If you asked Warren Buffett what stocks to buy right now, he would probably tell you to buy an S&P 500 index fund. Moreover, Buffett recommends buying this low-cost index consistently, whether the market is up or down, as it tends to even out over time. Most people might not consider this the most exciting investing advice, but it’s excellent and abates the traditional risk behind stock selection. But what if you wanted to mirror your portfolio to Buffett’s? Then, you might want to start by figuring out some of the best Warren Buffett stocks to buy right now.
Buffett also asserts that investing is incredibly simple, but I tend to disagree, mostly due to another piece of advice often attributed to the Oracle of Omaha: “Only invest in what you know.” This statement conflicts with the idea of buying a broad index fund covering hundreds of companies you could never keep track of at all times.
Thus, let’s examine some of Buffett’s recent best performers, which have buy ratings to back them up.
Bank of America (BAC)
The second largest bank in the United States by total assets and domestic deposits, Bank of America (NYSE:BAC) is one of Buffett’s biggest portfolio pillars. The banking giant makes up 11.8% of the Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) portfolio and for good reason. It consistently prioritized its earnings since the 2008 housing crisis nearly brought it down.
In the 15 years since the crisis, the company has gone from a low of $4 billion in net income to a recovery of $26.5 billion in 2023. However, the company has, on average, underperformed the S&P 500 by 41.9% over the last 10 years. Part of why Buffett has seen such success with Bank of America stock is by buying it at the right time.
He held an initial position before the 2008 crash, which he then doubled down on in 2011, greatly expanding the company’s position in his portfolio. Nowadays, Bank of America represents one of the best Warren Buffett stocks to buy because of its ability to consistently deliver and anchor a portfolio.
Coca-Cola (KO)
If only investing in what you know is the safest way to go, then Coca-Cola (NYSE:KO) is probably one of the better options. I’ve recommended the stock before this year, back in early March, and I’m sticking to it because it’s up roughly 7% since then. Bear in mind, that performance is in spite of the troubles the market endured in April due to the realization that rate cuts aren’t coming any time soon.
For me, my faith in Coca-Cola comes from a different perspective beyond the financials. After all, even if Coca-Cola found a way to sell its drinks to every human on earth, every single day, it would eventually reach a limit to those earnings. I believe the most valuable thing about Coca-Cola is the ubiquity of its brand.
The company strategically licensed its formula around the world to local beverage makers and was able to scale the cost of its production to fit nearly any country. That’s why you can buy a Coke anywhere from Times Square, New York to a rural hospital in Karuma, Uganda, and beyond. Buffett consistently champions KO stock, and it now makes up 7.4% of Berkshire Hathaway’s portfolio.
American Express (AXP)
Coming as Buffett’s third largest holding, making up 10.4% of Berkshire Hathaway’s portfolio, is American Express (NYSE:AXP). It’s also another stock I’ve recommended in the past, especially because it’s a standout on the Dow Jones Industrial Average and will likely continue to perform well into the future.
I carry this sentiment because the company built an exceptionally lucrative image for itself over the last few years as a premium offering in the credit card market. Between its metal credit cards, associations with precious metals and exclusive cardholder perks, AXP cemented itself as a luxury credit card in the minds of spenders around the world. After all, who doesn’t want to feel luxurious while spending money?
For Buffett, AXP has helped hedge against underperformance in other sections of his portfolio thanks to its 16% outperformance of the S&P 500, and its likelihood to keep growing this decade as more Americans turn to credit cards to manage their finances.
On the date of publication, Viktor Zarev 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.
