Wal-Mart Stores, Inc. (WMT), Johnson & Johnson (JNJ): Buffett & Soros Are Bullish Here

One of Soros’s fund’s largest holdings was its 2.5 million shares of Johnson & Johnson (NYSE:JNJ); Berkshire had a smaller position in the company. While the drug manufacturer and personal products company is a bit high priced in terms of its trailing earnings, sales rose 9% in the second quarter of 2013 versus a year earlier (with net margins expanding as well) and with Wall Street analysts expecting growth to continue next year the forward P/E is 15. It should be noted that at current prices and dividend levels Johnson & Johnson (NYSE:JNJ) pays a dividend yield of 3%.

General Motors Company (NYSE:GM) was another common pick between the two billionaires’ investment firms. The sell-side considers the automaker to have high upside potential, with expectations for growth over the next several years resulting in a forward earnings multiple in the single digits and a five-year PEG ratio of 0.6. However, we’d note that revenue growth was fairly limited last quarter- although General Motors Company (NYSE:GM)’s auto sales numbers from July 2013 did show higher growth rates than either Ford or Chrysler- and that the company actually recorded a decline in profits.

A fifth common pick between both Buffett and Soros was DISH Network Corp. (NASDAQ:DISH). The company is valued at a considerable premium to DirecTV whether we consider earnings numbers (the forward P/E is 22) or cash flow (the trailing EV/EBITDA multiple is 8.6x). Revenue grew only 1% in DISH Network Corp. (NASDAQ:DISH)’s most recent quarter compared to the same period in the previous year, and in fact adjusted earnings per share numbers were negative- for each of the last few quarters adjusted EPS has come in below analyst expectations. As a result we would avoid the stock.

Disclosure: I own no shares of any stocks mentioned in this article.