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After facing hurdles in the auto financing sector, Arai Financial’s stock seems poised for a rebound.
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Chevron’s performance suffered last year due to low oil prices, yet some encouraging developments might alleviate this ongoing challenge.
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This year, Kraft Heinz’s proposed split could be a significant step towards realizing its full value.
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It’s interesting to note, there are stocks that some might prefer over Ally Financial.
In a significant change, as of December 31st, Warren Buffett is no longer serving as CEO of Berkshire Hathaway, though he will continue as chairman. This is notable because he had been the focal point for investment decisions.
That said, Greg Abel’s leadership at Berkshire doesn’t mean they’ll shift their investment philosophy drastically. The focus remains on durable, competitive, and high-quality businesses.
Moreover, investors still have the chance to follow Buffett’s previous investment strategies. They can consider the stocks Berkshire currently holds, like Ally Financial, Chevron, and Kraft Heinz, as potential opportunities as the market approaches 2026.
Ally Financial, reborn from the former GMAC after the Great Recession, has really emerged as a strong component in Berkshire’s portfolio lately. Berkshire holds around 9.4% of Ally, translating to approximately $1.3 billion.
Back when Berkshire started investing in Ally in early 2022, the company was struggling. Concerns about post-pandemic auto sales slowing down and rising interest rates made things tough.
Fortunately, Ally managed to overcome these issues through 2023-2024. The company has been on a recovery path, with stock prices predicted to rise nearly 30% in 2025, outpacing the S&P 500’s forecast of 16.4%. Optimistic operational results are fueling this recovery, with expectations for more progress next year.
Analysts are quite hopeful about Ally’s earnings as the auto loan market stabilizes and net interest margins improve. Current projections suggest earnings of $5.38 per share, significantly higher than the expected $3.75 in 2025. If this trend continues, Ally’s stock might reach or exceed its previous highs in the mid-$50s.
At first glance, Chevron might appear overly valued among Berkshire Hathaway’s investments. The integrated oil and gas company is trading at a forward price-to-earnings (P/E) ratio of around 20, which is a notable premium compared to rivals like ExxonMobil, sitting at about 16.9. Additionally, the energy sector is still under stress as oil and natural gas prices remain low. Yet, it seems hasty to think Chevron can’t turn around by 2026.
The elevated valuation of Chevron’s stock seems to stem from investor confidence in potential growth catalysts. Investors remain optimistic about Chevron’s aggressive cost-management strategies and plans to develop a natural gas power plant to supply energy for AI data centers.
Given the anticipated recovery in oil prices in the coming years, there’s a rationale for cautious optimism regarding Chevron’s stock. If earnings recover more quickly than expected, this energy company could see renewed interest next year.
Kraft Heinz remains a significant holding for Berkshire, with a 27.5% stake valued at around $7.9 billion. However, it’s a position that might not evoke fond memories for either the company or Buffett.
There was even a board member resignation last year, accompanied by a $5 billion impairment charge on that investment. Due to the circumstances surrounding this acquisition, Berkshire assesses this investment using the equity method, rather than marking it to market.
While Berkshire has recorded significant losses here, it doesn’t necessarily mean investors should shy away. Kraft Heinz’s strategy to separate its slower-growing staple business from its more rapidly expanding sauces and condiments line could reveal substantial value.
Currently, Kraft Heinz trades at a forward P/E ratio of 9.5, while many of its competitors are in the mid-teens range.
Before jumping into Ally Financial stock, it’s wise to consider some insights from analysts.
For instance, certain analyst teams have identified several stocks they deem better investments at this time—Ally Financial isn’t among them. These picks are projected to yield impressive returns in the near future.
Thinking back to some notable investments, like Netflix from 2004 or Nvidia back in 2005, it’s interesting to see how a $1,000 investment back then has transformed significantly over the years.
Just to be clear, these picks have historically outperformed the market, with an impressive average return compared to the S&P 500. This is definitely a community of investors worth considering.
*Stock advisor will return on January 6, 2026.
