If any investor has stood the test of time, it is Warren Buffett. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws literally thousands of loyal fans who are investors. Known for his long buy-and-hold strategies and his massive portfolio of public and private holdings, he remains one of the preeminent investors in the entire world.
The Federal Reserve has stated its intent to have the federal funds rate to 4.75% to 5.00% by the end of the year, or early next year, which implies yet another 75-basis-point increase in November and a 50-basis-point raise in December. That does not bode well for stocks. So, it makes sense to continue to raise as much cash as possible. For those looking to add new positions now, we decided to screen the Berkshire Hathaway holdings for companies that pay solid dividends and topped third-quarter earnings estimates.
These five top companies that the “Oracle of Omaha” has a stake in make sense for worried investors with a long-term horizon, as they came up big in the third quarter and are rated Buy by top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Bank of America
Interest rate increases are welcomed by banks, and this is one of the biggest in the country. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.
Bank of America has expanded into several new U.S. markets, with scale across the country positioning it ideally to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to increase investment substantially over the next few years without notably jeopardizing returns, driving further market share gains.
Note that Warren Buffett owns a stunning 1.1 billion shares of the bank.
The company posted stellar third-quarter results that beat expectations, with better-than-expected fixed-income trading results and very solid net interest income.
Shareholders receive a 2.40% dividend. Barclays has a $51 target price on Bank of America stock. The consensus target is $40.96, and shares closed on Thursday at $35.87 apiece.
Chevron
This integrated giant remains a safer way for investors looking to get positioned in the energy sector. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.
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