Warren Buffett's holding company, Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B), is one of the largest companies in the world. Investors follow the buys and sells for its equity portfolio, which typically owns around 45 stocks and is worth nearly $294 billion right now.
Buffett didn't get there by chasing growth stocks. He leans heavily toward value stocks, with an emphasis on financial stocks and dividend payers, although there's an occasional growth stock, too.
If you have $300 to spend after paying off debt and saving for an emergency fund, you might want to consider some excellent Buffett stocks. Amazon(NASDAQ: AMZN), American Express(NYSE: AXP), and Nu Holdings(NYSE: NU) are three top picks.
1. Amazon: The no-brainer
Amazon is not your typical Buffett stock, and Berkshire Hathaway first took a position in the e-commerce giant in 2019, well after it had already minted millionaires. In typical Buffett style, though, that didn't stop him from buying in at that point. Buffett loves established leaders with excellent management, and Amazon fits the bill, at least in that respect.
With its dominant position in two businesses that have enormous potential, Amazon still has a lot to offer investors, even at this later stage. Its lead in e-commerce is so wide that it would take a monumental effort for any competitor to get close in any near time frame -- it accounts for more than a third of all U.S. e-commerce dollars. It's doing everything it can to strengthen its position and expand its lead, and its obsessive focus on delivery speed is itself a moat that creates an upward, positive cycle. The more products it adds to the platform, the faster it delivers orders, and the more customers who rely on it together, leading to even higher sales, and the cycle continues.
Cloud computing through Amazon Web Services is a similar story, and although its lead isn't as wide as in e-commerce, its position is still unparalleled, and it's taking many actions to keep things that way. Most notable these days is its investments in artificial intelligence (AI), in both the services that it offers its broad range of clients and the development of its own processing chips to meet every budget and demand.
As large as it is, the runway is long. If you have $300 to spend and don't yet own Amazon stock, it's a stock that could fit almost any kind of portfolio.
2. American Express: The dividend payer
American Express is one of Buffett's longest-held and best-loved stocks, one he said he'd never sell. With the recent sales of Apple and Bank of America stock, American Express has jumped to the second-highest position in the portfolio at 14.8%. Berkshire Hathaway owns a whopping 21.5% of American Express' stock.
American Express is the classic Buffett stock, with everything he looks for in an excellent business and stock. It has some elements of a bank stock, including the large cash stockpile that Buffett loves, but it has a differentiated business that targets a resilient, affluent customer base. It charges annual fees for many of its credit cards, ensuring a steady and reliable revenue stream, and it has built up a loyal fan base that trusts its products. As a credit card network, it grows along with the economy.
Although it has felt some pressure from the economic volatility that's been going on for years now, it continues to demonstrate profitable growth and popularity with new customers. Younger consumers are its fastest-growing cohort by age, and it has refreshed 40 cards since the beginning of the year to attract business from this group. Capturing them at this age gives American Express the opportunity to grow with them.
As inflation moderates and the economy looks like it's picking up, American Express should benefit from near-term headwinds. But it has all the elements of a top forever stock.
3. Nu Holdings: The rare growth pick
Buffett doesn't typically take chances on young tech stocks, but he invested in Nu even before it went public as it stormed across Brazil, opening up new options for the underbanked population. It was clear even then that this was a business with tremendous potential, and it has demonstrated incredible growth and sustained profitability since its initial public offering in 2021--revenue has increased more than 1,000% since then.
Like American Express, Nu has some elements of a bank stock, but it's not a standard bank stock. It's an all-digital bank, and its reliance on technology is a serious advantage that has changed the financial landscape in Brazil. It's on its way to transforming the landscape in Mexico and Colombia, where it has recently opened shop.
In addition to bank accounts, Nu has a full financial services app that provides credit cards and other credit products. These are performing well and boosting profitability, and they further the company's strategy of cross-selling new products and generating higher engagement. Nu is still a fresh face on the scene, and it has years of growth ahead as its platform gains popularity and members. If you have an appetite for risk, Nu looks like a stock whose positives outweigh the perceived risks of a new, high-growth stock.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,818!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,221!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $451,527!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of November 11, 2024
Bank of America is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express, Apple, and Nu Holdings. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.
