Warren Buffett and Wall Street Analysts Love These Stocks
In this piece, we will take a look at the stocks that Warren Buffett and Wall Street analysts love. If you want to skip our background on Warren Buffett and his investment giant Berkshire Hathaway, then take a look at Warren Buffett and Wall Street Analysts Love These Stocks: Top 5 Stocks.
Warren Buffett is one of the richest people in the world, with his fortunes being a result of careful and prudent investment decisions made on the stock market and in the finance industry. He operates through the investment holding company Berkshire Hathaway which is also one of the most valuable companies in the world. Berkshire's shares trade under two tickers, namely Berkshire Hathaway Inc. (NYSE:BRK-A) and Berkshire Hathaway Inc. (NYSE:BRK-B), and the firm's market capitalization is a whopping $786 billion. This makes Berkshire nearly a trillion dollar company, despite the fact that it does not operate in the lucrative technology industry like today's trillion dollar giants such as Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
Of course, big tech mega cap giants are several times more valuable than Berkshire; however, Mr. Buffett's firm's status as a beast of its own standing is clear when we compare its $786 market capitalization to the value of the world's biggest bank JPMorgan Chase & Co. (NYSE:JPM). JPMorgan's latest market cap is $445 billion, so despite having trillions of dollars in assets, the bank is considerably less valuable than Berkshire.
So, what makes Warren Buffett so successful? It's a question that a lot of people wonder every day, probably when looking at their rent payments at least. After all, if it was easy to become a billionaire, everyone would become one. As a result, the common belief in the general public is that there really must be an undecipherable secret sauce known only to the famed Oracle of Omaha. Well, the answer isn't that complicated if we're honest. One of the biggest assets that Mr. Buffett has successfully made use of during his multi decade career as an investment manager is not money, but time. Even the richest person in the world (right now it's Elon Musk) cannot use his billions to buy time, and slightly deviating from our subject, Elon Musk is at the top of the global wealth food chain today because he spent his time building companies and solving some of the most difficult problems in the world such as high volume electric vehicle manufacturing and rocket reusability.
For Mr. Buffett, his utilization of time has come through an investment approach called value investing. Value Investing is a well known approach followed by other hedge fund bosses such as Seth Klarman of Baupost Group and Leon Cooperman. It involves carefully evaluating a stock and then determining its fair value. This fair value is then compared to the share price, and if it's lower, then a case is made for a buying decision. This decision is also influenced by a term called the Margin of Safety. This is the difference between the market price and the fair value. The higher this percentage value is, i.e., the greater the difference between the fair value and the trading price, the safer a stock purchase is since it serves to theoretically protect an investment from facing significant losses on the market. For instance, if the fair value of two stocks is determined to be $20, and one is trading for $15 while the going rate for the other is $10, then ceteris paribus, the latter will be a better buy since the chances of it dropping are lower than they are for the stock with the market price of $15.
One commonly used way of determining the fair value of a stock is through analyst estimates. Analysts working for financial firms spend hours and days pouring over balance sheets, income statements, the broader economic environment, and any other factor that can affect a business's current or future operations. Based on their research, they assign stock share ratings and a share price target. These ratings are typically upgraded once a year, but for more popular companies, the changes can be more frequent. The difference between the analyst share price target and the market price is described as a stock being undervalued or overvalued, with some choosing to make their investment decisions accordingly.
Today, we'll take a look at the stocks in Warren Buffett's latest investment portfolio and see which ones are favored by analysts. Some top Warren Buffett and analyst stock picks are The Liberty SiriusXM Group (NASDAQ:LSXMA), Atlanta Braves Holdings, Inc. (NASDAQ:BATRA), and Liberty Latin America Ltd. (NASDAQ:LILA).
Our Methodology
To compile our list of the stocks that both Warren Buffett and analysts love, we used Berkshire Hathaway's latest SEC filings and ranked them by the average share price target percentage upside. Out of these, the top ten stocks were chosen as those that both Warren Buffett and analysts love.
Warren Buffett and Wall Street Analysts Love These Stocks
10. Nu Holdings Ltd. (NYSE:NU)
Berkshire Hathaway's Q3 2023 Investment Value: $776 million
Average Analyst Share Price Upside: 18%
Nu Holdings Ltd. (NYSE:NU) is a Brazilian regional bank headquartered in Sao Paulo, Brazil. It is an early mover in the lucrative digital banking market of Brazil, the largest economy in South America. The shares are rated Buy on average and the average share price target is $9.66.
