Warren Buffett is considered by many to be the best investor of all time. For more than five decades, Buffett has generated incredible returns for shareholders of Berkshire hathaway (NYSE: BRK.A) (NYSE: BRK.B), the company he helped build into a $ 440 billion masterpiece of American capitalism and one of the most admired companies in the world.
Berkshire has a large portfolio of publicly traded stocks, most of which were selected by Buffett himself. Berkshire’s portfolio is closely watched by investors who are judiciously looking to follow Oracle of Omaha’s investment movements.
If you want to invest alongside this legendary investor, here are three Berkshire Hathaway stocks that look particularly attractive today.
Buffett and his partner, Berkshire Vice President Charlie Munger have long been fans of Costco Wholesale (NASDAQ: COST). Berkshire purchased shares in the warehouse chain in 2000. The shares it owned now represent more than $ 1.3 billion.
Costco has been a very profitable investment for Berkshire – and it is likely to continue to reward investors in the years to come. The discount retailer recorded strong sales during the COVID-19 pandemic. Many buyers have turned to Costco for food, cleaning supplies and other essential household items. They will likely continue to do so during the rest of the pandemic and thereafter.
Costco’s membership model gives it a powerful advantage over other retailers. Once people pay a membership fee, they have an economic incentive to maximize their investment by making as many of their purchases at Costco as possible. Costco makes it easy to do by setting a price slightly higher than its cost and choosing to get the majority of its benefits from membership fees.
Low prices encourage more people to join, which leads to higher profits – it’s a powerful formula that has propelled Costco’s growth for decades, and which should continue to fuel its expansion for many years to come. come.
Berkshire has also built a large stake in the colossus of e-commerce Amazon.com (NASDAQ: AMZN). Berkshire’s initial investment in Amazon was made by Todd Combs or Ted Weschler, handpicked lieutenants of Buffett, who oversee large portions of the mega-conglomerate’s investment portfolio. Buffett has clearly endorsed Amazon’s ownership since then, and has repeatedly lamented his failure to invest in the market earlier. Nevertheless, Berkshire’s stake in Amazon has reached more than $ 1.2 billion – and many more gains remain to come.
Amazon has three main growth engines – all of which should help fuel the company’s impressive growth over the next decade. The first is its dominant e-commerce business, which experienced particularly impressive growth during the coronavirus crisis as more purchases move online and move away from traditional retail channels. The second is Amazon Web Services, the rapidly growing cloud computing platform. And the third is Amazon’s booming digital advertising business, which is fueled by its army of third-party marketers eager to get their products in front of more online buyers.
Together, these powerful growth drivers offer Amazon – and its investors – many ways to profit from the coming years.
Apple (NASDAQ: AAPL) is Berkshire’s biggest participation and a Buffett favorite. In fact, Buffett called Apple “probably the best company I know in the world.” His affection for this led Berkshire to amass a whopping $ 72 billion stake in the tech titan.
Buffett appreciates the strong appeal of Apple consumers and the loyalty of his customers to his devices, including, of course, the iPhone. He understands the value of Apple’s growing service business, which is driving an ever-expanding – and increasingly recurring – high-margin revenue stream. Buffett also likes the record of Apple’s fortress, its impressive cash-generating capabilities and its propensity to engulf its own actions.
If you agree with Buffett and also appreciate these aspects of Apple’s business, you may want to consider buying some of his shares today. Buffett will likely buy more shares of his favorite stake at some point, because he once said that he “would like to own 100%” of Apple. It could turn out to be too big a bite to eat, even for a giant like Berkshire. But buying now gives you a chance to claim your share of Apple – before Buffett gets even more shares.