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13 Cheap Value Stocks To Buy According To Warren Buffett

In this piece, we will take a look at the 13 cheap value stocks to buy according to Warren Buffett. If you want to skip our introduction to the most successful investor of our age and recent stock market indicators, then take a look at the 5 Cheap Value Stocks To Buy According To Warren Buffett.

Warren Buffett is one of the richest people in the world, and the only finance professional who is part of the coveted centi-billionaire club. Billionaires with a net worth greater than $100 billion are typically industry tycoons who have amassed their wealth by building big businesses that target fashion, technology, electric vehicles, social media, retail, or other lucrative industries.

On the flip side, the finance and investing world is typically dominated by either big banks such as JPMorgan Chase & Co. (NYSE:JPM) and The Goldman Sachs Group, Inc. (NYSE:GS), or hedge funds such as Ken Fisher’s Fisher Investments or Ken Griffin’s Citadel Group. Since big banks were formed years ago, their founders are now dead and therefore cannot benefit from a centi-billionaire status through their shareholdings. Similarly, while big hedge fund bosses see their firms rake in billions of dollars each year, their profits cannot scale to the level of say Apple, Inc. (NASDAQ:AAPL), and the structure of most hedge funds, even those that are publicly traded, prevents behemoth valuations to make their owners ultra, ultra rich. If you’re interested in knowing how much money hedge funds make, you can check out 20 Highest Paid Hedge Fund Managers of All Time.

Warren Buffet, therefore, is an outlier. This is because his firm, Berkshire Hathaway, is not structured like a hedge fund. Instead, Berkshire is an investment holding company that dabbles in both public and private businesses. Its investment strategy, which sees Berkshire either outright buy most businesses or selectively take large stakes in mostly dividend paying firms, allows its revenue to match big tech giants more instead of hedge funds. This is because by buying businesses, Berkshire is entitled to a slice of their profits, and no matter how many big bets Ken Griffin makes on the stock market, revenue from a well oiled large business like the ones Mr. Buffett invests in is likely to surpass a hedge funds income from fund fee and returns.

Digging deeper, Berkshire’s income statement for the third quarter of this year shows that during the quarter, the firm raked in a cool $93.2 billion in revenue. Within these sales figures, a mere $4 billion came from interest, dividends, and other financial activities. Instead, the majority of Berkshire Hathaway’s third quarter revenue came from its insurance business and its freight, utility, and energy operations.

Yet, despite the fact that Mr. Buffett’s firm earns most of its money through business activities rather than making trades like hedge funds, he is still thought to be the greatest investor of our time. Considering this, one might wonder, what makes Warren Buffett the Oracle of Omaha? The answer is quite simple really. Mr. Buffet has somehow nearly perfected the art of picking out a select few companies that are able to post remarkable share price growth and pay dividends out of the thousands that trade on the stock market. To see how the Oracle thinks differently, consider the shares of The Coca-Cola Company (NYSE:KO). Warren Buffett bought the shares in 1998, and what else was happening back then? It was the dot com era when most people were buying attractive technology stocks. But the Oracle was buying the shares of a sugary beverage firm, and while the bubble popped, Mr. Buffett became one of the richest people in the world.

At the heart of his investing approach is what is dubbed Value Investing. Simply put, this involves an investor determining the fair value of a stock and then comparing it to the market price to see if it’s higher. If it is, then a buying decision is made based on the potential of the share price falling. Since the fair value of these stocks is higher than the market value, they often have low P/E ratios as well.

Today, we’ll take a look at some cheap value stocks to buy according to Warren Buffett. Some top picks are Liberty Latin America Ltd. (NASDAQ:LILA), Sirius XM Holdings Inc. (NASDAQ:SIRI), and StoneCo Ltd. (NASDAQ:STNE).

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Our Methodology

To compile our list of the cheap value stocks to buy according to Warren Buffett, we first ranked all of his firm’s third quarter stock holdings by their price to trailing earnings ratio. Then, the top 30 stocks were ranked by their share price to pick out Warren Buffett’s best cheap value stock buys.

 Cheap Value Stocks To Buy According To Warren Buffett

13. Occidental Petroleum Corporation (NYSE:OXY)

Berkshire Hathaway’s Q3 2023 Investment Value: $14.5 billion

Latest P/E Ratio: 13.12

Latest Share Price: $60.16

Occidental Petroleum Corporation (NYSE:OXY) is an American oil and gas exploration and production firm headquartered in Houston, Texas. The firm’s third quarter of 2023 earnings report saw it beat analyst EPS estimates of $1 by posting $1.18 for the metric on the back of higher output.

As of Q3 2023 end, 75 out of the 910 hedge funds profiled by Insider Monkey had bought and owned Occidental Petroleum Corporation (NYSE:OXY)’s shares. The firm’s biggest shareholder in our database is Warren Buffett’s Berkshire Hathaway as it owns $14.5 billion worth of shares.

Along with Sirius XM Holdings Inc. (NASDAQ:SIRI), Liberty Latin America Ltd. (NASDAQ:LILA), and StoneCo Ltd. (NASDAQ:STNE), Occidental Petroleum Corporation (NYSE:OXY) is a top cheap stock that Warren Buffett is piling into.

12. The Coca-Cola Company (NYSE:KO)

Berkshire Hathaway’s Q3 2023 Investment Value: $22.3 billion

Latest P/E Ratio: 23.65

Latest Share Price: $58.57

The Coca-Cola Company (NYSE:KO) is a carbonated beverage company that is one of the largest of its kind in the world. It’s also one of Warren Buffett’s oldest stock picks, as he made his firm major purchase in 1998.

