When it comes to investing role models, it’s hard to do much better than Warren Buffett. With a net worth of $108bn, the Berkshire Hathaway (NYSE:BRK.B) CEO’s success speaks for itself.
As a result, there’s always a terrific interest in what the Oracle of Omaha is invested in. And there are quite a few that I think could be great investments at today’s prices.
Johnson & Johnson
Johnson & Johnson isn’t a big Buffett stock. Based on the most recent filing, the stock accounts for 0.02% of the Berkshire portfolio.
I think that there could be a really good opportunity here, though. The stock took a hit earlier this week as a court ruling in its asbestos lawsuits went against it.
In my view, the price decline is something of an overreaction. Even if the company ends up settling its lawsuits, it has cash put aside to deal with this.
Warren Buffett had terrific success with American Express shares by exploiting negative sentiment during a scandal. I’d look to do something similar by buying J&J shares now.
Verisign
I suspect that Verisign is a stock that many investors might not be familiar with. But it’s the kind of business that Buffett absolutely loves.
The company provides domain registry services for .com and .net websites. Importantly, this part of its business is protected by contract agreements giving it a monopoly.
Furthermore, those contracts renew automatically as long as Verisign maintains its end of the deal. This makes it highly predictable with an extremely good competitive position.
The stock isn’t cheap, at a P/E ratio of around 30. But it’s an under-the-radar stock that I think could reward a patient investor over time with less risk than other shares.
Kraft Heinz
Buffett’s fortunes with Kraft Heinz have been mixed since the company was formed in 2015. As a result, a lot of people think it’s a stock to avoid.
I think that they’re wrong. It’s certainly true that the company has had a patchy record, but I think this is due to mismanagement that is now well in the past.
Today, I see Kraft Heinz as a stable business that can produce solid profits going forward. And the company has been steadily strengthening its balance sheet by reducing its debt.
With a dividend yield of around 4%, I think that the stock is trading at a good price today. I think it’s one of the best stocks to buy in its sector.
Citigroup
Citigroup is a relatively new addition to the Berkshire portfolio. Buffett (or one of his investment managers) began adding shares of the bank at the start of 2022.
The company is currently restructuring to focus on its core strengths. These are a global commercial bank and a US-focused consumer bank.
I suspect that the restructuring process will take a while to complete. And I also think that it will prove expensive.
But at a price-to-book (P/B) ratio of 0.6, I think the stock is dirt cheap. I’d buy Citigroup shares today to hold for the next 10 years as the company becomes more efficient.
