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Warren Buffett clearly takes the cake as far as buy and hold investor examples go. He will purchase a stock and hold on to it for years, if not decades. His methodology of owning stocks for the long haul produces incredibly large returns. If you follow Buffett’s long-term convictions, you’ll receive a great lesson in value investing.

We looked at Warren Buffett’s stock positions, going back one year, and recognize five of which he increased the size of his position substantially during that time.

Let’s take a look at the five stocks right now…

DaVita Healthcare Partners, Inc.

Out of the entire group, this company carries the smallest market. It comes in under $13 billion. The company provides dialysis services. Berkshire Hathaway increased their position by 127% during 2012. They steadily increased their share size each quarter.

Warren Buffett adds substantially to his winners, and that’s precisely what he did with DaVita. The company produced huge returns during 2012, and Warren Buffett’s position gained 41% in value.

During April 2013, Deutsche Bank upgraded the stock. They believe that the business will potentially generate better earnings at a rate of nine dollars per share in cash EPS.

Andreas Halvorsen, billionaire investor from Viking Global, owns DVA shares in the amount of 1.5% of his entire portfolio worth $14.4 billion.

DirecTV

We will now shire our company spotlight on DirecTV. When 2012 began, Warren Buffett owned 23 million shares of the company. By the end of 2012, Buffett owned 34 million shares. This roughly equates to a 50% increase.

Stifel Nicolaus upgraded the digital television provider to a buy during the middle of April. This upgrade is in addition to Guggenheim’s buy rating, which the company received during March 2013.

At the time of this writing, DirecTV shares rose 10% in value so far during 2013. The shares currently trade near the 52 week high. Recently, DirecTV dropped its bid to purchase Vivendi’s Brazilian unit. The move would have increased their South American and Latin presence. Shareholders recognized the bid drop as a relief. DirecTV’s share price rose 6% in value immediately following the announcement. Jim Simons, famed investor of Renaissance Technologies owns $200 million worth of DTV shares.

General Motors

Buffett continued to purchase shares of GM throughout 2012. Berkshire Hathaway’s share size grew by 150% during the previous year. In the first quarter of the prior year, Berkshire only owned 10 million shares of the automaker. By the end of 2012, their position size increased to 25 million shares.

General Motors came through with a fantastic annual return during 2012. Investors netted 37% even though sales dropped heavily during the summer.

The company plans to increase its capacity to produce vehicles. They intend to increase production to 5 million automobiles per year, and plan to open four plants in China during the next three years.

Greenlight Capital billionaire investor David Einhorn owns roughly the same amount of shares as Warren Buffett. Both investors currently own over 20 million shares each.

Liberty Media Corporation

In the entertainment industry, LMCA makes many high profile moves. It fits perfectly that Buffett chose to increase the size of his position by 87% from the first quarter of 2012 to the fourth quarter. The media company sold off Starz, its premium movie channel and the business worked deals with companies such as Charter Communications, Sirius XM Radio and Barnes & Noble.

Liberty Media plans to buy a 27% stake in Charter Communications. The deal will cost $2.6 billion. But that’s not all, as the company may have further interest in mergers and acquisitions.

James Dinan, billionaire investor of York Capital Management owns more than 1 million shares of Liberty Media Corporation. This company represents 3% of his investment portfolio.

The Bank of New York Mellon Corp.

BK outranks all of the previous stocks mentioned in regards to position growth. Berkshire Hathaway increased its position in the Bank of New York Mellon Corp. by 250% in 2012. They went from 5.6 million shares to a whopping 19.6 million shares throughout that period.

During 2012, BK shares climbed 24% in price, and the shares have risen another 5% since we’ve moved into 2013. The company reported earnings on April 17. They missed earnings-per-share estimates by 2%, and also missed revenue expectations as well.

Investor sentiment remains positive on the sell side. But, mean price targets remain a year out, and the company’s growth potential could increase by 4.4% during that time. Mario Gabelli, billionaire of GAMCO Investors, owns roughly 6,000,000 shares of the Bank of New York Mellon.

Warren Buffett recently appeared on CNBC’s Squawk Box, where the CEO of Berkshire Hathaway gave out some excellent advice to Apple Inc. and their management. Mister Buffett recommended to Tim Cook to buy back shares, spend his time focusing on the business, and forget about what’s happening on Wall Street.

Start a Share Buyback Program

“When Steve [Jobs] called me, I said, is your stock cheap? He said, yes. I said, do you have more cash than you need? He said, a little. I said, then buyback your stock,” said Warren Buffett.

Buffett also made another recommendation. He told Apple Inc. to give back the excess money to the shareholders in the form of a share buyback or a dividend.

But which is the best option?

There is currently a perception that Apple shares are cheap. Apple’s business is currently valued at 6.5 times trailing earnings, backing out of the $173 billion of the cash currently on the balance sheet of the company.

To put this in perspective another way… Apple’s P/E ratio hit bottom at 5.8 during the summer of 2000. At that time, the company was actually nearing bankruptcy. Since Apple is currently creating an amazing amount of cash, and their profits are growing in the double digits, it’s shocking that the discounted share price even exists.

Since the stock is actually trading at a very low valuation, a buyback program would be the best move since the company would be able to buy back shares at a very nice discount compared to intrinsic value.

As Warren Buffett puts it, “… If you can buy dollar bills for 80 cents, it’s a very good thing to do.”

Make the Business the Main Focus

“I would run the business in such a manner as to create the most value over the next 5 to 10 years,” said Warren Buffett.

The management at Apple should seriously focus on finding more opportunities to create added wealth for their shareholders. Here’s a couple of solid ways that they can do this:

invest in new technology – Apple could purchase some of the smaller players working on the bigger problems like sunlight readable screens, longer battery life, and even wideband antennas. By picking up the smaller firms already working on solving major issues, Apple would have a much bigger lead technologically than many of its competitors.

Reinvent the television – if iTV is ever going to be a major success, they need real quality programming. There is a rumor going around that Apple is seriously thinking about buying Netflix. This will give Apple a quick opportunity to pick up exclusive content and a valuable platform for distribution. It would likely cost Apple anywhere from $12 billion-$14 billion to acquire this company, and this is just a tiny fraction of the $50 billion that Apple has on hand in annual free cash flow.

Get your head in the clouds – the iCloud has a rumor surrounding it as a major part of Apple’s long-term growth strategy. One quality move Apple could make to improve its product is to purchase large data centers and applications.

Improve the current supply chain – if they make large advance deals to some of the component suppliers in use by their competitors, Apple could easily corner the hardware market. They can also develop manufacturing techniques that they would patent. This way their rivals would not be able to copy them.

As you know, this is mainly just my thoughts on this topic and nothing more.

Forget about the Share Price

“You can’t run a business to push the stock price up on a daily basis,” said Warren Buffett.

Wall Street always wants a quick bump in share price. It does not matter if it jeopardizes the company’s long-term prospects or not.

Over the last few weeks, we have seen several of these proposals…

Investor David Einhorn has called upon Apple to issue $250 billion in ‘iPrefs,’ which is a perpetual bond like security that pays out a 4% fixed dividend. Barclays also wants the company to issue $50 billion-$100 billion in debt in order to fund a massive share buyback.

Apple did not become the powerhouse company that it is by messing with spreadsheets or Excel formulas. The company succeeded because it creates incredible products loved by all of their customers. Apple would be much better off if they just ignored the investment bankers and their financial suggestions.