Buffett isn't interested in undervalued stocks in a vacuum; he looks for great businesses at a fair price. Some features of great businesses are a global brand name and a high return on tangible equity.

Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) submitted its Form 13F for the fourth quarter. That document detailed several changes to its portfolio, including the fact that Berkshire sold its stake in the Vanguard S&P 500 ETF (NYSEMKT: VOO).

Two historically inexpensive stocks in Berkshire Hathaway's $297.5 billion portfolio are ripe for the picking, while the Oracle of Omaha's top holding is sending all the wrong signals.

Over the previous nine quarters (Oct. 1, 2022 through Dec. 31, 2024), Berkshire's billionaire leader has been a net seller of stocks, to the tune of almost $173 billion on an aggregate basis. This includes $134 billion in selling in 2024 and the company's cash pile ballooning to north of $334 billion, including U.S. Treasuries.

Here are three ways to follow the path set out by Berkshire Hathaway and Warren Buffett in the latest letter to shareholders.

Warren Buffett is a gifted teacher who explains complex topics in a digestible format. This year he touched on Berkshire Hathaway’s massive cash hoard, among other items.

Rexas Finance (RXS) has emerged as a disruptive force throughout the blockchain ecosystem where it brings innovation to decentralised finance (DeFi) and asset t