Should You invest in Warren Buffett’s Top Stocks? – American Express Company (AXP), International Business Machines Corp. (IBM), Wells Fargo & Co. (WFC)

Page 1 of 2

I have been writing a lot about Warren Buffett. That said, he recently gave us all plenty of material to talk about and, after all, he is the greatest investor in modern history. His recently released letter to Berkshire Hathaway‘s shareholders tell us a lot about his investment style and what he is expecting for the future. Besides, the letter is a fast and great way to learn about his investment achievements.The letter reads: “Over the last 48 years (that is, since present management took over), book value has grown from $19 to $114,214, a rate of 19.7% compounded annually.” That is what I would call great proven performance!

American Express Company (NYSE:AXP)It is easy to grasp how proud he is about his biggest public investment positions. They are all very well managed companies that, through their durable business motto (competitive advantages), have helped the sage of Omaha accumulate billions over the years. Most importantly to you and I, Buffett expects his main investments to continue delivering great results going forward.

Berkshire’s “Big Four” public investments are: American Express Company (NYSE:AXP), International Business Machines Corp. (NYSE:IBM), The Coca-Cola Company (NYSE:KO) and Wells Fargo & Co. (NYSE:WFC). As he admitted in his letter, Berkshire’s ownership interests in all four companies are likely to increase in the future. He not only does not plan to sell any shares, but also he will always consider buying more if Mr. Market offers a good enough entry price. As a matter of fact, Berkshire purchased additional shares of Wells Fargo & Co. (NYSE:WFC) increasing its stake to 8.7% from 7.6% (that the company had accumulated at the end of 2011). It also bought additional shares of International Business Machines Corp. (NYSE:IBM) Increasing its stake from 5.5% to 6%. At Coca-Cola and American Express Company (NYSE:AXP) share repurchases made Berkshire’s stake grow to 8.8% and 13.7% respectively. Let’s do a recap on each of those “Big Four” and see if they could be good candidates for your own personal portfolio at current market prices.

American Express Company (NYSE:AXP)

The company has a wonderful business model that offers low risk growth all across emerging markets and a sustainable cash flow stream in the US. American Express Company (NYSE:AXP) grows revenue at a very steady 5% year-over-year rate offering an also very stable14% net income margin. Selling at a 2013 13.5 P/E, the company seems cheap given the amazing quality of its clients and the sustainability of the cash flows the company offers to shareholders. American Express Company (NYSE:AXP) pays a small 1.24% cash dividend yield, but it is growing it fast at a 11% year-over-year rate.

International Business Machines Corp. (NYSE:IBM)

International Business Machines Corp. (NYSE:IBM) is the latest addition to Buffett’s “Big Four” list. When I saw on the news that Berkshire had made a big investment in International Business Machines Corp. (NYSE:IBM), I started my research on the company. International Business Machines Corp. (NYSE:IBM) built amazing corporate relationships through offering the highest service quality when providing Information Technology solutions. Let’s put it like this: If you are the CIO of any big company and you hire International Business Machines Corp. (NYSE:IBM) you know you will not be fired. International Business Machines Corp. (NYSE:IBM) trades at a 2013 12.5 P/E and is growing its 1.6% dividend at a 13% year-over-year rate.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!