Warren Buffett’s success over the years is no accident. It’s been proven (with his lucrative Berkshire Hathaway portfolio) that he has a good eye for the market and that he’s a natural investor whose wisdom and experience are both invaluable—especially in economically uncertain times.
Unlike some YouTube finance gurus, Buffett has weathered bear markets, bull markets, inflation, stagflation… the whole lot. When he’s kind enough to share his insights, it’s prudent to pay attention.
Within Buffett’s portfolio lies many options, and you obviously can’t invest in all of them.
I’ve found a few Warren Buffett-owned stocks in particular that I think are appropriate for today’s list for various reasons, and rest assured that the analysts are on board…
Louisiana-Pacific Corp (LPX)
Based in Nashville, TN, Louisiana-Pacific (LPX) is a building materials manufacturer specializing particularly in engineered wood building products. If you heed Mr. Buffett’s advice to not bet against America, if you will, then LPX could be considered one of his more promising stock picks. Since the beginning of the year, LPX has only shown a slight return to date but is trading near the bottom of its existing range, leaving plenty of room for its price to appreciate. LPX’s handsome dividend related to its pricing is also appealing from an income-investing standpoint.
LPX is up slightly by 0.84% year-to-date, carries a PEG (price/earnings to growth) ratio of 0.5x, has a positive ROE (return on equity), positive TTM (trailing twelve-month) momentum growth of 13.55%, and it has a nice low D/E (debt to equity) measure of 26.57%. LPX, for the current fiscal quarter, is projected to report $758 million in sales at $1.26 per share, with a 3-5 year EPS growth rate of 46.8%. LPX shows a TTM operating free cash flow of $206 million and a 1.57x P/S (price to sales) ratio. LPX has a 1.81% annual dividend yield and a quarterly payout of 24 cents ($0.96/year) per share. With a 10-day average volume of roughly 886 thousand shares, LPX has a median price target of $77, with a high of $88 and a low of $60; this suggests that there is potential for a 47.5% price leap from its current trading position.
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Coca-Cola Co (KO)
Coca-Cola Co. (KO), the iconic soft drink giant, embodies American capitalism and aligns with Warren Buffett’s investment principles. Despite a challenging 2023 so far, the good news is still there for KO in that the stock is trading around the middle of its existing range and has plenty of room for its price to climb. Volatility for the stock is considered low-risk in contrast to the broader market. Furthermore, it’s worth mentioning that analysts currently give KO a consensus strong buy rating. I’ll spotlight it below.
Adding to the above comment regarding volatility, you can see it clearly in KO’s low 0.55 beta score. While it’s down year-to-date by 7.44%, KO has an ROE of over 40%, a positive TTM asset growth measure, and $9.31 billion in free cash flow. For Q2 2023, KO exceeded analysts’ expectations on EPS and revenue by margins of 8.14% and 1.83%, respectively; during the same time, the beverage-maker unveiled crucial year-over-year growth in revenue (+5.71%), net income (+33.70%), EPS (+34.09%) and net profit margin (+26.46%). KO has an annual dividend yield of 3.13%, a quarterly payout of 46 cents ($1.84/year) per
share, and a 74.69% payout ratio. With a 10-day average volume of 11.58 million shares, KO has a median price target of $70, with a high of $76 and a low of $63, representing a potential 30% upside.
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Nu Holdings Ltd (NU)
Nu Holdings (NU), a financial technology (fintech) expert headquartered in Sao Paulo, Brazil, stands out as one of the potentially more volatile choices among the top Warren Buffett stocks to consider. As indicated in its public profile, NU has established itself as one of the globe’s leading independent digital banks. It has also been evident that Wall Street has a strong appetite for NU, as its shares have surged since the start of the year. Also, NU is in remarkable shape compared to where it was this time last year.
NU is currently up by 81.33% year-to-date, has a 0.82x PEG ratio, a positive 20/200 day SMA (simple moving average), an operating free cash flow of just over $2 billion, and shows positive TTM growth in assets (+33.43%) and momentum (+34.58%). At its Q2 2023 earnings call, NU reported EPS and revenue that beat analysts’ estimates by 42.20% and 5.26%, respectively; the firm also reported year-over-year growth in critical areas like revenue (+100.40%), net income (+857.20%), EPS (+600%), and net profit margin (+477.56%). With a 10-day average trading volume of 35.04 million shares, NU has a median price target of $8.85, with a high of $11 and a low of $4; this indicates the potential for an almost 50% price upside.
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