As one of the world’s most successful investors, it is no surprise that Warren Buffett stocks are high on investors’ radar. The “Oracle of Omaha” invests in several blue-chip companies and has a history of picking long-term winners. This has gained Buffet a loyal following as many look to his investment strategy to guide their investment choices.
Buffett invests through his company Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), which has seen unparalleled success over the years. BRK stock is up 111% in the last five years, steadily outperforming the S&P 500. And, much of this success can be attributed to Buffett’s long-term investment strategy. At times, he holds a stock for decades. In fact, Buffett is as saying his favorite holding period is forever, reflecting his commitment to investing for the long haul.
Given Berkshire Hathaway’s phenomenal performance, it is worth looking at some of its biggest holdings for investment opportunities.Let’s delve into three stocks to buy in August.
Coca-Cola (KO)
Coca-Cola’s (NYSE:KO) iconic red branding and loyal customer base have made it one of the most well-known companies of the century. While it is perhaps most famous for its namesake product, the company has expanded its portfolio beyond sodas over the years.
Today it owns several brands including Costa Coffee, Topo Chico and Minute Maid. These acquisitions have helped Coca-Cola dominate the beverage industry and appeal to a wider consumer base.
Moreover, the company’s financials reflect its success. In its Q2, KO reported strong earnings with revenue at $12.36 billion over the anticipated $11.76 billion. Earnings per share came in at 84 cents versus the expected 81 cents. This was fueled by a 3% increase in the sales volume of its flagship product and a 2% volume growth in its juice, dairy and plant-based business. Coca-Cola anticipates this momentum will continue, raising full-year guidance on revenue growth from 9% to 10% from a prior forecast of 8% to 9%.
KO is among the top Warren Buffett stocks with the investor owning 400 million shares. The company constitutes 7.48% of Berkshire Hathaway’s portfolio.
Visa (V)
Few companies are a better buy than fintech giant Visa (NYSE:V). It plays a pivotal role in the payment economy with its extensive credit card network that serves as a partner between merchant banks and financial institutions. Visa’s major source of revenue is the fees on transactions using its branded cards. Naturally, the firm is a major beneficiary of the ongoing shift to a fully cashless society.
As the world’s largest payment network, Visa’s strong market position was evident in its recent earnings report. In its third quarter, revenue grew 10% to $8.9 billion while earnings per share (EPS) was up 12% year-over-year (YOY). However, payment volume only grew 7% below the 8% to 9% range in the last four quarters. Visa attributed the decline to lower consumer spending.
Despite the macroeconomic headwinds, Visa’s strong fundamentals make this stock a strong buy. The company plans to diversify its business beyond payment transactions, which will translate to higher earnings in the future.
Given its potential, it comes as no surprise that V is among the top Warren Buffett stocks. The investor holds a $2.2 billion stake in the company and shares are up a whopping 1300% since his initial investment in 2011.
American Express (AXP)
American Express (NYSE:AXP) may not lead the charge on payment volumes. But, its brand exclusivity and premium membership have amassed a loyal customer base. As opposed to the mainstream credit card companies, AMEX’s high transaction fees and customer rewards programs tend to attract an affluent customer base. More recently, the company has also seen strong demand from younger Millennials and Gen Z. This indicates an opportunity for greater growth in this emerging segment.
The ongoing momentum in consumer spending was fairly evident in its second-quarter numbers. Earnings for the period grew 44%, reaching its all-time high while revenue rose 8%. Looking ahead, American Express anticipates its planned $6 billion spend on marketing initiatives will result in a 9% to 11% increase in revenue growth for the year. The impressive results underscore AXP’s ability to remain dominant in the competitive payments space.
Buffett, known for investing in companies with a strong brand presence, is a long-time shareholder of American Express. He holds 152 million AXP shares which accounts for 9.5% of his portfolio. This is one of the top Warren Buffett stocks to buy this month for investors seeking a long-term play.
On the date of publication, Divya Premkumar 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.