During September 2023, 57 out of the 910 hedge funds surveyed by Insider Monkey had invested in the company. Warren Buffett’s Berkshire Hathaway is its largest shareholder through its $22.3 billion investment.

11. Citigroup Inc. (NYSE:C)

Berkshire Hathaway’s Q3 2023 Investment Value: $2.27 billion

Latest P/E Ratio: 7.15

Latest Share Price: $45.23

Citigroup Inc. (NYSE:C) is an American bank headquartered in New York City. Media reports suggest that the bank is interested in expanding its presence in the private credit market, to follow other giants such as Barclays and Wells Fargo.

After sifting through 910 hedge fund holdings for their shareholdings during this year’s third quarter, Insider Monkey discovered that 79 were Citigroup Inc. (NYSE:C)’s shareholders. Out of these, the biggest investor was Berkshire Hathaway since it owned $2.2 billion worth of shares.

10. The Kroger Co. (NYSE:KR)

Berkshire Hathaway’s Q3 2023 Investment Value: $2.23 billion

Latest P/E Ratio: 19.56

Latest Share Price: $44.18

The Kroger Co. (NYSE:KR) is an American grocery retailer headquartered in Cincinnati, Ohio. The firm has beaten analyst EPS estimates in all four of its latest quarters and the shares are rated Buy on average with an average share price target of $50.16.

Insider Monkey dug through 910 hedge fund portfolios for 2023’s September quarter to find out that 41 had bought the retailer’s shares. The Kroger Co. (NYSE:KR)’s largest hedge fund stakeholder is Warren Buffett’s Berkshire Hathaway due to its $2.2 billion stake.

9. Jefferies Financial Group Inc. (NYSE:JEF)

Berkshire Hathaway’s Q3 2023 Investment Value: $15.8 million

Latest P/E Ratio: 24.93

Latest Share Price: $35.04

Jefferies Financial Group Inc. (NYSE:JEF) is an investment banking and asset management company headquartered in New York City. Like Citigroup, it is also targeting the private credit industry and raised $2.1 billion for this in November 2023.

During September 2023, 34 out of the 910 hedge funds polled by Insider Monkey had bought and owned Jefferies Financial Group Inc. (NYSE:JEF)’s shares. Out of these, the biggest investor was Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC as it owned 5.4 million shares that are worth $198 million.

8. The Kraft Heinz Company (NASDAQ:KHC)

Berkshire Hathaway’s Q3 2023 Investment Value: $10.9 billion

Latest P/E Ratio: 14.33

Latest Share Price: $34.94

The Kraft Heinz Company (NASDAQ:KHC) is a well known food brand that was set up in 1869. The firm’s investors were in for some great news in November 2023 after Bernstein upgraded its share price target to $40 and also upgraded the rating to Outperform from Perform.

For their shareholdings during this year’s third quarter, 40 out of the 910 hedge funds surveyed by Insider Monkey had held a stake in the firm. The Kraft Heinz Company (NASDAQ:KHC)’s largest hedge fund shareholder is Warren Buffett’s Berkshire Hathaway due to its $10.9 billion investment.

7. Bank of America Corporation (NYSE:BAC)

Berkshire Hathaway’s Q3 2023 Investment Value: $28.2 billion

Latest P/E Ratio: 8.3

Latest Share Price: $29.73

Bank of America Corporation (NYSE:BAC) is one of the biggest banks in America which is headquartered in Charlotte, North Carolina. The firm was out with some good news for its investors like Warren Buffett in November when it increased its dividend to 24 cents.

For their September quarter of 2023 investments, 88 out of the 910 hedge funds tracked by Insider Monkey were Bank of America Corporation (NYSE:BAC)’s investors. Berkshire Hathaway owned the biggest stake among these which was worth $28.2 billion.

6. HP Inc. (NYSE:HPQ)

Berkshire Hathaway’s Q3 2023 Investment Value: $2.6 billion

Latest P/E Ratio: 12.3

Latest Share Price: $28.64

HP Inc. (NYSE:HPQ) is a personal computing products and services provider headquartered in Palo Alto, California. The firm’s third quarter of 2023 revenue dropped by 6.5% to $13.2 billion as the slowdown in the personal computing market continued.

44 out of the 910 hedge funds part of Insider Monkey’s Q3 2023 database had bought and owned the firm’s shares. HP Inc. (NYSE:HPQ)’s largest hedge fund investor is Warren Buffett’s Berkshire Hathaway courtesy of its $2.6 billion stake.

Liberty Latin America Ltd. (NASDAQ:LILA), HP Inc. (NYSE:HPQ), Sirius XM Holdings Inc. (NASDAQ:SIRI), and StoneCo Ltd. (NASDAQ:STNE) are some cheap value stocks in Warren Buffett’s portfolio.

Click here to continue reading and check out 5 Cheap Value Stocks To Buy According To Warren Buffett.

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Disclosure: None. 13 Cheap Value Stocks To Buy According To Warren Buffett is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

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AI is eating the world—and the machines behind it are ravenous.

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Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

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Elon Musk was even more blunt:

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As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
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Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

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The Hedge Fund Secret That’s Starting to Leak Out

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A New Dawn is Coming to U.S. Stocks

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Should I put my money in Artificial Intelligence?

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Click to continue reading…