Warren Buffett spent 2020 selling stocks. Between airlines, energy companies, and banks, he shed a lot of equities from his portfolio. In fact, Buffett did so much selling in 2020 that he was a net seller of stocks for the year — a first for his career.
Among the major casualties of Buffett’s selling spree were his Canadian equities. In 2020 and early 2021, Buffett exited all of his Canadian stocks — including some that he held for a very long time. It was a major vote of no confidence in Canada from the Oracle of Omaha.
But if you’re a Canadian investor, you needn’t worry. Despite Buffett having sold all of his Canadian stocks, some of those said stocks are doing quite well. In fact, some of them are positively crushing the market. In this article, I’ll explore three stocks Buffett sold that are surging in 2021 — two Canadian and one American.
Suncor Energy
Suncor Energy (TSX: SU)(NYSE: SU) was the last TSX stock that Warren Buffett shed from his portfolio. He exited the position in Q1 2021, and it’s beginning to look like he made a mistake in doing so. For the year, Suncor Energy is up about 33% — a market-beating return.
Suncor had a tough year in 2021, with four consecutive net losses. In Q1, things started to turn around. In that quarter, the company cranked out $2.1 billion in funds from operations (FFO), $746 million in operating income, and $821 million in net income. Thanks to the recovery in oil prices post-COVID, Suncor was able to return to positive earnings and cash flow growth. If oil prices remain strong, then Suncor will do well for the full year, too.
Restaurant Brands
Restaurant Brands International (TSX: QSR)(NYSE: QSR) is a stock that not many people expected to see Buffett sell. He owned the stock ever since the company was founded in 2014 and sold it in 2020. Restaurants, of course, took a huge hit in 2020. The pandemic forced them to close down, because indoor dining was seen as a source of community spread. That definitely impacted Restaurant Brands in 2020. However, as a fast-food company, it had plenty of drive thru and take-out options available to it. As a result, it made it through the worst part of the pandemic without a scratch.
Delta Airlines
Delta Airlines (NYSE: DAL) is the last stock on this list and the only non-Canadian stock. Delta might seem like the odd one out here, but it’s relevant to Canadian investors when we consider its similarity to a widely followed Canadian stock: Air Canada.
Like Air Canada, Delta suffered a terrible year in 2020. Its revenue collapsed. Its customers stayed home. It was forced to do dilutive equity sales. On the whole, it just wasn’t a good time for the company. But this year, things are starting to change. With travel on the rise, DAL stock is rising too. So far this year, it’s up 8.5%. At the April peak, it was up 33%, but it has given up some gains since then. On the whole, Delta stock has done phenomenally well since Buffett sold it. This may be a lesson for Canadian investors in stocks like Air Canada. Just because a business is doing poorly today doesn’t mean its stock doesn’t have potential.
