Warren Buffett is the world’s greatest investor. Over the past five decades, he has earned hundreds of billions of dollars in profits for himself and his investors in the stock market.
I believe any of us can improve our process by following this legendary investor and CEO’s strategy. However, those of us in the UK may struggle to follow his approach. Buffett only really invests in the United States.
Although he has owned a handful of UK share in the past, the billionaire rarely reveals his investments outside the US unless he has to. This means that while we know Warren Buffett is open to investing in the UK, it’s difficult to tell what he’s buying and when he’s buying it.
But by looking at his past activity, I’ve put together a roadmap of the sort of UK shares he might buy today. I’m considering adding some of these stocks to my portfolio.
Warren Buffett’s UK shares
There are two companies, in particular, that stand out. First of all the supermarket retailer Tesco. This group has previously featured in the Oracle of Omaha’s investment portfolio. He bought into the stock originally because he liked the firm’s global brand recognition, strong management and large economies of scale.
Warren Buffett sold the stock a few years after he bought it following Tesco’s accounting scandals. He lost interest in the company and its management. However, over the past few years, Tesco has restructured its operations, and I think after these changes, the retailer could once again qualify for inclusion in his portfolio.
Another one of the UK shares the billionaire investor has been associated with in the past is consumer goods giant Unilever. Several years ago, it was reported that Kraft Heinz, which was backed by Buffett, was interested in buying the Anglo-Dutch giant. The deal never came to fruition, but I think it was a strong sign that the investor liked what he saw at Unilever.
Slow and steady
Warren Buffett owns a private water business in the north of England. This suggests that he may be interested in acquiring a public utility. There are a handful of these on the market he could be interested in, including United Utilities and Severn Trent.
These are not the most exciting UK shares. Nonetheless, I think they have all of the qualities Warren Buffett looks for an investment. These include a predictable income stream, strong cash generation and robust competitive advantage. The fact that the businessman already has an interest in the sector suggests that he knows it well. He could achieve economies of scale by combining existing operations.
That’s why I’m considering adding some of these stocks to my portfolio in the near future. Their defensive nature and Warren Buffett qualities could make them the perfect long-term investments, I feel.
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Rupert Hargreaves owns shares in Unilever. The Motley Fool UK has recommended Tesco and Unilever. 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.