A quick look at the top 10 stocks that legendary investor Warren Buffett owns through his company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), reveals that seven of them have gained at least 25% in 2021, at least five have 35%, and the best performer is nearly 48%, as of this writing. the Standard & Poor’s 500 In contrast, the index is up 27% so far this year. While Berkshire owns a large number of stocks and not just these 10, these numbers explain why many investors follow Buffett’s approach to stock selection, or often buy the shares he owns.
I wouldn’t totally recommend putting your money into stocks just because Buffett owns it, but the Berkshire portfolio is an excellent hunting ground if you’re looking for stock ideas. Here are three stocks from Buffett’s company that I think are a no-brainer before the end of the year.
Concerns are exaggerated, catalysts underestimated
Visa (NYSE: V) Stocks were very disappointed in the second half of 2021, in part due to the ongoing feud with them Amazon (NASDAQ: AMZN) And renewed fears of new Corona virus closures that may harm consumer spending. While the latter is a risk that won’t affect Visa alone, the company is eager to resolve issues with Amazon, and that could be one of the biggest drivers for Visa stock in 2022.
Amazon intends to ban payments with Visa cards on its platform starting January 19 due to high transaction fees. Visa expressed surprise at Amazon’s decision, saying that such transaction fees are regulated in the UK, and it is already negotiating with the e-commerce giant. There is a good chance Amazon will back down, as the move could cost Amazon UK nearly £1.4 billion, according to a British newspaper. independent.
So, while it strives to settle its dispute with Amazon, Visa has not lost sight of innovation and growth. For example, it just acquired CurrencyCloud for nearly $925 million. While the cloud-based CurrencyCloud enables cross-border foreign exchange services across 180 countries and even has access to RippleNet as part of its partnership with Ripple, which owns the popularly named cryptocurrency, Visa is also reported to have partnered with 60 cryptocurrency exchanges to launch cards. Make it easier to spend on digital currencies.
Visa’s operating performance leaves little room for complaint either – its payment volume increased 16%, and income and net income grew 10% and 13%, respectively, in the fiscal year ending September 30. 17% earnings and the world is increasingly switching from cash to digital payments in this pandemic, this Buffett stock is a must-have for any long-term investor.
Car inventory is no longer boring
Stocks in the old car industry general motors (NYSE: GM) It’s up nearly 37% this year as of this writing, but the stock is still trading significantly below its five-year average price-to-earnings ratio. Given the pace at which GM is exploiting the electric vehicle (EV) boom, the stock appears set for stronger days to come.
In mid-2021, General Motors outlined ambitious plans to invest $35 billion in electric and self-driving cars between 2020 and 2035. By 2030, GM expects its revenue from electric vehicles to jump to nearly $90 billion, from $10 billion. in 2023.
On December 17, General Motors delivered the first GMC Hummer EV pickup. On the same day, GM’s wholly owned subsidiary, BrightDrop, delivered its first 500 fully electric EV600s to… FedEx. Days later, General Motors announced plans to expand its electric vehicle technology beyond its brands by providing electric vehicle components and solutions to help others power their fleet, including in the marine industry. General Motors’ majority-owned subsidiary Cruise expects the automaker to begin manufacturing a self-driving car called Origin in 2023.
In short, there are plenty of events happening at GM that should excite auto investors and excite any investor looking to buy Buffett stock now.
Big bet on the world’s largest electric vehicle market
For several months now, I’ve been pounding the table on another auto inventory that Buffett owns: Globalism (OTC: Yes). Many investors have been wary of investing in Chinese stocks, given the potential US delisting risks they face, but BYD is already listed on the Hong Kong Stock Exchange. And The company shoots all cylinders from an operational point of view.
BYD is one of the largest electric vehicle manufacturers in the world and one of the largest lithium-ion battery manufacturers in China, which is also the largest electric vehicle market in the world. BYD is currently the largest seller of new energy vehicles (NEVs) in China, with monthly sales approaching the one million mark. At this pace, BYD could capture 25% of the Chinese NEV market in 2022.
Notably, BYD is also rapidly expanding its presence outside of China, particularly in Europe. BYD already builds and sells electric buses in the United States. There’s a lot going on at BYD, too: In December alone, BYD announced that it will launch its second model in Singapore in 2022 and increase its stake in its joint venture with Daimler to 90%. BYD is also entering the self-driving space with a joint venture, which could pave the way for much bigger things for the automaker. On top of all that, BYD is said to be in talks with Toyota To help launch the recent electric cars in China.
With NEV sales in China growing at a rapid pace and the lithium-ion battery market exploding, BYD is in a stronger position than ever to cash in on the boom, making it a no-brainer Buffett stock.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.