By the end of 2023's June quarter, 44 among the 910 hedge funds tracked by Insider Monkey were the firm's shareholders. Nu Holdings Ltd. (NYSE:NU)'s largest hedge fund investor during the September quarter was Warren Buffett's Berkshire Hathaway due to its $776 million investment.
Nu Holdings Ltd. (NYSE:NU) joins Atlanta Braves Holdings, Inc. (NASDAQ:BATRA), The Liberty SiriusXM Group (NASDAQ:LSXMA), and Liberty Latin America Ltd. (NASDAQ:LILA) in our list of stocks loved by Warren Buffett and analysts.
9. Snowflake Inc. (NYSE:SNOW)
Berkshire Hathaway's Q3 2023 Investment Value: $935 million
Average Analyst Share Price Upside: 18%
Snowflake Inc. (NYSE:SNOW) is a cloud computing company that helps users manage and analyze their data. A strong shift towards cloud computing coupled with strong advances in computing has helped the firm as it has beaten analyst EPS estimates in all four of its latest quarters. Warren Buffett's Berkshire Hathaway owned 6.1 million Snowflake Inc. (NYSE:SNOW) shares during Q3 2023 allowing it to own a $935 million stake. The firm's average share price target is $197.66 and analysts have set an average share rating of Buy.
During Q2 2023, 65 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Snowflake Inc. (NYSE:SNOW). In the following quarter, Brad Gerstner's Altimeter Capital Management was the biggest shareholder due to its $2.3 billion stake.
8. Charter Communications, Inc. (NASDAQ:CHTR)
Berkshire Hathaway's Q3 2023 Investment Value: $1.6 billion
Average Analyst Share Price Upside: 19%
Charter Communications, Inc. (NASDAQ:CHTR) is an American telecommunications company that provides broadband internet, cable services, and advertising services. Its shares are rated Buy on average and analysts have set an average share price target of $471.66.
As of June 2023 end, 67 out of the 910 hedge funds profiled by Insider Monkey had invested in Charter Communications, Inc. (NASDAQ:CHTR). A slowdown in the telecommunications sector has led to bumpy financial performance, with only two EPS beats during its four latest quarters. Additionally, Charter Communications, Inc. (NASDAQ:CHTR) was fined $25 million by the SEC in November 2023 for violating share buyback regulations.
7. Jefferies Financial Group Inc. (NYSE:JEF)
Berkshire Hathaway's Q3 2023 Investment Value: $15.8 million
Average Analyst Share Price Upside: 19%
Jefferies Financial Group Inc. (NYSE:JEF) is a financial services company headquartered in New York, New York. It serves the needs of the investment banking, asset management, and capital financing markets. Jefferies Financial Group Inc. (NYSE:JEF)'s shares are rated Buy on average and its average share price target is $41.33.
By the end of this year's second quarter, 35 among the 910 hedge funds tracked by Insider Monkey had held a stake in the company. During September 2023, the firm's largest investor was Robert Rodriguez and Steven Romick's First Pacific Advisors LLC as it owned 5.4 million shares that are worth $198 million.
6. T-Mobile US, Inc. (NASDAQ:TMUS)
Berkshire Hathaway's Q3 2023 Investment Value: $734 million
Average Analyst Share Price Upside: 20%
T-Mobile US, Inc. (NASDAQ:TMUS) is a telecommunications carrier headquartered in Bellevue, Washington. It's the first stock on our list that is rated Strong Buy on average by analysts with the average share price target being $178.02. The firm's shares saw some action in October 2023, as they jumped after T-Mobile US, Inc. (NASDAQ:TMUS) announced that it continued to add subscribers during Q3.
In the previous quarter, 86 out of the 910 hedge funds surveyed by Insider Monkey had invested in T-Mobile US, Inc. (NASDAQ:TMUS). Warren Buffett's Berkshire Hathaway owned the biggest stake in the firm as of Q3, which was worth $734 million.
The Liberty SiriusXM Group (NASDAQ:LSXMA), T-Mobile US, Inc. (NASDAQ:TMUS), Atlanta Braves Holdings, Inc. (NASDAQ:BATRA), and Liberty Latin America Ltd. (NASDAQ:LILA) are some top Warren Buffett stocks that analysts are optimistic about.
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Disclosure: None. Warren Buffett and Wall Street Analysts Love These Stocks is originally published on Insider Monkey.