Warren Buffett’s Top Small-Cap Picks Include USG Corporation (USG), NOW Inc (DNOW), and Media General Inc (MEG)

Buffett owns 4.65 million shares of Media General Inc (NYSE:MEG) valued at $76.62 million. The multimedia company has a market cap of $2.16 billion and its shares trade at $16.60 with a P/E ratio of 37.49. Media General Inc is the second-largest local broadcaster in the United States, operating 71 stations in 48 different markets. Media General Inc (NYSE:MEG) acquired Young Broadcasting and LIN Media in the last two years. According to David Cohen of Midwood Capital Management, these acquisitions could help the company’s stock to rise another 50% over the next two years. Media General Inc (NYSE:MEG) reported weak financial results in the first quarter with a net loss of $7.4 million against a profit of $5.38 million year-over-year. Investment managers with substantial stakes in the multimedia company include Highland Capital Management and Mario Gabelli‘s mutual fund GAMCO Investors.

NOW Inc (NYSE:DNOW) ranks as the number three small-cap stock in the equity portfolio of Buffett, with the position housing 1.83 million shares valued at $39.51 million. The oil and gas distributor has a market cap of $2.56 billion and currently trades at $24.93. Again, the P/E ratio for NOW Inc (NYSE:DNOW) is rather high, at 39.80. Just like other energy companies, NOW Inc (NYSE:DNOW) reported weaker-than-expected first quarter financial results. The global oil distributor company reported revenue of $863 million, which is 20% lower than the prior year quarter. At the same time, its profits came short of market expectations also, as the company reported a net loss of $10 million or $0.09 per share against estimates of a $0.06 loss per share. William B. Gray‘s Orbis Investment Management and First Eagle Investment Management are among the major investors of NOW Inc (NYSE:DNOW).

Disclosure: None