3 Warren Buffett stocks I’d buy for this bull market

Warren Buffett is billed as the greatest stock market investor of all time. Here, Edward Sheldon discusses three stocks the billionaire currently owns.

| 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.

Warren Buffett is regarded as the greatest stock market investor of all time. So I like to keep a close eye on the billionaire’s portfolio.

Here, I’m going to highlight three Buffett-owned stocks I’d buy for the current bull market. I think all three have the potential to climb higher in the near term (and, importantly, the long term).

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Amazon

One Buffett-owned stock I think looks very interesting right now is Amazon (NASDAQ: AMZN). It’s actually been a bit of a laggard in this bull market. While the S&P 500 has hit new highs recently, Amazon is still about 5% below its all-time high, set in September last year. I see this share price weakness as a buying opportunity.

Since the beginning of last year, Amazon has added 50m new Prime subscribers taking its total number to 200m. That’s an unbelievable rate of growth. Incredibly, 28% of these Prime customers buy something in less than three minutes when they hit the site, while half of all purchases are finished in less than 15 minutes. Given this huge, growing customer base, I think Amazon stock could be a great way to play the global economic rebound.

I’ll point out that the valuation here is quite high, which adds risk to the investment case. Currently, Amazon sports a forward-looking P/E ratio of about 70. If growth slows, the stock could underperform. However, given Amazon’s dominance (in both e-commerce and cloud computing) I’m comfortable with this risk.

Visa

Another Buffett stock I’d buy today is Visa (NYSE: V). It’s the world’s largest payments company. For every $1 spent at physical locations globally, about $0.15 goes through Visa’s payments network.

And Visa looks set for strong growth, in my view. In the short term, it should benefit from increased spending (many consumers are cashed up after lockdowns) and the return of travel. Meanwhile, in the long run, it should benefit from the shift away from cash towards electronic payments.

However, Visa isn’t a cheap stock. Currently, it sports a forward-looking P/E ratio of about 41. This adds risk. Another risk to consider is competition from FinTech players such as PayPal and Square. But overall, I think the long-term risk/reward proposition here is attractive.

Coca-Cola

Finally, I think Coca-Cola (NYSE: KO) – one of Buffett’s favourite stocks of all time – could be worth a closer look right now.

Coca-Cola strikes me as a classic ‘reopening’ stock. Last year, Coke struggled due to the coronavirus. For the year, revenue was down 11% while earnings dipped 13%. The rollout of the vaccine looks to be a game-changer, however. With restaurants and bars now opening, travel resuming, and live events set to start up again in the near future, Coke looks well-placed for a recovery. This year, Wall Street analysts expect revenue growth of about 11%.

Of course, the timing of this potential recovery remains uncertain. It could be a while before the world’s truly back to normal. Coke could continue to face challenges in the near term.

However, with many economists predicting a ‘roaring 20s’-like environment in the years ahead, I think Coke is a good stock to own as part of a diversified portfolio. The current valuation (forward-looking P/E ratio of 25) seems fair, to my mind, given the company’s competitive advantages.  

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Edward Sheldon owns shares in Amazon and PayPal. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon, PayPal Holdings, Square, and Visa and recommends the following options: long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. 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.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

These 2 cheap shares dived last week. I’d buy 1 today

Although global stock markets rebounded hard this week, these two cheap shares were left behind in this surge. But I…

Read more »

Female friends enjoying their dessert together at a mall
Investing Articles

Down 40% in 2022, should I buy this 6.3% yield for my Stocks and Shares ISA?

Royal Mail shares have sold off aggressively due to lower parcel volumes and higher-than-expected inflation. Time to add them to…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

3 cheap shares with dividend yields of up to 9%

These three cheap FTSE 250 shares all offer market-thrashing dividend yields of up to 8.7% a year. But which would…

Read more »

Twenty pound notes in back pocket of jeans
Investing Articles

3 passive income ideas I’m using today

Our writer shares three passive income ideas he's already using. They're dividend shares -- and he'd consider buying more of…

Read more »

Close-up of British bank notes
Investing Articles

Is now a good time to buy dividend shares?

As economic pressures increase, concerns are growing over dividend shares. Here's why I think it's right to buy now, not…

Read more »

Middle age senior woman sitting at the table at home working using computer laptop clueless and confused expression with arms and hands raised.
Investing Articles

Is now a good time to buy UK stocks?

Markets remain volatile but this Fool doesn't care. He's busy buying great UK stocks on the cheap.

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

A top-quality growth stock to buy on the dip

Growth stocks have sunk this year, with inflationary pressures being the primary reason. Here's one that looks unfairly beaten-down.

Read more »

Gold bullion on a chart
Investing Articles

How I’m protecting my portfolio from a stock market crash in 2022

I am investing in this asset class to protect my portfolio from high inflation, slower growth, or a stock market…

Read more »