Warren Buffett is generally regarded as the greatest stock market investor of all time. So I tend to keep an eye on his investment portfolio.
Recently, I was looking through his portfolio for investment ideas. With that in mind, here’s a look at three Buffett stocks I’d be happy to buy for my Stocks and Shares ISA today.
Let’s start with Apple (NASDAQ: AAPL). This is Buffett’s largest holding.
Apple’s results for the year ended 30 September 2021, posted last week, showed that the company continues to grow at a healthy rate. For the year, total net sales came in at $365.8m, up from $274.5m a year earlier. To my mind, that’s a very impressive level of growth given the company’s size ($2.5trn).
Looking ahead, I see potential for further growth here. In the near term, many consumers are likely to upgrade their iPhones to 5G handsets. Meanwhile, in the long run, the company should benefit from its move into high-growth industries such as healthcare and payments.
There are risks here, of course. One is the fact that regulators are looking closely at App Store profits. Future regulatory action could slow growth.
All things considered, however, I think the stock has a lot of appeal right now. The forward-looking P/E ratio is about 26, which is a bargain, to my mind.
Another Buffett stock I like the look of right now is Mastercard (NYSE: MA). It’s one of the world’s largest payments companies.
Mastercard was significantly impacted by the coronavirus due to the fact a large chunk of its revenue comes from ‘cross-border’ transactions (that is, travel spending). With no one travelling last year, revenues took a big hit.
However, with travel now picking up, revenues are rising. In the third quarter of 2021, for example, net revenue came in at $5bn, up 32% year-on-year. Looking ahead, I think revenues are likely to keep rising. That’s because the world is rapidly moving away from cash and shifting towards electronic payments.
A risk it faces is competition. The financial technology industry is highly competitive and Mastercard faces competition from a wide range of companies including Visa, PayPal, and Affirm.
I’m backing the company to win in the long run, however. And with the stock trading at around 30 times next year’s earnings, I’m a buyer.
Finally, I’d also buy Amazon (NASDAQ: AMZN) for my Stocks and Shares ISA.
Amazon shares have pulled back a little since the company posted its Q3 results last week. This is due to the fact that earnings were down ($6.12 per share versus $12.37 in Q3 2020) due to higher costs.
I’m not particularly concerned by this earnings weakness, however. Total net sales were up 15% to $110.8bn for the period which is pretty impressive for a company worth $1.7trn. Meanwhile, revenue in the company’s cloud computing division (which I see as the real growth driver here) was up 39% to $16.1bn. These figures lead me to believe that the long-term growth story is still intact.
It’s worth noting that Amazon has a high valuation. Currently, the stock has a forward-looking P/E ratio of about 53. This adds risk to the investment case.
I’m comfortable with this valuation, however. This company is an absolute powerhouse and I expect it to get a lot bigger in the years ahead.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns shares of Amazon, Apple, Mastercard, PayPal Holdings, and Visa. The Motley Fool UK has recommended Amazon, Apple, Mastercard, and 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.