Before getting into the driving factor behind Warren Buffett stocks, let me tell you what it’s not. In fact, let me tell you the opposite of Oracle-of-Omaha-approved equities. You know those TikTok videos where people just start randomly dancing in public? That’s a thing. However, I have a feeling that this trend won’t last long.
Now, let’s look at the more rational side of life, Warren Buffett stocks for 2024. These ideas – stemming from the core holdings of Berkshire Hathaway (NYSE:BRK-B) – represent the investment theology if you will of arguably the best in the business. Here, you might be tempted to interject and say, isn’t there a so-and-so person that has this such-and-such system?
Obviously, you do whatever you want with your money. But what makes Oracle-endorsed ideas so compelling is that Buffett has been doing this for a long time. Indeed, he’s been doing this for longer than most of us have been alive.
That’s real knowledge, that’s a real system. On that note, below are Warren Buffett stocks to watch in 2024.
What it is: An integrated oil and gas giant, Chevron (NYSE:CVX) is one of the biggest hydrocarbon players in the world. Dependency on fossil fuels helps keep CVX in the discussion despite the trend toward clean and renewable energy sources.
Relevance: At face value, Chevron might not seem the most ideal play among Warren Buffett stocks to watch. After all, the political and ideological winds favor pivoting toward renewable energy infrastructures. Nevertheless, a recent Reuters report suggested that world oil demand next year could rise faster than many experts anticipate. With that, I’m going to trust the Oracle’s many decades of market wisdom.
Pros: Holistically, I think you’re getting great value with CVX stock. First, the company prints an above-sector-average three-year revenue growth rate of 18.1%. Aside from a few blips, it’s consistently profitable. Its trailing-year earnings multiple of 11.19x represents only a modest premium from the sector median of 9.27x. And it pays a forward dividend yield of 4.01%.
Cons: Shares slipped more than 13% this year so CVX may suffer from broader economic and geopolitical concerns.
What it is: A multinational payment card services firm, Visa (NYSE:V) is known everywhere for its transactional solutions. With more people turning to plastic to make ends meet, Visa is in the spotlight. That may be for a good reason ultimately but some significant risks remain.
Relevance: Earlier this year, Americans’ credit card debt level hit a record $1 trillion. Further, many cardholders owed over $1,500 on their cards. Of possible concern is that many carried a balance for at least one year. Again, this dynamic suggests that people are turning to credit cards to make their dollars stretch. Should interest rates decline, that could work out. If not, that’s a difficult matter to call.
Pros: If we look strictly at the financials and set aside the broader fundamentals, you’ll probably like what you see. It’s definitely one of the Warren Buffett stocks for 2024 if you don’t mind a higher risk profile. It features robust long-term revenue growth and excellent operating and net margins.
Cons: You’ll be paying a forward earnings multiple of 26.24x, which is overheated.
Sirius XM (SIRI)
What it is: A broadcasting corporation, Sirius XM (NASDAQ:SIRI) provides satellite radio and online radio services in the U.S. Once a powerhouse brand before the pandemic – for keeping drivers entertained during their morning (and afternoon) grind – Sirius suffered a conspicuous equity value decline post-pandemic.
Relevance: At first glance, SIRI doesn’t seem so relevant with the work-from-home pivot. However, many companies – even some ironic ones – have demanded their workers return to the office. And with many enterprises issuing mass layoffs, it’s not the smartest idea to stand out for the wrong reasons. So, that commute might return. Also, it’s hard not to notice that SIRI is up 46% in the trailing six months.
Pros: Financially, the company offers solid revenue growth and strong operating and net margins. It’s also consistently profitable with a perhaps surprising 1.94% forward dividend yield. Thus, while it’s speculative, it’s also one of the Warren Buffett stocks to watch.
Cons: This is a wildly risky investment idea so don’t let the Buffett aura dissuade you from conducting due diligence.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.