In this piece, we’ll take a look at the 5 Best Value Stocks To Buy According To Warren Buffett. For more stocks, the risk/reward, and the methodology of this list, head on to the 10 Best Value Stocks To Buy According To Warren Buffett.
5. American Express Company (NYSE:AXP)
Berkshire Hathaway Stake: $21,016,276,000
Percentage of Berkshire Hathaway’s Portfolio: 7%
Number of Hedge Fund Holders: 67
Founded in 1850 and headquartered in New York, American Express Company (NYSE:AXP) is a provider of financial and travel services. Its key offerings include credit cards, charge cards, co-branded credit cards, and personal and corporate travel planning services. The company holds several strategic partnerships with airlines, banks, restaurants, hotels, retailers, entertainment venues, and digital players such as Apple and Google. Berkshire Hathaway kept its stake in American Express Company (NYSE:AXP) unchanged during the second quarter, and the fund had an investment value of over $12.4 billion in the company at the end of Q2 2022.
On October 24, 2022, James Fotheringham, an analyst at BMO Capital, increased his price target on American Express Company (NYSE:AXP) to $166 after the company posted a strong result for Q3 2022, beating market expectations. The analyst keeps a Market Perform rating on the stock and, in a research note, stated that the company has remained immune to the negative consequences of the current rate hikes.
At the end of the quarter ending June 2022, Berkshire Hathaway was the most bullish on American Express Company (NYSE:AXP), with a holding of 151,610,700 shares of the company. As per Insider’s Monkey database, 67 hedge funds owned stakes in American Express Company (NYSE:AXP) at the end of Q2 2022.
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.
4. Chevron Corporation (NYSE:CVX)
Berkshire Hathaway Stake: $23,373,304,000
Percentage of Berkshire Hathaway’s Portfolio: 7.78%
Number of Hedge Fund Holders: 59
Chevron Corporation (NYSE:CVX) is based in San Ramon, California, with a presence across 180 countries. It is involved in the exploration, production, refining, upstream activities concerning energy resources, manufacturing and sales of chemicals, and power generation. The company has investments in low-carbon technologies allowing for commercial solutions for the energy sector. Warren Buffett increased his stake in Chevron Corporation (NYSE:CVX) by 2% during Q2 2022. Berkshire Hathaway owned 161,440,149 shares of the company at the end of the quarter.
Chevron Corporation (NYSE:CVX) stock has performed well in 2022 despite the downturn in the market and has given a return of 45.1% YTD as of October 25, 2022, as compared with the S&P 500’s decline of 20.8%.
On October 19, 2022, Lloyd Byrne, an analyst at Jefferies, started his coverage of Chevron Corporation (NYSE:CVX) with a Hold rating and a price target of $171. The analyst believes that energy’s “Option Value” can stay at elevated levels for a longer period which will drive upside in the stock price.
In its Q1 2022 investor letter, ClearBridge Investments shared its outlook on Chevron Corporation (NYSE:CVX). Here’s what the firm said:
The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.
3. The Coca-Cola Company (NYSE:KO)
Berkshire Hathaway Stake: $25,164,000,000
Percentage of Berkshire Hathaway’s Portfolio: 8.38%
Number of Hedge Fund Holders: 60
Founded in 1892, The Coca-Cola Company (NYSE:KO) is a beverage manufacturer with a brand portfolio of 200 brands of soft drinks, coffee, teas, and water across more than 200 countries and regions. Berkshire Hathaway’s holding of The Coca-Cola Company (NYSE:KO) remained unchanged during the second quarter of 2022, and the fund had an investment value of approximately $25 billion in the company at the end of Q2 2022.
On October 10, 2022, Gerald Pascarelli, an analyst at Wedbush, initiated coverage of The Coca-Cola Company (NYSE:KO) with a price target of $63 and an Outperform rating. The analyst’s liking for the company is based on the fact that it is the market leader in the soft drinks category and exudes high pricing power, which will protect it from inflationary headwinds.
At the end of Q2 2022, Berkshire Hathaway came out to be the fund with the largest holding in the company. The fund owned 400,000,000 shares of The Coca-Cola Company (NYSE:KO) with an investment value of over $25 billion in the company. As per Insider’s Monkey database, 60 hedge funds owned stakes in The Coca-Cola Company (NYSE:KO) at the end of the second quarter.
