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Here are six stock picks favored by Warren Buffett that you might consider adding to your portfolio, whether you have $1,000 or $100,000 to invest. Each stock is reasonably or attractively valued, although some are encountering challenges. Dive deeper into any that catch your interest.
1. **Occidental Petroleum**
Buffett has been increasing his stake in Occidental Petroleum (NYSE: OXY), owning approximately 28% of the company. Occidental is a major independent oil and gas producer in the U.S., with a chemical subsidiary, OxyChem, and a commitment to reducing emissions. Despite a recent 16% decline in its stock price, Buffett saw an opportunity to buy more shares at a lower price. Concerns include the company’s high debt from the acquisition of CrownRock and the impact of falling oil prices. However, Occidental also boasts assets in the low-cost production region of the Permian Basin and is actively reducing its debt.
2. **Kraft Heinz**
Kraft Heinz (NASDAQ: KHC) is Berkshire’s eighth-largest holding, with Berkshire owning 27% of the company. Known for brands like Oscar Mayer, Ore-Ida, and Maxwell House, Kraft Heinz experienced lower-than-expected revenue in the fourth quarter but exceeded earnings expectations with rising profit margins. The stock is reasonably priced, trading at a forward P/E ratio of 9, below its five-year average of 13.3.
3. **Ally Financial**
Ally Financial (NYSE: ALLY) is a digital financial services company that focuses on auto loans, emerging from a spin-off from General Motors. Ally Financial recently decided to streamline its services by selling its credit card business and doubling down on its core expertise.
4. **Charter Communications**
Charter Communications (NASDAQ: CHTR) is a broadband and cable operator serving millions of households and businesses across the U.S. While Berkshire reduced its stake in Charter Communications by 25% in the past quarter, the stock remains appealing due to its attractive valuation. Charter has a forward P/E of 9, below its historical average, despite facing some challenges in customer retention and debt management.
5. **Vanguard S&P 500 ETF**
Though technically an ETF and not a stock, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is worth considering. Buffett has long recommended S&P 500 index funds for investors, including his wife. This ETF tracks the performance of the S&P 500 index, comprising 500 leading U.S. companies. Investing in a broad-based index fund like this can be a solid strategy for long-term growth.
0 companies make up around 80% of the total value of the U.S. stock market. The S&P 500 has demonstrated a consistent long-term performance, with average annual returns reaching close to 10% over extended periods and even providing a modest yet increasing dividend payout.
Additionally, there’s Berkshire Hathaway, a solid choice for potential growth in the upcoming years. While it may not achieve the same annual gains of 20% as before, it is expected to maintain its stability without significant decline. Berkshire Hathaway is designed for longevity, holding numerous wholly owned subsidiaries along with substantial stock investments. For instance, it holds over 21% of American Express and 9% of Coca-Cola shares.
Consider adding any or all of these investment options to your portfolio. Even with just $1,000, you could diversify across multiple choices or opt for an S&P 500 index fund and/or shares of Berkshire Hathaway.
Don’t let a promising opportunity slip away. Have you ever regretted not investing in the most successful stocks early on? If so, here’s your chance to catch up. Periodically, our team of experts releases “Double Down” stock recommendations for companies they believe are on the brink of significant growth. If you fear you missed the initial investment window, now might be the ideal moment to make a move. The results are impressive:
– Nvidia: A $1,000 investment from our “Double Down” recommendation in 2009 would now be valued at $361,026!
– Apple: A $1,000 investment following our “Double Down” advice in 2008 would now amount to $46,425!
– Netflix: A $1,000 investment following our “Double Down” suggestion in 2004 would now be worth $562,659!
Currently, we are issuing “Double Down” alerts for three exceptional companies, and such opportunities may not present themselves frequently.
For more details, visit our website to learn more.
*Returns from Stock Advisor as of February 3, 2025.
American Express and Ally are advertising partners of Motley Fool Money. Selena Maranjian holds positions in American Express, Apple, and Berkshire Hathaway. The Motley Fool holds positions in and recommends Apple, Berkshire Hathaway, Vanguard S&P 500 ETF, and Zoetis. The Motley Fool also recommends General Motors, Kraft Heinz, and Occidental Petroleum. Our disclosure policy is available for review.
