3 Buffett Shares For A Beginner’s Portfolio: Unilever plc, Tesco PLC And Mountview Estates plc

Unilever plc (LON:ULVR), Tesco PLC (LON:TSCO) and Mountview Estates plc (LON:MTVW) are three shares that could help transform your wealth.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Warren BuffettMulti-billionaire Warren Buffett — probably the world’s most famous and successful investor — follows a strategy of buying great businesses with a view to holding his shares ‘forever’.

What’s good enough for octogenarian Buffett should be good enough for an investor just starting out on the road to long-term wealth accumulation.

Today, I’m going to tell you why I think Unilever (LSE: ULVR) (NYSE: UL.US), Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US) and Mountview Estates (LSE: MTVW) are worth consideration for a beginner’s portfolio.

Unilever

Unilever, a £32bn FTSE 100 company, owns dozens of top international brands in the areas of food (eg, Knorr soups and sauces), personal care (eg, Dove beauty products) and home care (eg, Cif cleaners). Two billion people around the world use Unilever products on any given day.

Size, geographical diversification and the non-cyclical nature of the so-called ‘fast-moving-consumer-goods’ industry make Unilever a relatively steady share through all economic conditions. Investors are willing to pay a premium for such businesses, and Unilever’s current share price of 2,506p equates to over 19 times current annual earnings.

I’ll put that into context for you with the next company…

Tesco

Supermarket giant Tesco is trading on less than 10 times earnings at a current price of 179p. Tesco is so ‘cheap’ because of well-publicised troubles that you’re doubtless aware of.

Now, it’s the easiest thing in the world for investment pundits like me to only ‘tip’ companies that happen to be on the top of their game at the moment. The fact is, though, a fair number of tomorrow’s biggest long-term winners will come from among companies that are currently struggling and rated lowly by the market.

Tesco remains the dominant force in UK food retail, has established itself in a number of exciting foreign markets, and looks to me to have every prospect of being one of those big long-term winners, even if there may be a few years’ pain to go through yet.

And Buffett himself, who bought Tesco shares at a much higher price — an investment he recently described as a “huge mistake” — nevertheless continues to hold. Whether he will for ever remains to be seen.

You may not be able to bring yourself to back a struggling company if you’re a new investor. But do make a note of Tesco’s share price today, and see how the company performs over the next 10-plus years compared with currently highly-rated stocks, such as Unilever.

Mountview Estates

I suspect most new investors, as well as many seasoned market participants, won’t have heard of Mountview Estates. This £300m property company is tiny relative to the likes of Unilever and Tesco, but it has qualities I think make it worth consideration for a beginner’s portfolio.

The essence of what Mountview does is extremely simple, and is only really possible because of the very long-term view taken by the family that founded the company in 1937, and their descendants, who still run it today. Mountview acquires tenanted residential properties at a discount to their notional vacant-possession value, then sells them when they become vacant, often many years later.

The properties are recorded on Mountview’s books at cost, and so the market value is far in excess of the worth indicated by the company’s current share price of 7,725p. In other words, if Mountview simply shut down today and sold all its assets, you would see a handsome reward on your investment.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of Mountview Estates, Tesco, and Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

2 recession-resistant UK stocks I’d buy and hold for a decade!

Our writer details two UK stocks she believes could still continue to perform well in a recession and not feel…

Read more »

Back view of blue NIO EP9 electric vehicle
Investing Articles

Down 31% this year! Is now the moment to buy NIO stock?

NIO stock has moved sharply downwards in the past couple of months. Christopher Ruane likes the business potential -- but…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

2 dividend stocks I reckon could grow payouts for years to come!

This Fool is looking for dividend stocks and explains why these two picks could be primed to grow their payouts…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Should I buy, sell, or hold my Rolls-Royce shares at £3.50?

This Fool considers what he should do with his Rolls-Royce shares following the FTSE 100 company's excellent full-year results last…

Read more »

Couple working from home while daughter watches video on smartphone with headphones on
Investing Articles

With a spare £280, here’s how I’d start buying shares this March

Our writer reflects on what he has learnt on the stock market to explain how he would start buying shares…

Read more »

Businesswoman calculating finances in an office
Investing Articles

Are these expensive FTSE 100 stocks actually brilliant bargains?

Paul Summers takes a closer look at two FTSE 100 stocks that could recover strongly in time, despite already carrying…

Read more »

Investing Articles

What might the recent Aviva share price performance tell me as an investor?

Christopher Ruane looks at how the Aviva share price has performed over the past 12 months and considers whether he…

Read more »

Investing Articles

Down by a quarter, is the BT share price a steal?

The BT share price has more than halved in the past five years. What is holding it down -- and…

Read more »