NEW YORK (TheStreet) -- Warren Buffett is known for taking advantage of market downturns to make big acquisitions, but analysts say the current plunge will more likely lead Berkshire Hathaway (BRK.A - Get Report) to instead ramp up its holdings in companies it already owns.
"This is a good environment for Berkshire," said Jim Shanahan, an analyst at Edward Jones that covers Berkshire. "The company tends to outperform in weaker markets, so we can expect to see investments start to accelerate."
Analysts are looking primarily to financials, industrials and the beleaguered media sector for increased activity from Berkshire.
"I wouldn't be surprised to see stronger interest in U.S. Bancorp (USB - Get Report) , Capital One (COF - Get Report) , Visa (V - Get Report) and MasterCard (MA - Get Report) ," said senior analyst Greggory Warren of Morningstar.
Berkshire now owns almost 6% of the famously well-run U.S. Bancorps, worth roughly $4.25 billion, and 0.5% of Visa, worth about $865 million. Visa's stock is down 7.5% on the month to $68.33 a share.
Buffett lieutenants Ted Weschler and Todd Combs bet big on DirecTV in 2011 when shares were under $43, and by mid-2014, they'd more than doubled. In July of this year, DirecTV became a wholly owned subsidiary of AT&T (T) .
"We could also see more investment in Axalta (AXTA) and Charter Communications (CHTR) from Buffett," said Shanahan. "These are solid companies with the sort of growth profile Buffett likes."
Energy and industrials, which have taken a beating over the last year as a result of cascading oil and gas prices, are also coming into Buffett's view, according to Berkshire analysts. Industry experts have long expected the sector to consolidate due to diminishing revenues, though ambiguities in the long-term outlook for commodity prices have put the deal making process on hold.
"Buffett is probably eyeing that entire sector," said Cathy Seifert, equity researcher at S&P. "Berkshire already has a fair amount of exposure in that space, but they haven't articulated a strong desire for diversification."
Berkshire announced the largest acquisition in its history earlier this month, the $37 billion purchase of aerospace and energy sector manufacturer Precision Castparts (PCP) . The move will take a toll on Berkshire's free cash flow, which is why the company will likely hold off on any major acquisitions for the next year or two.
In the aftermath of the 2008 stock market crash, Berkshire acquired BNSF Railway for more than $26 billion. Buffett also put $3 billion into GE (GE) and $5 billion into Goldman Sachs (GS) in 2008, exploiting the companies' capital woes to secure a rich 10% annual dividend from each until 2011.
By Tobias Burns
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