Three Instant Investment Opportunities Suggested by Warren Buffet at Present
If you're familiar with investing legend, Warren Buffett, you're likely in awe of how he's boosted the value of his company, Berkshire Hathaway, by nearly 20% annually, on average, for close to 60 years. Buffett has a knack for acquiring successful companies outright and investing in the stocks of others. Berkshire's portfolio includes big hits like GEICO, Benjamin Moore, Dairy Queen International, the entire BNSF railroad, and significant shares of powerhouses like American Express, Coca-Cola, and Bank of America.
Considering joining Buffett's success story? Investing in Berkshire itself might be an option. Alternatively, you could look into the stocks that Buffett and his investment lieutenants, Ted Weschler and Todd Combs, have backed. Here are three to ponder:
1. Amazon
Berkshire owns over $1.9 billion worth of Amazon.com stock, although it isn't among its top holdings. Still, Amazon's massive online marketplace, Amazon Web Services (the leading cloud computing platform), GoodReads, Fire devices, Zappos shoes, Ring devices, Whole Foods Market, Audible, and numerous other businesses make it a compelling consideration. Amazon's recent market value is an impressive $2.4 trillion, and it's still growing at a good clip. Despite this, its forward-looking price-to-earnings (P/E) ratio stands at 36, well below its five-year average of 52, suggesting it might be a bargain.
2. Chevron
Chevron makes up a substantial portion of Berkshire's holdings, with a 6.6% stake. As a major integrated oil and gas enterprise, it's exposed to the ups and downs of the energy market. Chevron boasts a recent market value of nearly $290 billion. While its third-quarter earnings weren't as impressive as some might have hoped, it's still a strong dividend-paying stock that has given regular dividends for years and plans to reduce its spending to improve results. Its relatively modest forward P/E of 13 supports its attractive valuation, and its generous dividend yield of 4% makes it appealing to income-focused investors.
3. Visa
Visa is another Berkshire favorite, with a recent market value of $620 billion. As a financial powerhouse, Visa dominates the global payments market, with operations in over 200 countries, more than 4 billion cards, and 300 billion transactions annually. While its forward P/E isn't the most attractive for a growth-focused investor, it's still reasonable, given Visa's strong growth prospects. Its dividend yield may not break the bank, but it has been on an impressive growth trajectory, with dividends per share per year soaring from $1.05 in 2019 to $2.15 in 2023. Visa's low capital intensity makes it an attractive option for many investors.
These are just a few of Berkshire Hathaway's high-performing picks. With diligent research and careful consideration, you may discover other stocks that align with your investment goals. Don't forget to explore high-performing dividend-focused ETFs and growth-oriented ETFs as well.
If you're interested in replicating Warren Buffet's investment strategies, you might consider investing in the stocks Berkshire Hathaway holds or endorses. For instance, Berkshire has a significant stake in Chevron, a major oil and gas company with a strong dividend history and an attractive valuation. Additionally, investing in Visa, a financial powerhouse dominating the global payments market, could also be a promising move, given its growth prospects and low capital intensity. Being aware of the stocks Berkshire Hathaway and its investment team, Ted Weschler and Todd Combs, are backing can provide valuable insights into potential investment opportunities in the finance sector.