International Business Machines Corp. (IBM), Wells Fargo & Co (WFC): Billionaire Warren Buffett’s Top Stocks

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Buffett had American Express Company (NYSE:AXP) as his fourth-largest holding, accounting for 12% of Berkshire Hathaway Inc. (NYSE:BRK.B)’s portfolio. With a stable economy comes increased spending, namely credit-card spending, for consumers and businesses. Why is this good for American Express? More than 50% of revenue is from from card spending. American Express is trading at 15.8 times forward earnings, which is more than a 20% discount to the industry average. The other attractive feature of American Express Company (NYSE:AXP) is its 20%-plus return on equity.

The Procter & Gamble Company (NYSE:PG) made up 4.8% of the Berkshire portfolio and was its fifth-largest holding. This is of course one of fellow billionaire Bill Ackman’s top activist campaigns. Ackman has more than 20% of his portfolio invested in P&G and he believes the upside could be upwards of 60% (check out Ackman’s other top picks).

Don’t be fooled
Billionaire Warren Buffett is one of the great value investors of our time. He is heavily invested in some mega-cap stocks that he believes will create long-term value for investors. What’s more is that they all pay a dividend yield of at least 1.2%.


Wells Fargo & Co (NYSE:WFC) remains one of the best-positioned banks, while I think The Coca-Cola Company (NYSE:KO) can grow nicely with its international efforts. International Business Machines Corp. (NYSE:IBM) should see robust growth on the back of increased IT spending, but I would wait to jump into the stock as it appears to be fairly valued for the time being. American Express weathered the financial crisis nicely and should perform nicely as credit-related spending increases. As for the turnaround story that’s taking place at The Procter & Gamble Company (NYSE:PG), I am encouraged by the departure of McDonald as CEO and the succession plan the company introduced last week.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends American Express, Coca-Cola, and Wells Fargo. The Motley Fool owns shares of International Business Machines. and Wells Fargo. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Billionaire Warren Buffett’s Top Stocks originally appeared on Fool.com and is written by Marshall Hargrave.

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