You don’t make a fortune from investing if you don’t have some seriously sound strategies to call upon. It’s why I listen very carefully whenever super-rich investment gurus like Warren Buffett, Nick Train and Terry Smith pipe up. They can help me find the best stocks to buy and make terrific returns in the process.
I don’t need to buy the exact-same stocks that say Buffett’s bought through his company Berkshire Hathaway. I can take his sage advice and, as an example, take his game plan to try and find the best UK shares.
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.
Here are what I consider to be some of the best Buffett-style stocks for me to buy right now. Both trade on the FTSE 100.
A fine FTSE 100 value stock
Buying shares undervalued by the market is one of the cornerstones of Buffett’s investing strategy. This can be reflected by a low earnings multiple, for example, or a sudden share price fall that can allow an investor to buy a company at a decent discount.
Royal Mail (LSE: RMG) is one Buffett-style stock I think falls firmly into this category. Britain’s oldest courier is highly exposed to broader economic conditions. And, as a result, it’s fallen almost 20% in value during the past month as concerns over the UK economy have grown. What’s more, the Royal Mail share price currently commands a rock-bottom forward P/E ratio of just 7 times.
Royal Mail may well suffer if the economy grinds to a halt. But as a long-term investor I think Royal Mail’s recent share price fall provides a great dip-buying opportunity. It’s in the box seat to ride the e-commerce revolution as parcel volumes boom. It also has a significant and growing international presence through its GLS division. This provides it with glorious growth opportunities as well as added strength via geographic diversification. I’d buy.
Another Buffett-style stock to buy
Buffett’s also a big fan of what is known as an ‘economic moat’. In layman’s terms, this refers to an advantage a company has to help it see off threats from rivals and protect its long-term profits.
I think Unilever (LSE: ULVR) is one of the best stocks to buy on this front. Indeed, it’s why I own it in my personal investment portfolio. Few other fast-moving consumer goods producers can match the brand power of the products Unilever makes. Goods like Dove soap, Domestos bleach and Ben & Jerry’s ice cream are all leaders in their field.
And the company has a plethora of labels like these to call on. This allows Unilever to maintain market-beating profit margins by successfully passing on costs to customers when raw material inflation hits.
Whether this will be enough to help the group grow profits during this period of rampant factory price rises however, only time will tell. But I’d bet my bottom dollar that the FTSE 100 firm will fare better than the broader market in the current inflationary environment. This is why I plan to hold this Buffett-like stock forever.