5 Warren Buffett Stocks to Fortify Your Investment Portfolio – The Smart Investor




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It can be instructive to study the investment portfolios of expert investors to uncover potential gems.
More so when the investor in question is none other than Warren Buffett.
Known as the “Oracle of Omaha”, Buffett has earned himself a reputation for savvy investments that have stood the test of time.
He also has a keen eye for sturdy businesses and is known for his canny investment choices.
We can take a peek at what he owns through the mandatory filings submitted by his investment vehicle Berkshire Hathaway Inc (NYSE: BRK.B).
Here are five stocks owned by Buffett that can ensure your investment portfolio remains resilient.
Apple needs no introduction, being the largest company in the world with a market capitalisation of US$2.4 trillion.
The technology giant is showing no signs of slowing down as it reported a stellar set of earnings for its fiscal 2022’s second quarter (2Q2022).
Revenue increased by 9% year on year to US$97.3 billion, a record for its March quarter.
Operating profit rose 9% year on year to US$30 billion while net profit inched up 5.8% year on year to US$25 billion.
Of note, Services revenue has hit an all-time quarterly high at US$19.8 billion, up 17.3% year on year, and constitutes one-fifth of Apple’s total sales.
Free cash flow for the first six months of FY2022 stood healthy at US$69.8 billion, and the company also declared a quarterly dividend of US$0.23 per share, up 5% year on year.
Coca-Cola is the world’s largest non-alcoholic beverage company, with its products sold in more than 200 countries.
The beverage giant continued to post steady growth, chalking up a 17% year on year increase in revenue for fiscal 2021 (FY2021).
Net profit climbed 26% year on year and Coca-Cola generated a free cash flow of US$11.3 billion.
The momentum has carried over into the first quarter of FY2022, with revenue rising 16% year on year to US$10.5 billion and net profit climbing 24% year on year to US$2.8 billion.
Global unit case volume also grew 8% year on year, a testament to the brand’s continued strength.
Coca-Cola is also well-known for its long track record of dividend payments. It recently raised its quarterly dividend to US$0.44 per share, its 60th consecutive annual dividend increase.
Kraft Heinz is a food and beverage company that owns famous global brands such as Kraft, Heinz, Kool-Aid, Quero, and Oscar Mayer.
The company reported a sturdy set of earnings for 1Q2022, with organic net sales up 6.8% year on year.
Net income increased from US$563 million to US$776 million due to lower selling expenses and the absence of impairment losses.
The company generated US$300 million of free cash flow for 1Q2022.
Kraft Heinz continues to tap on its three strategic pillars – consumer platforms, food service, and emerging markets, to grow its top line.
The company is also working with Microsoft (NASDAQ: MSFT) to tap on machine learning to innovate across its manufacturing, logistics, and research and development arms.
Expectations for 2022’s organic sales have been raised to a mid-single-digit percentage as Kraft Heinz expects strong performance for the full year.
Moody’s is a risk assessment company that assesses risks using big data and analytical solutions. It employs 14,000 employees in more than 40 countries.
The rating agency reported a 5% year on year dip in revenue to US$1.5 billion from a record-high in the prior year.
Operating profit fell by 23% year on year due to higher operating expenses incurred.
Net profit declined by 32.3% year on year to US$498 million.
Three of its four divisions saw year on year revenue declines due to volatile market conditions, with only the Structured Finance division reporting a 24% year on year increase.
Moody’s Analytics division enjoyed recurring revenue growth and high retention rates, providing the business with stability during volatile periods.
Floor & Décor is a speciality retailer of hard-surface flooring, dealing with a variety of materials such as tile, wood, laminate, and stone.
Founded in 2000, the company operates 166 warehouse-format stores and five design studios across 34 US states as of 31 March 2022.
The company’s growth has been impressive over the last five years – total sales increased from US$1.38 billion in 2017 to US$3.4 billion in 2021.
The number of warehouse stores went from 83 to 160 over the same period.
Floor & Décor’s momentum has continued into 1Q2022, with net sales jumping 31.5% year on year to US$1.03 billion and comparable store sales improving by 14.3% year on year.
Nine new stores are slated for the second quarter, with a target to open a total of 32 new stores in 2022.
CEO Tom Taylor is confident that the company can operate at least 500 stores in the US, implying that the company still has significant room to grow.
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Disclaimer: Royston Yang owns shares of Apple.
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