5 Best Long-Term Stocks To Buy According To Warren Buffett

In this article, we discuss 5 best long-term stocks to buy according to Warren Buffett. If you want to see more stocks in this selection, check out 10 Best Long-Term Stocks To Buy According To Warren Buffett. 

5. The Kraft Heinz Company (NASDAQ:KHC)

Number of Hedge Fund Holders: 40

Berkshire’s Holding Period: 7 Years

Berkshire’s Stake Value: $13,256,593,441

The Kraft Heinz Company (NASDAQ:KHC) is a Pennsylvania-based manufacturer of food and beverage products in the United States, Canada, the United Kingdom, and internationally. Securities filings for Q4 2022 reveal that Warren Buffett owns 325.6 million shares of The Kraft Heinz Company (NASDAQ:KHC) worth $13.25 billion, representing 4.43% of the total 13F securities. Buffett has owned a position in the company consistently for the last 7 years. 

On February 15, The Kraft Heinz Company (NASDAQ:KHC) declared a quarterly dividend of $0.40 per share, in line with previous. The dividend is payable on March 31, to shareholders of record on March 10. 

Piper Sandler analyst Michael Lavery on February 13 raised the firm’s price target on The Kraft Heinz Company (NASDAQ:KHC) to $43 from $39 and maintained a Neutral rating on the shares. The analyst updated the model to reflect the company’s Q4 U.S. retail sales growth momentum.

According to Insider Monkey’s Q3 data, 40 hedge funds were bullish on The Kraft Heinz Company (NASDAQ:KHC), compared to 41 funds in the preceding quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with 6.6 million shares worth $220.6 million. 

4. American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 68

Berkshire’s Holding Period: 9 Years

Berkshire’s Stake Value: $22,400,480,926

American Express Company (NYSE:AXP) provides charge and credit payment card products, and travel-related services worldwide. The company operates through three segments – Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services. Warren Buffett has been a long-term position holder in the company, and as of Q4 2022, he owned a $22.4 billion stake in American Express Company (NYSE:AXP).  

On February 8, Betsy Graseck, an analyst at Morgan Stanley, upgraded American Express Company (NYSE:AXP) rating from Equal Weight to Overweight and raised the price target to $186. According to the analyst, the stock is the top pick in the consumer finance space. Morgan Stanley is focusing on stocks with higher credit quality, sustainable revenue growth, and positive operating leverage. 

According to Insider Monkey’s data, 68 hedge funds were bullish on American Express Company (NYSE:AXP) at the end of September 2022, compared to 67 funds in the last quarter. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:

“In financials, American Express Company (NYSE:AXP) has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”

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

Number of Hedge Fund Holders: 59

Berkshire’s Holding Period: 12 Years

Berkshire’s Stake Value: $25,444,000,000

Warren Buffett has been a long-term position holder in The Coca-Cola Company (NYSE:KO). In the fourth quarter of 2022, Buffett owned 400 million shares of The Coca-Cola Company (NYSE:KO) worth $25.4 billion, representing 8.5% of the total 13F holdings. Berkshire has had a stake in The Coca-Cola Company (NYSE:KO) for 12 years. 

On February 14, The Coca-Cola Company (NYSE:KO) reported a Q4 non-GAAP EPS of $0.45, in-line with estimates. Revenue for the quarter climbed 6.3% year-over-year to $10.1 billion, beating market consensus by $180 million. For FY 2023, the company expects to deliver organic revenue growth of 7% to 8%, versus an estimated growth of 3.59% year-over-year.

Morgan Stanley analyst Dara Mohsenian raised the price target on The Coca-Cola Company (NYSE:KO) to $70 from $68 and kept an Overweight rating on the shares on February 15. The analyst believes that Coke’s impressive 11% organic sales growth in Q4, measured in unit cases, demonstrates the company’s strong ability to set prices, limited demand sensitivity, and strong execution. Morgan Stanley still favors Coca-Cola, pointing to the company’s estimated 7%-8% organic sales growth in FY23 as evidence of a robust top-line expansion. Additionally, the stock is now priced similarly or at a lower level than other large-cap peers, the analyst told investors. 

According to Insider Monkey’s third quarter database, 59 hedge funds were bullish on The Coca-Cola Company (NYSE:KO), compared to 60 funds in the prior quarter. Ray Dalio’s Bridgewater Associates is a prominent stakeholder of the company, with 11.4 million shares worth $642.3 million. 

Rowan Street Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its Q4 2022 investor letter:

“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next year’s forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 97

Berkshire’s Holding Period: 5 Years

Berkshire’s Stake Value: $33,454,532,071

Bank of America Corporation (NYSE:BAC) provides banking and financial products to individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. Bank of America Corporation (NYSE:BAC) has featured in the Berkshire portfolio for the last 5 years. In Q4 2022, Buffett owned more than 1 billion shares of the company worth $33.45 billion. 

On February 1, Bank of America Corporation (NYSE:BAC) declared a quarterly dividend of $0.22 per share, in line with previous. The dividend is payable on March 31, to shareholders of record on March 3. 

Keefe Bruyette analyst David Konrad on February 8 downgraded Bank of America Corporation (NYSE:BAC) to Underperform from Market Perform with a price target of $33, down from $35.

According to Insider Monkey’s Q3 data, 97 hedge funds were long Bank of America Corporation (NYSE:BAC), compared to 99 funds in the prior quarter. Harris Associates is a significant position holder in the company, with 41.8 million shares worth $1.26 billion. 

Ariel Investment made the following comment about Bank of America Corporation (NYSE:BAC) in its Q3 2022 investor letter:

“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”

1. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 140

Berkshire’s Holding Period: 7 Years

Berkshire’s Stake Value: $116,305,043,218

Apple Inc. (NASDAQ:AAPL) is the largest position of Berkshire Hathaway, and the stock has consistently featured on the Buffett portfolio for 7 years. In Q4 2022, Buffett owned more than 895 million shares of the company worth $116.30 billion, representing 38.89% of the total 13F securities. In Q4, Buffett increased his stake in Apple Inc. (NASDAQ:AAPL) by 1%. 

On February 14, Brandon Nispel, an analyst at KeyBanc, maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) and set a $177 price target for the shares. The analyst believes that user growth is more important than short-term disruptions in sales volume. 

According to Insider Monkey’s Q3 data, Apple Inc. (NASDAQ:AAPL) was part of 140 hedge fund portfolios, compared to 128 in the last quarter. 

Here is what Distillate Capital has to say about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“The largest new purchase was Apple Inc. (NASDAQ:AAPL), which after underperforming saw its valuation improve significantly. Over the course of the last year, Apple’s consensus estimated forward free cash flows rose modestly, while its enterprise value fell by around 30%. Apple ranks below the 25th most attractive name in the portfolio and so its weight is capped at 4% vs. 6% for names in the top quartile.”

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