Warren Buffett was extremely successful prior to the 90s when investing was easier. There are several other legendary investors who were extremely successful prior to the 90s but seem to lost their touch over the past decade. As information disseminated more freely and quicker, the easy profits in the stock market disappeared. Nevertheless Warren Buffett is still a much better investor than most hedge fund managers. One thing Buffett got right whereas most "hedge" fund managers got wrong is hedging. Buffett doesn't believe in consistently hedging his bets. The stock market tends to rise over long periods of time, so it is a much better strategy not to hedge in the short term. Ten years ago Berkshire's shares were changing hands at $73. Today, the same shares trade at $278. Investors who consistently stayed invested in Buffett's company nearly quadrupled their money. Unfortunately, S&P 500 ETF (SPY) investors performed slightly better than Mr. Buffett during the last 10 years. SPY was trading at an adjusted price of $100 ten years ago. Today, it is trading at $439. Warren Buffett underperformed the market by 58 percentage points in 10 years.
As you can see, investing in Berkshire Hathaway hasn't been a good idea over the last 10 years. However, our research has shown that there is a positive correlation between Warren Buffett's stock position sizes and returns. For example Warren Buffett's top 10 stock positions generated annual alpha of 1 percentage point between 1999 and 2017. That's not much, but still better than the zero alpha offered by passive index funds.
With this context in mind, here is our list of the 15 best Warren Buffett stocks to buy now. These companies were ranked keeping in mind the basic business fundamentals, hedge fund sentiment, and analyst ratings for each.
15 Best Warren Buffett Stocks to Buy Now
Number of Hedge Fund Holders: 72
AbbVie Inc. (NYSE: ABBV) is a drug manufacturer based in North Chicago, Illinois. It is ranked fifteenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 20.11% to investors over the course of the past year.
On April 30, AbbVie Inc. (NYSE: ABBV) posted earnings for the first quarter of 2021, reporting earnings per share of $2.95, beating estimates by $0.12. The revenue over the period was around $12.94 billion, up 50.08% year-over-year.
At the end of the first quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth around $5.92 billion in AbbVie Inc. (NYSE: ABBV). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in AbbVie Inc. (NYSE: ABBV) as of the end of the first quarter of 2021, worth close to $2.47 billion, comprising 0.91% of its total 13F portfolio.
On July 2, Daiwa gave an Outperform rating to AbbVie Inc. (NYSE: ABBV) with a $126 price target.
Just like Apple Inc. (NASDAQ: AAPL), Bank of America Corporation (NYSE: BAC), and General Motors Company (NYSE: GM), AbbVie Inc. (NYSE: ABBV) is one of the best Warren Buffett stocks to buy now.
14. Chevron Corporation (NYSE: CVX)
Number of Hedge Fund Holders: 41
Chevron Corporation (NYSE: CVX) is an American multinational energy corporation, mainly active in the oil and natural gas industries. It is ranked fourteenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 9.22% to investors over the course of the past year.
On April 30, Chevron Corporation (NYSE: CVX) posted earnings for the first quarter of 2021, reporting earnings per share of $$0.90, missing estimates by $0.04. The revenue over the period was around $32.03 billion, up 1.68% year-over-year.
At the end of the first quarter of 2021, 41 hedge funds in the database of Insider Monkey held stakes worth around $4.87 billion in Chevron Corporation (NYSE: CVX). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in Chevron Corporation (NYSE: CVX) as of the end of the first quarter of 2021, worth close to $2.48 billion, comprising 0.91% of its total 13F portfolio.
On July 23, Piper Sandler increased its price target on Chevron Corporation (NYSE: CVX) to $137 from $125 while maintaining its Overweight rating and arguing that the crude oil market boosts the free cash flow expectations for the company.
In its Q1 2021 investor letter, Nelson Capital Management, an investment management firm, mentioned Chevron Corporation (NYSE: CVX). Here is what the firm had to say:
In the energy sector, we bought a position in Chevron (tkr: CVX). As interest rates have increased, we have witnessed a rotation out of growth and momentum stocks and into value stocks. We think this trend could continue, which would be advantageous for Chevron . Additionally, we anticipate an uptick in oil and gas demand as more people get vaccinated and air travel picks up . Higher oil prices coupled with increased demand should lead to better earnings results for Chevron, which will enable it to support (or perhaps grow) its Large 5% dividend.
Number of Hedge Fund Holders: 42
VeriSign, Inc. (NASDAQ: VRSN) is an American company operating a varied array of network infrastructure, including the authoritative domain name registries of the Internet's top-level domains, .com and .net. It is ranked thirteenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 12.25% to investors over the course of the past year.
