Matt Frankel, The Motley Fool

Mon, May 19, 2025, 5:22 AM5 min read

• Berkshire Hathaway owns nearly 10% of Ally Financial, and it is by far the most unique bank stock in Buffett’s portfolio.

• NVR is an asset-light homebuilder that is well positioned to thrive when interest rates fall.

• Both could be excellent stocks to hold over the next five to 10 years.

• 10 stocks we like better than Ally Financial ›

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) owns dozens of stocks in its closely followed $287 billion portfolio, many of which were hand-picked by legendary investor Warren Buffett himself.

To be sure, there's a solid bull case to be made for most of the stocks in Berkshire's portfolio. Buffett and his investment managers tend to focus on companies that are among the leaders in their respective industries, have stable and growing cash flows, and trade for a reasonable valuation.

However, there are some that look more attractive than others right now. Two in particular that could be worth a closer look are innovative bank Ally Financial (NYSE: ALLY) and asset-light homebuilder NVR (NYSE: NVR).

Ally Financial is the most unique bank stock in Berkshire's portfolio, as is an online-based financial institution that specializes in auto lending and high-yield deposit accounts. As of the latest information, Berkshire owns 9.4% of Ally, a stake worth just over $1 billion.

Ally is doing quite well despite the difficult consumer spending environment. It received more auto loan applications in the first quarter of 2025 than ever before, and with an average yield of 9.8% from new auto loans, this can be a highly lucrative business.

The largest auto lender that isn't owned by the manufacturer, Ally (which was spun out of General Motors years ago) is well positioned to benefit from expected interest rate cuts over the next few years. For one thing, lower rates are likely to lower Ally's deposit cost and improve margins. The bank currently has an average yield of 7.1% from its loan portfolio and a deposit cost of about 3.8%, so the latter coming down would almost certainly boost profits. In addition, lower rates would likely result in more demand for auto loans.

Ally has excellent asset quality, and its net charge-off rate has actually declined over the past year, unlike many other banks. Its insurance business is thriving, and although there is significant economic uncertainty right now, Ally is a highly profitable bank that is well positioned to grow and expand its margins over the next few years.

NVR is one of the largest homebuilders in the United States and is best known for its NV Homes and Ryan Homes brand names.