The Motley Fool

Stock buys for December! I like to follow Warren Buffett’s example

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.

Beautiful holiday decorated background with christmas gift boxes ,fir. christmas holiday concept
Image source: Getty Images

Legendary investor Warren Buffett has imparted his investing advice for many decades now, chiefly through his annual letter to shareholders.

For instance, in Berkshire Hathaway’s most recent letter, Buffett wrote that “our prime goal in the deployment of your capital is to buy ably-managed businesses, in whole or part, that possess favorable and durable economic characteristics. We also need to make these purchases at sensible prices.” This is great wisdom for any investor to keep in mind.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Buffett’s best buys

Warren Buffett’s top four holdings in December 2018 were Apple, Bank of America, Wells Fargo and Coca-Cola. Today I’m looking at similar investments that could be made on this side of the pond.

How about banking? Although the banking sector is a favourite of Buffett’s, with so much economic uncertainty, clouding the UK now, it’s possibly not the safest area to invest in.

The Lloyds Bank (LSE:LLOY) share price has risen 7% in the past three months and has many appealing features including a generous 5.4% dividend yield and price-to-earnings ratio (P/E) of 10.7. Its PEG factor is 0.4 and a value of less than 1 can indicate a company is undervalued, so this caught my eye. However, there is no getting away from the external pressures on the bank, such as costs incurred from the PPI mis-selling scandal and increasing opposition from streamlined FinTech competitors.

According to the Office for National Statistics, employment fell by 58,000 in the three months to September, which is the biggest fall since May 2015. Wage growth has also slowed. This could mean further interest rate cuts are on the cards, which does not bode well for big banks such as Lloyds.

So, moving on from banking, what about consumer goods?

Britvic share price

FTSE 250 drinks company Britvic (LSE:BVIC) may not be in the financial realms of Coca-Cola, but it has proven to be a worthy winner this past year, with its share price up almost 25%. Although I think future growth may already be priced in, it’s one to consider on a dip. So, if the upcoming general election brings swings in share prices, which I think are inevitable, then this would be a great chance to jump on board long-term holdings such as Britvic. It has earnings per share of 44p, a P/E of 21 and a dividend yield of 3%.

Some of its brands include Robinsons, Lipton and R Whites and it also has the licence to sell Pepsi Max in the UK. It has withstood the sugar tax challenge well with its range of sugar-free offerings and I think its well-loved brands would hold up in a recession too.

US stocks

If you want to emulate Warren Buffett but don’t want to buy individual shares outright, you could look at a fund such as a global ETF targeting US stocks. This will give you exposure to a big collection of stocks. An ETF such as iShares NASDAQ 100 UCITS ETF tracks an index whose constituents include tech giants Apple, Microsoft, Amazon, Facebook and Alphabet, along with Pepsi.

UK recession fears could sink shares further before they rise again, but this gives savvy investors the perfect opportunity to buy up bargains on the dip. If you’d rather err on the side of caution, then buying into an ETF dilutes your risk and gives you a small piece of some huge pies.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Kirsteen has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Britvic. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.