We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Mimic Warren Buffett's Strategy With These 3 Stocks
Read MoreHide Full Article
Warren Buffett, also known as the Oracle of Omaha, is a name that jumps to the forefront of many minds when thinking of the financial world.
Many mimic his portfolio moves.
And recently, the Oracle of Omaha has been critical of those opposing share buybacks, as revealed in the latest shareholder letter.
Many have become weary of buybacks, with President Joe Biden fiercely opposing the practice by introducing a new 1% tax on the practice.
Of course, much more was discussed in the letter, including an update on operations and financial results.
Nonetheless, for those interested in building a portfolio like Buffett, three top holdings of Berkshire – Apple (AAPL - Free Report) , Bank of America (BAC - Free Report) , and Chevron (CVX - Free Report) – would provide precisely that.
Below is a chart illustrating the year-to-date performance of all three stocks above, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Chevron
Chevron is one of the world's largest publicly traded oil and gas companies, with operations that span almost every corner of the globe. Interestingly enough, the company recently unveiled a massive $75 billion share purchase program.
The surge in energy prices has amplified the company’s cash-generating abilities, with CVX reporting free cash flow of $8.6 billion in its latest quarter. This is further illustrated in the chart below.
Image Source: Zacks Investment Research
And, of course, the company’s dividend has benefited as well, with CVX’s payout growing by 6% over the last year. The company’s annual dividend currently yields a solid 3.7%.
Image Source: Zacks Investment Research
Apple
Buffett states that he loves the tech titan because of its customers’ brand loyalty; consumers are likely to trade in old Apple products for new ones.
The company snapped a streak of positive surprises in its latest release, falling short of the Zacks Consensus EPS Estimate by roughly 2% and reporting sales 3% below expectations.
Image Source: Zacks Investment Research
The market shook off the less-than-expected results, with AAPL shares climbing nearly 2% in the following trading session.
Image Source: Zacks Investment Research
Apple shares presently trade at a 24.3X forward earnings multiple, a few ticks above the 23.6X five-year median and the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
The stock currently has a Value Style Score of “D.”
Bank of America
Another one of the portfolio’s largest holdings, Bank of America, is one of the largest financial holding companies in the U.S.
The company’s TTM price-to-book ratio presently works out to be 1.1X, precisely in line with the five-year median and below highs of 1.7X in 2022.
Image Source: Zacks Investment Research
And similar to CVX, Bank of America rewards its shareholders nicely; the company’s annual dividend yields 2.6%, modestly above the Zacks Finance sector average.
Image Source: Zacks Investment Research
BAC posted better-than-expected results in its latest release, exceeding the Zacks Consensus EPS Estimate by more than 11% and posting revenue 2% above expectations.
Image Source: Zacks Investment Research
Bottom Line
Buffett is a philanthropist and businessman. He’s the CEO of Berkshire Hathaway (BRK.B - Free Report) , a diversified holding company whose subsidiaries engage in insurance, freight rail transportation, energy generation and distribution, manufacturing, and others.
And recently, his comments regarding share buybacks in an annual shareholder letter have made headlines during a time when many have become critical of the practice.
Although all may not agree with his statements, for those interested in looking past and structuring a portfolio similar to the Oracle of Omaha, all three stocks above – Apple (AAPL - Free Report) , Bank of America (BAC - Free Report) , and Chevron (CVX - Free Report) – place you on the right track.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Mimic Warren Buffett's Strategy With These 3 Stocks
Warren Buffett, also known as the Oracle of Omaha, is a name that jumps to the forefront of many minds when thinking of the financial world.
Many mimic his portfolio moves.
And recently, the Oracle of Omaha has been critical of those opposing share buybacks, as revealed in the latest shareholder letter.
Many have become weary of buybacks, with President Joe Biden fiercely opposing the practice by introducing a new 1% tax on the practice.
Of course, much more was discussed in the letter, including an update on operations and financial results.
Nonetheless, for those interested in building a portfolio like Buffett, three top holdings of Berkshire – Apple (AAPL - Free Report) , Bank of America (BAC - Free Report) , and Chevron (CVX - Free Report) – would provide precisely that.
Below is a chart illustrating the year-to-date performance of all three stocks above, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Chevron
Chevron is one of the world's largest publicly traded oil and gas companies, with operations that span almost every corner of the globe. Interestingly enough, the company recently unveiled a massive $75 billion share purchase program.
The surge in energy prices has amplified the company’s cash-generating abilities, with CVX reporting free cash flow of $8.6 billion in its latest quarter. This is further illustrated in the chart below.
Image Source: Zacks Investment Research
And, of course, the company’s dividend has benefited as well, with CVX’s payout growing by 6% over the last year. The company’s annual dividend currently yields a solid 3.7%.
Image Source: Zacks Investment Research
Apple
Buffett states that he loves the tech titan because of its customers’ brand loyalty; consumers are likely to trade in old Apple products for new ones.
The company snapped a streak of positive surprises in its latest release, falling short of the Zacks Consensus EPS Estimate by roughly 2% and reporting sales 3% below expectations.
Image Source: Zacks Investment Research
The market shook off the less-than-expected results, with AAPL shares climbing nearly 2% in the following trading session.
Image Source: Zacks Investment Research
Apple shares presently trade at a 24.3X forward earnings multiple, a few ticks above the 23.6X five-year median and the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
The stock currently has a Value Style Score of “D.”
Bank of America
Another one of the portfolio’s largest holdings, Bank of America, is one of the largest financial holding companies in the U.S.
The company’s TTM price-to-book ratio presently works out to be 1.1X, precisely in line with the five-year median and below highs of 1.7X in 2022.
Image Source: Zacks Investment Research
And similar to CVX, Bank of America rewards its shareholders nicely; the company’s annual dividend yields 2.6%, modestly above the Zacks Finance sector average.
Image Source: Zacks Investment Research
BAC posted better-than-expected results in its latest release, exceeding the Zacks Consensus EPS Estimate by more than 11% and posting revenue 2% above expectations.
Image Source: Zacks Investment Research
Bottom Line
Buffett is a philanthropist and businessman. He’s the CEO of Berkshire Hathaway (BRK.B - Free Report) , a diversified holding company whose subsidiaries engage in insurance, freight rail transportation, energy generation and distribution, manufacturing, and others.
And recently, his comments regarding share buybacks in an annual shareholder letter have made headlines during a time when many have become critical of the practice.
Although all may not agree with his statements, for those interested in looking past and structuring a portfolio similar to the Oracle of Omaha, all three stocks above – Apple (AAPL - Free Report) , Bank of America (BAC - Free Report) , and Chevron (CVX - Free Report) – place you on the right track.