Warren Buffett, the chairman and CEO of holding company Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), is arguably the world’s greatest stock picker, having amassed a huge portfolio that’s today worth just over $370 billion. However, as good as Buffett is, there are many stocks he has missed out on and some he sold too early which he likely wishes he still held in his portfolio. Over the years, Buffett has complained about missing out on stocks such as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), being late on others such as Apple (NASDAQ:AAPL), and selling many stocks that have gone on to reach new heights. In the end, Buffett is an investor like the rest of us and has his share of regrets. These are some of the stocks Warren Buffett would envy.
Chipotle Mexican Grill (CMG)
Chipotle Mexican Grill (NYSE:CMG) exhibits many of the qualities that Buffett says he looks for when investing in a company. It’s a well-managed business that specializes in Mexican cuisine and has a strong competitive moat. Chipotle also has a loyal customer base and pricing power, or the ability to raise prices without losing its clientele.
Buffett might raise an eyebrow at the valuation of CMG stock which is trading at 65 times forward earnings. But he would no doubt like the stock’s growth. Chipotle’s share price has risen 330% in the last five years, including an 80% gain in the past 12 months. That’s stronger than many tech stocks. While Chipotle doesn’t pay a dividend, the company did just announce a 50-for-1 stock split that will make the shares more accessible to investors.
JPMorgan Chase (JPM)
Buffett is a big fan of bank stocks and he has owned shares of JPMorgan Chase (NYSE:JPM) at various times. In fact, Buffett built a sizable stake in the lender back in 2018 but exited the position in late 2020 as inflation rose. There’s speculation that JPMorgan might be the mystery stock that Buffett is currently building a position in. But regardless of whether he owns it or not, JPM stock is certainly one that Buffett would envy.
A well-known dividend collector, Buffett would certainly like that JPMorgan has raised its quarterly dividend payout to shareholders twice in the last six months, taking it to $1.15 per share and a yield above 2%. JPM stock is also relatively inexpensive trading at 11 times future earnings estimates. And the share price is on an upswing, having risen 52% in the past year, including a 15% year-to-date gain.
Costco Wholesale (COST)
Costco Wholesale (NASDAQ:COST) is another stock that Buffett has owned in the past but he ended up selling it. The move surprised many people, especially since his late business partner Charlie Munger sat on Costco’s board of directors and was a vocal fan of COST stock. Buffett would surely like Costco’s recurring membership fees, customer renewal rate of 92%, and competitive advantage.
Buffett would also like the strength and consistency of Costco’s management team. The company just announced the appointment of a new CEO, which is only the third one in Costco’s 40-year history. And Buffett would certainly like that Costco frequently pays its shareholders special, one-time dividends. On Jan. 12 this year, Costco paid a special cash dividend of $15 per share. Many analysts saw COST stock as the perfect Buffett holding.
Buffett held a position in COST stock from 1999 until June 2020, when he sold 4.3 million shares that was then valued at $1.3 billion. As is almost always the case, Buffett didn’t comment on the sale of the stock but there has been speculation that the valuation got too high for the Oracle of Omaha’s liking. Whatever the reason, Costco’s stock has more than doubled since Buffett offloaded it nearly four years ago.
On the date of publication, Joel Baglole 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.
