The man known as the Oracle of Omaha is 92 years old and about to turn 93, which tells you plenty about Warren Buffett stock picks. He’s been at this investing thing for longer than many of you and your significant other have been alive. Under current troubling market headwinds, you may find no greater comfort than the top Buffett investments.
Sure, you can always chase the latest system fad that might work in bull markets but collapse once the bears come a-crawling. And that’s the beauty of Buffett-approved stocks. By assessing the top names within the holdings of the Oracle’s Berkshire Hathaway (NYSE:BRK-B) conglomerate, you can build a portfolio that should weather any storm.
Again, Warren Buffett is close to the century mark in lifespan. He knows how to make money in any market. On that note, below are enticing Berkshire Hathaway recommendations that you should put on your watch list.
Warren Buffett Stock Picks: Kroger (KR)
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As a stalwart in the grocery store business, Kroger (NYSE:KR) makes an easy case for Warren Buffett stock picks. Obviously, the company caters to core needs: humans don’t do so well without daily nourishment. Further, because it’s such a critical business, even households hard hit by the post-pandemic economy can’t afford to skimp out on their calories.
This framework doesn’t exclusively help Kroger, to be honest. However, the company sits on the lower rungs of the trade-down effect. Should consumer pressures build, people will likely cut their expenditures at pricey restaurants in favor of cooking at home. Naturally, Kroger should benefit as a low-cost provider of the underlying ingredients. Plus, it’s one of the Buffett-approved stocks thanks to its valuation. Right now, shares trade at 10.28X forward earnings, favorably below 85.71% of its peers.
Finally, analysts peg KR as a consensus moderate buy. Their average price target comes in at $51.91, implying nearly 12% upside potential.
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Another strong idea for Warren Buffett stock picks, Visa (NYSE:V) presents an interesting case. If I’m being perfectly straightforward, it may be a controversial idea. On the surface, Americans love their plastic. Per a CNN report, U.S. credit card debt breached the $1 trillion level, a fresh record. If most of this figure stems from keeping up with the Joneses, I have zero problems viewing Visa as one of the top Buffett investments.
However, if an acceleration of this stat originates from households needing to make ends meet, that’s more problematic. Basically, if the economy suffers a recession, Visa may be on the hook for a rising bad debt count. So, I’m not personally ecstatic about this example among Berkshire Hathaway’s recommendations.
Still, Visa features strong long-term revenue growth and consistent profitability. As well, analysts love it, pegging V a consensus strong buy. Their average price target lands at $284.86, implying over 16% upside potential.
Warren Buffett Stock Picks: Coca-Cola (KO)
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If you know the Oracle of Omaha, you’ll recognize Coca-Cola (NYSE:KO) as an iconic name among Warren Buffett stock picks. With a famous sweet tooth, Buffett loves snacking on chocolate and Coke. Don’t get me wrong: I think it’s amazing, but I also wonder how he’s so durable. Anyway, I wish him well because Greg Abel’s stock picks just don’t have the same ring to them.
Let’s get back into it. One of the key advantages of KO is the aforementioned trade-down effect. In this case, rather than buying your caffeine at a trendy (but super-pricey) coffee shop, you can go to your local Kroger and pick up some Coca-Cola products. You get the same buzz at a much lower cost. Therefore, it’s a fundamentally sound example of stocks Buffett believes in (and consumes).
Financially, at a forward multiple of nearly 23x, KO doesn’t give you great value. However, it’s consistently profitable, a major attribute right now. Also, it’s an analyst-strong buy with an average price target of $71.82, implying nearly 19% growth.
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While everyone loves waxing poetic about the future of mobility belonging to electric vehicles, the hydrocarbon industry may be surprisingly relevant. To me, it’s no shocker that Chevron (NYSE:CVX) ranks among the Warren Buffett stock picks. Fundamentally, the transition to getting everyone into EVs will be an enormous undertaking. As well, the pivot will require significant upgrades to infrastructure.
On a strictly financial level, CVX isn’t exactly what you would call undervalued. Presently, shares trade at a trailing multiple of 10.14X and a forward multiple of 12X. However, CVX slipped about 8% since the beginning of this year, which could be undervalued based on outside fundamentals. Essentially, if return-to-office (RTO) trends pick up steam, traffic volume could increase.
Cynically, that would be great news for CVX. Also, the framework would add to Chevron’s growth trend and profitability margins. Lastly, analysts peg CVX as a consensus moderate buy. Their average price target clocks in at $190.36, implying 19% upside.
Warren Buffett Stock Picks: Amazon (AMZN)
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Another top-tier example of Warren Buffett stock picks that make plenty of sense, Amazon (NASDAQ:AMZN) is simply too dominant to be ignored. Yes, it’s incredibly controversial to take mom-and-pop stores out to dry, like a vacuum cleaner. Nevertheless, the manner in which it penetrated everyday transactions is unparalleled. Right now, it carries a market capitalization of $1.39 trillion and it could still move higher.
Essentially, the narrative centers on e-commerce retail sales as a percentage of total sales. Unsurprisingly, this metric hit 16.5% in the second quarter of 2020. Following a gradual slowdown to 14.4% in Q2 2022, this stat is on the bounce back. As of the latest read in Q2 2023, it hit 15.4%. Obviously, Amazon commands much of this activity.
Now, it’s not a discounted example of Buffett-approved stocks with a trailing earnings multiple of 106.23X. However, it delivers a robust three-year revenue growth rate (per-share basis) of 21.9%, beating out 83% of its peers. As well, analysts peg it as a strong buy with an average price target of $175.63, implying over 30% growth.
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A cloud-computing-based data services specialist, Snowflake (NYSE:SNOW) represents an intriguing idea among Warren Buffett stock picks. At a basic level, the inclusion of SNOW confirms that the top Buffett investments don’t just center on a bunch of boring value plays. Rather, the Oracle is attuned to contemporary trends while also keeping an eye on the future.
Personally, what I find appealing about Snowflake is its implications for cybersecurity. With the company’s data cloud architecture, enterprises have access to unified data, near-unlimited visibility, and powerful analytics. Put another way, Snowflake offers high-fidelity threat detection and a mechanism for swift incident responses.
Financially, the company is a growth machine, which isn’t a shocker. However, being priced at a forward multiple of 286x, it’s not the cheapest idea out there. Still, Snowflake features a solid balance sheet, particularly a cash-to-debt ratio of 12.64x. Turning to Wall Street, analysts peg SNOW as a consensus strong buy. Their average price target comes in at $195.80, implying nearly 28% upside potential.
General Motors (GM)
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To be clear, General Motors (NYSE:GM) isn’t everyone’s favorite idea for Warren Buffett stock picks. However, the Oracle also said to never bet against America. Given that GM represents an American automotive icon, I’d say that the inclusion of the brand among Berkshire Hathaway recommendations is true to form.
Primarily, I like GM because of its ability to convert its iconic car models into electric variants. Better yet, this concept has stormed out of the realm of the theoretical and into reality. For instance, Car and Driver reported that the Corvette will see a fully electric version hit showroom floors in 2024 as a 2025 model.
In fairness, the move will probably tick off automotive purists. At the same time, it will open a whole new addressable market: essentially, EV customers who are tired of the Tesla (NASDAQ:TSLA) two-tier design: boring or bizarre. On a final note, analysts peg GM as a consensus moderate buy. Their average price target stands at $50.33, implying over 50% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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