Warren Buffett and his team at Berkshire Hathaway have etched themselves in the annals of finance for their astute investment decisions spanning decades. Over time, they have garnered a faithful following among investors keen on mirroring Berkshire’s stock picks.
While not every stock in Buffett’s portfolio may currently be a prudent choice for an investor with $300 to spare, there are a handful that stand out as compelling options. Here are three stocks under Berkshire’s wing that warrant a closer look for the discerning investor.
Meet Amazon
The narrative of Amazon’s ((NASDAQ: AMZN)) evolution from an online marketplace to a diversified service-oriented model is a tale worth its weight in gold. With a robust suite of services such as third-party seller services, advertising services, and Amazon Web Services (AWS), Amazon derives more revenue from its service divisions than its e-commerce arm, a move that has significantly bolstered its profitability.
This strategic shift has not only propelled Amazon’s profit growth upward over the past decade (discounting the disruptive pandemic year) but has also seen its stock poised for further ascension, backed by a trajectory of escalating profits and margins.
Enter Visa
Visa ((NYSE: V)) brings to the table a seasoned business strategy that reflects in its earnings performance. Despite a modest 9% year-over-year revenue growth in the first quarter of the fiscal year 2024, Visa managed to spike its EPS by a commendable 20%, achieved through judicious expense management and share buybacks.
With a winning formula combining revenue growth with stringent cost controls, Visa is in the enviable position to sustain its earnings momentum, propelling its stock ahead of the market curve.
The Snowflake Effect
Surprising to some, Berkshire holds a stake in the high-growth entity known as Snowflake ((NYSE: SNOW)). Although not Buffett’s typical investment play, the presence of Berkshire executive Todd Combs, known for his penchant for growth-oriented stocks, could explain the bet on Snowflake. The cloud-based data storage and analytics service stands at the forefront of the data-driven era, poised to cater to the burgeoning need for information in the AI realm.
Following a trajectory common to tech stocks, Snowflake witnessed a surge in valuation in 2021, a subsequent dip during the 2022 market correction, and a gradual rebound since. With a new CEO at the helm, Sridhar Ramaswamy, the company is eyeing a resurgence, particularly as its stock is currently trading at historical lows in terms of sales multiples.
At 18.3 times sales and boasting year-over-year revenue growth of 33% in its latest quarter, Snowflake presents an opportune moment for investors seeking a position in a stock primed for the long haul.
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