Warren Buffett's Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B) didn't beat the S&P 500 in 2023. But several of the stocks in Berkshire's portfolio did.
Some of those highfliers are poised to perform well in 2024, too. Here are three no-brainer Buffett stocks to buy right now.
1. Amazon
Amazon(NASDAQ: AMZN) stock skyrocketed over 80% in 2023. The jaw-dropping gain was fueled, in part, by a surge in investors' interest in generative artificial intelligence (AI).
It also helped quite a bit that Amazon delivered impressive earnings growth. I expect both catalysts from last year will provide tailwinds in 2024, too.
AI is arguably the greatest technological innovation in modern times. That's saying a lot, considering that the personal computer, the internet, and the smartphone were launched over the last 50 years. Amazon is poised to benefit tremendously from AI as the world's largest cloud services provider.
For much of its history, Amazon wasn't focused all that much on its bottom line, but that's changed. The company has streamlined its operations. It's using robots to boost warehouse efficiency and rolling out ads on Prime Video to help make the business profitable. Amazon should reap the rewards from these efforts in the new year.
Sure, someone within Berkshire Hathaway (probably not Buffett himself) trimmed the conglomerate's stake in Amazon a little in 2023. I won't be surprised if that relatively small sale looks like a mistake in hindsight.
2. D.R. Horton
Buffett didn't initiate many new positions last year. However, he did buy several stocks of homebuilders. D.R. Horton(NYSE: DHI) is the biggest of the bunch. The company has been the largest U.S. homebuilder, based on volume, since 2002.
Buying D. R. Horton has already paid off nicely for Buffett. The stock soared 70% in 2023. I predict that it will move even higher this year for three key reasons.
First, the U.S. is still in the grips of a significant housing shortage. Global real estate developer and investment company Hines estimates that another 3.2 million homes are needed to meet existing demand.
Second, there's a good chance that interest rates will decline later this year. The Federal Reserve has already indicated that multiple rate cuts could be on the way. This will help make new homes more affordable for borrowers -- great news for D.R. Horton.
Third, the stock remains attractively valued despite its huge gain in 2023. D.R. Horton's shares trade at a forward price-to-earnings ratio of only 11.6. That's dirt cheap compared to many stocks.
3. Mitsui
Buffett's longtime business partner Charlie Munger passed away in November, just weeks before he would have celebrated his 100th birthday. Earlier in 2023, Munger called Berkshire's investments in five Japanese trading houses as "no-brainer" moves. Of those stocks, Mitsui(OTC: MITSF)(OTC: MITSY) looks especially attractive right now.
Mitsui was another nice winner for Buffett last year. Shares of the Japanese conglomerate jumped 28%. Could the momentum continue? I think so.
In the U.S., inflation appears to be moderating, unemployment remains low, and there's the aforementioned possibility of lower interest rates. Good news for the U.S. economy is usually good news for the global economy. And that's encouraging for Mitsui, which operates over 500 businesses across the world spread across a wide range of industries.
Like D.R. Horton, Mitsui's shares still look cheap, even after delivering a solid gain last year. The stock's trailing 12-month price-to-earnings multiple is under 7.8. Mitsui also offers an attractive dividend yield of nearly 3% that will help boost its total return in 2024.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon and Berkshire Hathaway. The Motley Fool has positions in and recommends Amazon and Berkshire Hathaway. The Motley Fool has a disclosure policy.
