Wouldn’t you like to be able to see exactly which stocks one of the greatest investors of all time likes? The good news is that you can.
Most of Warren Buffett’s net worth is invested in Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) stock. Berkshire’s investment holdings are publicly available since the company has to list all of the stocks it owns in regular filings to the U.S. Securities and Exchange Commission (SEC). You can rest assured that if Buffett really likes a stock, it’s in those filings. And if he doesn’t like a stock, it won’t be.
But some of the stocks that the legendary investor likes are better picks than others. Here are three Warren Buffett stocks that are worth buying right now.
Image source: The Motley Fool.
1. Berkshire Hathaway
Berkshire Hathaway itself absolutely is a stock that looks like a great buy. Of course, it’s Buffett’s favorite stock of all time. Even if it wasn’t, Berkshire would still be one to seriously consider buying right now.
For one thing, it’s dirt cheap. Berkshire shares trade at just a little over book value. Perhaps more importantly, the stock price is even lower than it was while the company was buying back shares last year. If Buffett approved share buybacks when the class B shares were priced at over $200, you can bet that he thinks his own stock is a bargain now.
Berkshire also has a massive cash stockpile that totaled $125 billion at the end of 2019. Do you like the idea of one of the world’s most successful investors having that much dry powder during one of the steepest market meltdowns in history? I do too.
My hunch is that Buffett and his team aren’t deploying all of that cash just yet, though. They realize that the economic impact from the COVID-19 pandemic could last for a while. There could be even better bargains over the next few months. When you buy Berkshire Hathaway, you profit from their investing expertise.
2. Apple
Buffett almost certainly puts Apple (NASDAQ:AAPL) as his solid No. 2 pick behind Berkshire Hathaway. How can I be so confident in that statement? Apple is Berkshire’s single largest holding.
To be sure, Apple isn’t as cheap as it was in March. The stock has largely rebounded after plunging more than 20%. Apple could also experience some headwinds from the economic slowdown resulting from the pandemic. However, I think there are at least three good reasons to buy the stock.
First, Apple has launched a new version of the iPhone that’s significantly less expensive than its other models. I expect this new product, iPhone SE, will be a big hit. Second, Apple’s service businesses — especially its App Store — actually benefited from the COVID-19 outbreak and should continue to become an increasingly larger moneymaker for the tech giant.
Third, the expansion of high-speed 5G networks presents a massive opportunity for Apple. The company plans to launch 5G-compatible iPhones later this year. I think that Apple could also benefit from 5G adoption with its augmented reality initiatives.
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3. Mastercard
Mastercard (NYSE:MA) doesn’t rank among Berkshire’s biggest holdings. However, I think it could be one of Buffett’s biggest long-term winners.
The payment processing stock is still down by a double-digit percentage from its highs earlier this year. Mastercard’s business is feeling the sting from COVID-19 as the sharp decline in travel is resulting in fewer credit card transactions. the company wisely withdrew its full-year 2020 outlook in light of the uncertainty about the impact of the COVID-19 pandemic.
But the future prospects for Mastercard remain very bright. The company is well-positioned to be a victor in the “war on cash” — a term used to describe the trend of consumers switching to electronic payment methods from physical currency and checks.
Mastercard wins as more people use credit cards to make purchases. That’s something they’ll do a lot more as e-commerce continues to grow. And the company doesn’t have to worry about new competitors. Mastercard and Visa together dominate the payment processing industry. There’s not much of an opportunity for a new player to break in.
Buffett loves stocks with great growth prospects and strong moats. So should you.