VeriSign: The stealth winner in Buffett's portfolio

VeriSign stock $VRSN are up more than 21% this year, making it Berkshire Hathaway's best-performing U.S. investment. With growth of more than 32% over the past 12 months, the firm is showing that its stable business model, high margins and removal of regulatory risk are delivering attractive returns to investors.

A stable business model with regular earnings:

.com and .net domain management - $VRSN collects domain registration and renewal fees

Growing number of websites - natural growth of the Internet drives revenue

EBITDA margin of over 65% - extremely profitable model with low operating costs

Reason for significance: $VRSN operates as an "internet utility" that capitalizes on the growth of the digital world without the need for high investment.

Regulatory uncertainty removed:

Federal contract extension - Biden administration allowed $VRSN to continue to manage domains

Ability to adjust pricing - company can periodically increase domain registration fees

Monopoly status - there is no competition for .com and .net domains

Reason for significance: A long-term contract guarantees stable revenue and reinforces investor confidence in the sustainability of profitability.

Buffett's bet on stability:

Berkshire Hathaway owns 14% of $VRSN

Held in portfolio since 2012, position increased in 2024

Long-term philosophy: bet on companies with high profitability and minimal risk

Investment perspective: why VeriSign is attractive:

Stable revenue - predictable model with recurring payments

High profitability - extremely high margins and low costs

Buffett endorsement - stock held by Berkshire Hathaway for over 10 years

Safe growth title - in a turbulent technology sector, VRSN is a defensive bet

VeriSign $VRSN is the "hidden treasure" in Buffett's portfolio, combining monopoly position, steady growth and minimal risk. For investors looking for a safe growth title without much volatility, VRSN is a very attractive option.