This is the second part on what stocks I am looking at. Part 1 dealt with stocks in the DJIA trading at or near 52 week lows. Next, I will look at stocks Warren Buffett or Berkshire Hathaway has bought according to Gurufocus.com.
Although studies have shown that following Buffett into stocks has been a good idea, I highly do not recommend following ANY guru into a stock. For example, think about the number of people who blindly followed Mohnish Pabrai or Martin Whitman in the last year. Plus, digging into a company’s 10-K will help anyone looking into a company get a better picture about the company and where its heading. Personally, I have followed the Oracle into a couple of holdings only after checking out the companies story. Finally, when it comes to pharma’s, Warren Buffett has stated he recommends buying a basket of them.
Kraft (KFT)- This one seems to be the one he is buying the most
Wells Fargo (WFC) – High Quality Bank
US Bank (USB) – Another high quality bank with great management
WellPoint (WLP)- Along with UNH , huge cash flow producers
UnitedHealth Group (UNH) – ^
Ingersoll-Rand (IR)- Also appears on Magic Formula screen
CarMax (KMX)- Haven’t looked into story
Glaxosmithkline (GSK)- Buy as basket
WABCO Holdings (WBC)- Have no idea
Bank of America (BAC)-
Sanofi-Aventis (SNY)- basket
US Gypsum (USG)- Moat will expand as competetors struggle with downturn
Lowes (LOW)- Will recover with economy
Also, there are several companies that Gurufocus does not list. I am guessing this is due to Warren Buffett purchasing the securities before GF was established. From the top of my head….
Moody’s (MCO)
American Express (AXP)
Coca-Cola (KO)
Proctor and Gamble (PG)
Disclaimer: I own PG and USB, I sold out of my holding in UNH a week ago.
{ 2 comments… read them below or add one }
Thank you very much for yr information
I’m still staying away from WFC, BAC or any individual banks, but am slowly dipping my toes into the XLF, where I can spread the risk. I’ll wait quite a bit longer before I throw money away on LOW. UNH and WLP will recover much faster then the builders, banks and home stores (LOW). SNY and GSK are ok, but I prefer ABT.