Kroger: A Hidden Gem in Berkshire Hathaway's Portfolio

Berkshire Hathaway's conglomerate portfolio is known for its diverse range of investments. Its biggest consumer staples holdings include Coca-Cola and Kraft Heinz, but a smaller position in Kroger stands out as an attractive pick.

The grocery store chain has experienced a 20% pullback from March's high, causing its forward-looking dividend yield to inflate to a healthy 2.6%. This is based on a quarterly dividend payment that has been raised for 20 consecutive years, with the most recent increase being 11%.

New CEO Greg Foran's strategies seem to be working, as price cuts are taking a bite out of revenue but not affecting operating profits or free cash flow. The company's full-year guidance was lowered in last month's second-quarter report, but this may have been priced in by investors back in April.

Kroger's pullback from March's peak and the correction make sense given its efforts to become more competitive with Walmart and Aldi. However, this may have led investors to oversell the stock, making it a potential buy now.