Aristotle Capital Management, LLC mentioned The Coca-Cola Company (NYSE:KO) in its Q2 2022 investor letter. Here is what the firm has to say:
The Coca-Cola Company (NYSE:KO), the global beverage business, was a leading contributor for the period. Coca-Cola continues to benefit from the refranchising of its bottling operations and realignment of incentives, catalysts we previously identified. These initiatives are demonstrating their strength in an inflationary and supply-chain-challenged environment. Additionally, the company has focused on evolving its customer engagement practices by leveraging digital and social medias for targeted campaigns, such as the design and launch of Coke Byte in the metaverse. Lastly, Coca-Cola has furthered its transformation into a total beverage company, as it debuted its new Jack Daniel’s Tennessee Whiskey and Coca-Cola ready-to-drink premixed cocktail. Although uncertainties surrounding cost pressures, lockdowns and geopolitical conflicts remain, we believe Coca-Cola is uniquely positioned to successfully continue its transition toward a total beverage business.
2. Bank of America Corporation (NYSE:BAC)
Berkshire Hathaway Stake: $31,444,432,000
Percentage of Berkshire Hathaway’s Portfolio: 10.47%
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) is a leading global wealth management company serving a consumer base of approximately 67 million consumer and small business relationships in the U.S. It offers a complete range of banking and is the 2nd largest bank in the U.S, holding $1.4 trillion in consumer deposits and 55 million verified digital users. Warren Buffett did not make any changes to his holding of Bank of America Corporation (NYSE:BAC) stock during Q2 2022. The bank’s stock comprised 10.47% of the fund’s portfolio at the end of the quarter.
The bank had a good Q3 2022 and recently announced its Q3 2022 results posting revenue of $24.5 billion, beating market estimates by $1.04 billion. Bank of America Corporation (NYSE:BAC) posted a normalized EPS for the quarter of $0.81, beating market consensus estimates by $0.03.
As per Insider’s Monkey database, 99 hedge funds had stakes in Bank of America Corporation (NYSE:BAC) at the end of the June quarter. Berkshire Hathaway was the most bullish fund on the company’s stock, with a total holding of 1,010,100,606 company stocks at the end of Q2 2022.
Here’s what ClearBridge Investments said about Bank of America Corporation (NYSE:BAC) in its Q2 2022 investor letter:
In the second quarter we made a sizable add to our position in Bank of America (NYSE:BAC) as our bank holdings have significant leverage to rising interest rates. The Fed, unfortunately, was late to realize inflation’s magnitude, maintaining for far too long that inflationary pressures were merely transitory. This mistake caused inflation to accelerate, necessitating a larger intervention than if the Fed had moved sooner.
1. Apple Inc. (NASDAQ:AAPL)
Berkshire Hathaway Stake: $122,337,373,000
Percentage of Berkshire Hathaway’s Portfolio: 40.76%
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) is an American multinational company operating in the consumer electronics business and engaged in the designing, manufacturing, marketing, and selling of smartphones, personal computers, phone accessories, and tablets. The company has its headquarters in Cupertino, California, with a global employee base of 154,000 individuals. Warren Buffett increased his holding of Apple Inc. (NASDAQ:AAPL) by 1% during Q2 2022, and at the end of the quarter, his investment value in the company amounted to over $122 billion.
On October 17, 2022, Erik Woodring, an analyst at Morgan Stanley, reduced his price target on Apple Inc. (NASDAQ:AAPL) to $177. The analyst currently has an Overweight rating on the stock but believes that valuation multiples for consumer stocks can reach trough levels which will cause some price downside. The analyst believes that Apple Inc. (NASDAQ:AAPL) is a quality stock and will come out of the current challenging environment unscathed.
At the end of the quarter ending June 2022, Berkshire Hathaway was the leading holder of the company’s stock, with a holding of 894,802,319 shares. As per Insider’s Monkey database, 128 hedge funds owned stakes in Apple Inc. (NASDAQ:AAPL) at the end of Q2 2022.
Wedgewood Partners mentioned Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter. Here is what the firm has to say:
Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.
You can also take a look at 10 Best Used Car Stocks To Buy Now and 5 Best REIT Stocks to Buy Right Now.
