Emmanuel Lemelson

Large US health insurers provide a ubiquitous service with few alternatives for Americans, so they will not disappear even if Trump administration policies hurt earnings. They trade at very low valuations with no going-concern risk, defensible moats, locked-in customers, and pricing power; Centene can reprice, and UnitedHealth has a dividend. Extreme negative sentiment and long histories of consistent earnings create an opportunity to buy productive assets at a huge discount.

UnitedHealth is the largest portfolio position and very cheap with a dividend. It has faced extraordinary rough patches, including the CEO assassination, ethical/regulatory scrutiny, and negative sentiment, but underlying economics are good, regulatory matters often resolve with payments or operational fixes, and new leadership is moving in the right direction. Buffett's $1.5 billion stake in UnitedHealth validates the unloved health insurer sector, and he expects it to outperform the market in coming quarters.

Flower Foods makes bread products including Dave’s Killer Bread and Nature’s Own and is getting cheaper and cheaper. Lemelson has been buying because demand for staples like bread, milk and eggs persists through economic cycles; earnings have been remarkably good despite a heavy acquisition that likely overpaid, creating a bump-in-the-road opportunity. He calls it not as screaming a bargain as Centene but a boring, defensive value holding.