals and holding them long-term. 

Buffett’s disciplined approach, focusing on businesses with durable competitive advantages, or moats, has yielded remarkable returns, transforming Berkshire into a conglomerate with diverse holdings in insurance, railroads, utilities, and consumer goods. His knack for identifying quality companies, coupled with his patient, contrarian mindset, has made him a billionaire and a global investing icon. 

The Oracle of Omaha’s annual shareholder letters are packed with wit and wisdom, and are studied by investors worldwide for insights into markets, risk, and strategy. 

However, last month Buffett shocked Wall Street by announcing he will step down as Berkshire’s CEO by year-end, marking the end of an era. But he’s not slinking away. In typical fashion, he went fishing in the shallow end of the value pond, adding to his position in several stocks he owned, including two he doubled up on. 

Let’s take a closer look at these discounted stocks and see why Buffett is signaling he has confidence in their long-term value.

Constellation Brands (STZ)

Constellation Brands (NYSE:STZ) is a leading alcoholic beverage company whose discounted price caught the attention of Warren Buffett who increased Berkshire Hathaway’s stake by 113.5% in Q1 2025.Buffett now owns over 12 million shares valued at approximately $2.2 billion. He first acquired a position in STZ stock in the fourth quarter.

This move aligns with the Oracle’s value investing philosophy, which prioritizes companies with strong fundamentals, competitive advantages, and attractive valuations. Constellation, with its portfolio of premium brands like Modelo, Corona, and Robert Mondavi, fits this mold. Its dominance in the U.S. imported beer market, particularly with Modelo as the top-selling beer, underscores its brand strength and pricing power, qualities Buffett values for their enduring demand.

Despite recent challenges, including a 14% stock decline in 2025 due to tariff concerns and a $2.25 billion goodwill impairment, Constellation’s forward P/E ratio of under 15 and a price-to-free cash flow ratio of 17 suggests it is undervalued compared to the S&P 500’s average. Buffett likely sees the sell-off as an opportunity to buy a quality business at a discount, a hallmark of his strategy. 

Constellation’s $1.9 billion in free cash flow in fiscal 2025 supports a 2.2% dividend yield, further appealing to Buffett’s preference for reliable income streams. While near-term risks like Mexican import tariffs and shifting consumer trends persist, Constellation’s strong brand portfolio and consistent dividend growth signal long-term resilience, making it a classic Buffett value stock with potential for sustained profitability.

Pool (POOL)

The second stock Buffett doubled up on in Q1 is Pool (NYSE:POOL), increasing his stake by 144.5%. Berkshire Hathaway now holds approximately 1.46 million shares valued at $470 million, reflecting a strong conviction in its long-term potential. He also acquired his first tranche of POOL stock in Q4.

Pool is the world’s largest wholesale distributor of swimming pool supplies and outdoor living products, another company that aligns with Buffett’s investment philosophy. Operating over 445 distribution centers across North America, Europe, and Australia, Pool commands a dominant position in a fragmented market, serving 125,000 wholesale customers with products like maintenance supplies and construction materials.

Despite a post-pandemic slowdown, with 2024 net sales of $5.3 billion and about a 15% decline in new pool construction, Pool’s recurring revenue model — 65% of sales come from maintenance products — ensures stability. Its stock trades 22% below its recent highs and Buffett likely sees Pool’s strong market position, high return on invested capital, and consistent cash flow as a moat that protects against economic downturns. Additionally, its Pool360 platform enhances efficiency, supporting long-term growth. 

The pool products supplier has paid a dividend for 22 consecutive years and raised the payout 20 times, including each year for the past 15 years. Over the past five years, Pool has hiked its dividend at an 18% compound annual growth rate, though its latest increase last month was only 4%. 

While short-term challenges like high interest rates and housing market cyclicality persist, Pool’s resilient business model and strategic acquisitions make it a quintessential Buffett value stock for long-term growth and income.

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