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Warren Buffett Sees Big Gains in These Small-Cap Stocks

In this article, we will discuss Warren Buffett Sees Big Gains in These Small-Cap Stocks. If you want to explore similar stocks, you can also take a look at Warren Buffett Sees Big Gains in These 5 Small-Cap Stocks.

With a net worth of about $120 billion, Warren Buffett is one of the most revered investors, as a good chunk of his wealth comes from investments in equity markets. He is best known as a value investor, constantly scanning for high-growth stocks with tremendous upside potential but trading at highly discounted levels. 

There is always a lot of interest in what Buffett says and does, given the success he has enjoyed with his investments through Berkshire Hathaway. The legendary investor did not become a master of the game overnight. He inherited the investing wisdom from his father, who was a US congressman and later on a stockbroker.

His family’s strong connections allowed him to raise significant funds to launch his career as an investor on Wall Street. Nevertheless, his ability to identify and stick to investing principles has affirmed his status as one of the greatest on Wall Street. Between 1965 and 2022, he averaged compound annual gains of 19.8%, outperforming the S&P 500 with average gains of 9.9%.

One of the things that makes Buffett stand out from other money managers is that he focuses on investing in businesses rather than stocks. While the focus is always on share prices and the rate at which they are likely to increase, Buffett focuses on the core business. The focus is always on how the business is going and how it is expected to perform in future.

Many believe Buffett only focuses on major, stable companies like Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META) and Microsoft Corporation (NASDAQ:MSFT). However, Buffett also pays attention to the small-cap companies given their tremendous room for growth as long as they are backed with solid underlying fundamentals. Buffett said at a shareholder meeting that if he were to start again with a small budget in the investing world, he’d pay more attention to small-cap companies.

“I probably would be focusing on smaller companies because I would be working with smaller sums and there’s more chance that something is overlooked in that arena,” Buffett said.

DaVita Inc. (NYSE:DVA), Paramount Global (NASDAQ:PARA) and Ally Financial Inc. (NYSE:ALLY) are some of the small-cap stocks with a market cap of less than $10 billion that Buffett remains heavily invested in.

Buffett’s investment philosophy of holding stocks for the long haul has been a key factor in his successful career. He has always insisted that one does not need to trade all the time, which explains why he invests in small-cap stocks and holds them for years to unlock value.

Our Methodology

We scanned Berkshire Hathaway’s 13F portfolio for the third quarter of 2023 and picked the fund’s small-cap stock picks.

Warren Buffett Sees Big Gains in These Small-Cap Stocks

10. Liberty Latin America Ltd. (NASDAQ:LILA)

Market capitalization as of November 24: $1.42 Billion

Year-to-date gain: -9%

Number of Hedge Fund Holders: 14

Liberty Latin America Ltd. (NASDAQ:LILA) is a communication services company that offers communication and entertainment services, including video broadband internet, fixed line, and mobile services. Liberty Latin America Ltd. (NASDAQ:LILA) also provides subsea telecommunication services.

Liberty Latin America Ltd. (NASDAQ:LILA) is the smallest company by market cap on Berkshire Hathaway’s portfolio, offering exposure in the communication service segment.

9. Atlanta Braves Holdings, Inc. (NASDAQ:BATRA)

Market capitalization as of November 24: $2.27 Billion

Year-to-date gain: 21%

Number of Hedge Fund Holders: 11

Atlanta Braves Holdings, Inc. (NASDAQ:BATRA), based in Englewood, Colorado, operates and owns the Atlanta Braves Major League Baseball Club. Atlanta Braves Holdings, Inc. (NASDAQ:BATRA) also operates mixed-use development projects, including retail, office hotels and entertainment projects.

Atlanta Braves Holdings, Inc. (NASDAQ:BATRA) is one of the latest additions to Warren Buffett’s portfolio. Berkshire Hathaway acquired stakes worth $7.9 million in the company in Q3 2023. Atlanta Braves Holdings, Inc. (NASDAQ:BATRA) is up 21% year to date.

8. Louisiana-Pacific Corporation (NYSE:LPX)

Market capitalization as of November 24: $4.42 Billion

Year-to-date gain: 3.3%

Number of Hedge Fund Holders: 38

Louisiana-Pacific Corporation (NYSE:LPX) is a small-cap industrial company that provides solutions for use in new home construction, repair and re-modelling, and outdoor structures. Louisiana-Pacific Corporation (NYSE:LPX) offers LP SmartSide trim and siding products, LP SmartSide Expert Finish trim and siding products, and LP Builder Series lap siding products.

While Louisiana-Pacific Corporation (NYSE:LPX) has struggled with slowing demand for building products and choppy pricing, it has remained resilient, going by the 3.3% year-to-date gain. Buffett took an interest in the small-cap stock in Q3 2022 and has seen this investment gain by 10%. 

7. StoneCo Ltd. (NASDAQ:STNE)

Market capitalization as of November 24: $4.44 Billion

Year-to-date gain: 67%

Number of Hedge Fund Holders: 32

StoneCo Ltd. (NASDAQ:STNE) is one of Warren Buffett’s small-cap technology sector investment plays. The company provides financial technology and software solutions to merchants and integrated partners for conducting electronic commerce in-store, online, and mobile channels.

StoneCo Ltd. (NASDAQ:STNE) has become one of Buffett’s top small-cap picks, going by the 67% year-to-date gain. 

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

Market capitalization as of November 24: $7.35 Billion

Year-to-date gain: 5.4%

Number of Hedge Fund Holders: 34

Jefferies Financial Group Inc. (NYSE:JEF) is another of Buffett’s small-cap plays in the financial services sector. The company engages in investment banking, capital markets, and asset management. Jefferies Financial Group Inc. (NYSE:JEF) provides banking advisory services for mergers or acquisitions, restructuring, or recapitalization. It also provides customers with investment-grade corporate bond sales and trading.

Jefferies Financial Group Inc. (NYSE:JEF) is up by about 5.4% for the year, as the financial service sector benefits from the high-interest rate environment. 

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Disclosure: None. Warren Buffett Sees Big Gains in These Small-Cap Stocks is originally published on Insider Monkey.

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

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

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

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

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?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

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.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

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As an investor, you want to be on the side of the winners, and AI is the winning ticket.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…