Some of Warren Buffett’s actions are totally bad. Okay, I said that. But I still think that Buffett is one of the greatest investors of all time and a true national treasure.
I also believe that the Omaha Oracle has some winners in Berkshire Hathawayin (NYSE: BRK.A) (NYSE: BRK.B) portfolio as well. Here are three shares of Buffett that are worth buying now.
Image source: The Motley Fool.
1. Buffett’s second favorite action: Apple
Everyone knows that Berkshire Hathaway herself is Buffett’s favorite action. But his second favorite is definitely Apple (NASDAQ: AAPL). Buffett referred to the tech giant as “probably the best deal I know in the world”. With that kind of endorsement, it’s no surprise that Apple is Berkshire’s largest holding company.
Some may think that Apple’s shares are close to a nosebleed level, with shares trading at 31 times the expected profit. However, my opinion is that there is a lot of space to run. I’m not alone: Wedbush analyst Daniel Ives thinks Apple could jump at least 27% next year and maybe even shoot more than 60%.
Ives and I share the same optimistic outlook on prospects for iPhone demand. The “G” in 5G (which the new iPhone models support) can mean huge instead of generation. I hope that sales of iPhones and the service ecosystem created around it will continue to grow.
As Steve Jobs used to say, there is one more thing. I am cautiously optimistic about Apple’s plans for an autonomous car. The company is forming a partnership with Hyundai and Kia to make the cars. Apple does not need to conquer a large chunk of the autonomous car market to boost its growth.
2. A big addition in 2020: Bristol Myers Squibb
I saw the purchase of Bristol Myers Squibb (NYSE: BMY) shares as one of Berkshire’s best additions to its portfolio last year. My opinion is that the large pharmaceutical stock has several advantages.
On the one hand, BMS is very cheap. Its shares are traded at just eight times the expected profit. Okay, there is a reason behind this discount assessment. Revlimid, the successful blood cancer drug, faces generic competition from 2022 onwards.
However, the BMS schedule includes several other growth factors. The anticoagulant Eliquis, the medicine for autoimmune diseases Orencia and the cancer immunotherapies Opdivo and Yervoy have solid prospects. Newer drugs, including Reblozyl and Zeposia, are expected to be rising stars for the company. The same should happen with the recently approved cell therapy lisa-cel and another promising candidate ide-cel.
As an added bonus, BMS offers an attractive dividend that currently yields more than 3%. I think this big pharmaceutical industry was a great choice for Buffett in 2020 and it remains a great choice for investors now.
3. Load ahead: Mastercard
MasterCard (NYSE: MA) it is not a new stake in the Berkshire portfolio. The fintech giant has been a big winner for Buffett for quite some time. I hope you keep winning.
Of course, some may think that Mastercard looked like a loser based on the results of the fourth quarter. Net revenue and profit fell year on year. The COVID-19 pandemic hurt travel spending, which caused Mastercard’s international volume to plummet 29%.
However, Mastercard should see its business recover well as concerns about COVID-19 subside. I am hopeful that this is exactly what will happen as more people around the world receive vaccines in the coming months.
In the long run, Mastercard will benefit from changing the money. I think it is one of the best growth actions that Buffett has.