On July 22, VeriSign, Inc. (NASDAQ: VRSN) posted earnings for the second quarter of 2021, reporting earnings per share of $1.31, missing estimates by $0.05. The revenue over the period was around $329 million, up 4.78% year-over-year.
At the end of the first quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $5.64 billion in VeriSign, Inc. (NASDAQ: VRSN). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in VeriSign, Inc. (NASDAQ: VRSN) as of the end of the first quarter of 2021, worth close to $2.55 billion, comprising 0.94% of its total 13F portfolio.
In the first quarter of 2021, William Von Mueffling's Cantillon Capital Management increased its stake in VeriSign, Inc. (NASDAQ: VRSN) by 23% to around $360 million, comprising 2.62% of its total 13F portfolio.
VeriSign, Inc. (NASDAQ: VRSN) is one of the best Warren Buffett stocks to buy now, alongside Apple Inc. (NASDAQ: AAPL), Bank of America Corporation (NYSE: BAC), and General Motors Company (NYSE: GM).
12. Charter Communications, Inc. (NASDAQ: CHTR)
Number of Hedge Fund Holders: 74
Charter Communications, Inc. (NASDAQ: CHTR) is an American telecommunication and mass media company. It is ranked twelfth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned over 27.23% to investors over the course of the past year.
On April 30, Charter Communications, Inc. (NASDAQ: CHTR) posted earnings for the first quarter of 2021, reporting earnings per share of $4.23, missing estimates by $0.19. The revenue over the period was around $12.52 billion, up 6.68% year-over-year.
At the end of the first quarter of 2021, 74 hedge funds in the database of Insider Monkey held stakes worth $16.40 billion in Charter Communications, Inc. (NASDAQ: CHTR). Out of the hedge funds being tracked by Insider Monkey, billionaire Chris Hohn's TCI Fund Management has the most valuable position in Charter Communications, Inc. (NASDAQ: CHTR) as of the end of the first quarter of 2021, worth close to $6.33 billion, comprising 18.36% of its total 13F portfolio.
On July 20, Morgan Stanley kept its Overweight rating on Charter Communications, Inc. (NASDAQ: CHTR) while boosting its price target to $800 from $750, expecting higher EBITDA growth.
In its Q1 2021 investor letter, ClearBridge Investments, an investment management firm, mentioned Charter Communications, Inc. (NASDAQ: CHTR). Here is what the firm had to say:
The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter trailed after generating robust returns earlier in the recovery.
11. The Bank of New York Mellon Corporation (NYSE: BK)
Number of Hedge Fund Holders: 49
The Bank of New York Mellon Corporation (NYSE: BK) is an investment services and management company. It is ranked eleventh on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 36.44% to investors over the course of the past year.
On July 15, The Bank of New York Mellon Corporation (NYSE: BK) posted earnings for the second quarter of 2021, reporting earnings per share of $1.13, beating estimates by $0.13. The revenue over the period was around $3.96 billion, down 1.25% year-over-year.
At the end of the first quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $4.77 billion in The Bank of New York Mellon Corporation (NYSE: BK), up from 47 the preceding quarter worth $4.69 billion.
On July 20, Argus upgraded its rating on The Bank of New York Mellon Corporation (NYSE: BK) to Buy from Hold and put a $55 price target, arguing that its revenue will become better with its high asset levels.
In addition to Apple Inc. (NASDAQ: AAPL), Bank of America Corporation (NYSE: BAC), and General Motors Company (NYSE: GM), The Bank of New York Mellon Corporation (NYSE: BK) is one of the best Warren Buffett stocks to buy now.
10. General Motors Company (NYSE: GM)
Number of Hedge Fund Holders: 86
General Motors Company (NYSE: GM) is an American multinational corporation, manufacturing and selling automobiles and automobile parts. It is ranked tenth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 118.16% to investors over the course of the past year.
On May 5, General Motors Company (NYSE: GM) posted earnings for the first quarter of 2021, reporting earnings per share of $2.25, beating estimates by $1.20. The revenue over the period was around $32.47 billion, down 0.72% year-over-year.
At the end of the first quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $8.05 billion in General Motors Company (NYSE: GM), up from 70 the preceding quarter worth $6.33 billion.
On July 16, BofA kept its Buy rating on General Motors Company (NYSE: GM) while boosting its price target to $90 from $80. BofA expects Q2 results to be very good against a backdrop of low outlooks for the auto industry.
Number of Hedge Fund Holders: 34
DaVita Inc. (NYSE: DVA) is a medical care company providing kidney dialysis services. It is ranked ninth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 39.65% to investors over the course of the past year.
On April 29, DaVita Inc. (NYSE: DVA) posted earnings for the first quarter of 2021, reporting earnings per share of $2.09, beating estimates by $0.31. The revenue over the period was around $2.82 billion, down 0.75% year-over-year.
At the end of the first quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $4.40 billion in DaVita Inc. (NYSE: DVA), up from 32 the preceding quarter worth $4.81 billion.
On July 19, Deutsche Bank boosted its price target on DaVita Inc. (NYSE: DVA) to $207 from $150 and maintained its Buy rating, arguing that the company had a structural shift for the better.
DaVita Inc. (NYSE: DVA) is one of the best Warren Buffett stocks to buy now, much like Apple Inc. (NASDAQ: AAPL), Bank of America Corporation (NYSE: BAC), and General Motors Company (NYSE: GM).
Number of Hedge Fund Holders: 43
U.S. Bancorp (NYSE: USB) is an American bank with a significant presence in retail banking with a high number of branches. It is ranked eighth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 56.28% to investors over the course of the past year.
On July 15, U.S. Bancorp (NYSE: USB) posted earnings for the second quarter of 2021, reporting earnings per share of $1.28, beating estimates by $0.15. The revenue over the period was around $5.76 billion, down 1.00% year-over-year.
At the end of the first quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $8.34 billion in U.S. Bancorp (NYSE: USB). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in U.S. Bancorp (NYSE: USB) as of the end of the first quarter of 2021, worth close to $7.17 billion, comprising 2.65% of its total 13F portfolio.
On July 16, Barclays kept its Overweight rating on U.S. Bancorp (NYSE: USB) while raising its price target to $68 from $65, noting that its fee income was higher than expected in the second quarter of 2021.
7. Moody's Corporation (NYSE: MCO)
Number of Hedge Fund Holders: 55
Moody's Corporation (NYSE: MCO) is an American financial services company, offering credit ratings as well as providing financial analysis services. It is ranked seventh on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 30.29% to investors over the course of the past year.
On April 28, Moody's Corporation (NYSE: MCO) posted earnings for the first quarter of 2021, reporting earnings per share of $4.06, beating estimates by $1.26. The revenue over the period was around $1.60 billion, up 24.03% year-over-year.
At the end of the first quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $13.73 billion in Moody's Corporation (NYSE: MCO). Out of the hedge funds being tracked by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in Moody's Corporation (NYSE: MCO) as of the end of the first quarter of 2021, worth close to $7.37 billion, comprising 2.72% of its total 13F portfolio.
On July 7, Raymond James kept its Outperform rating on Moody's Corporation (NYSE: MCO) with a price target increase to $394 from $341, forecasting an increase in its ratings revenue.
Apart from Apple Inc. (NASDAQ: AAPL), Bank of America Corporation (NYSE: BAC), and General Motors Company (NYSE: GM), AbbVie Inc. (NYSE: ABBV) is one of the best Warren Buffett stocks to buy now.
6. Verizon Communications Inc. (NYSE: VZ)
Number of Hedge Fund Holders: 69
Verizon Communications Inc. (NYSE: VZ) is an American telecommunication company. It is ranked sixth on our list of 15 best Warren Buffett stocks to buy now. The stock has returned 0.20% to investors over the course of the past year.
On July 21, Verizon Communications Inc. (NYSE: VZ) posted earnings for the second quarter of 2021, reporting earnings per share of $1.37, beating estimates by $0.07. The revenue over the period was around $33.76 billion, up 10.89% year-over-year.
At the end of the first quarter of 2021, 69 hedge funds in the database of Insider Monkey held stakes worth $11.38 billion in Verizon Communications Inc. (NYSE: VZ), up from 67 the preceding quarter worth $10.50 billion.
In the first quarter of 2021, Warren Buffett's Berkshire Hathaway increased its stake in Verizon Communications Inc. (NYSE: VZ) by 9% to around $9.24 billion, comprising 3.41% of its total 13F portfolio and having the most valuable position in Verizon Communications Inc. (NYSE: VZ).
On July 7, Tigress Financial kept its Buy rating on Verizon Communications Inc. (NYSE: VZ) with a $67 price target, noting that the company will benefit further from its 5G network development.
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Disclose. None. 15 Best Warren Buffett Stocks to Buy Now is originally published on Insider Monkey.