If there was ever a loyal investor who could carry his businesses and investments well through tough times, it’s Warren Buffett.
In his latest letter to shareholders, he says he prefers owning stocks, entire companies to publicly traded shares, keeping most of his net worth in stock.
Why buy Warren Buffett stocks during volatile times? Let’s find out.
Why Buy Warren Buffett Stock Now?
Why Buy Buffett Stock Now? Buffett tends to invest in companies that have a stronghold regardless of how the economy is doing. You don’t need to look far – just Berkshire Hathaway, Buffett’s insurance and investment empire. Its strong insurance business, subsidiaries and strong corporate stakes mean it’s built like a tank in a missile strike zone. It’s a model to look up to, and emulating the way Buffett constructs his portfolio is another way to plan your own stock picks. (However, good luck. Buffett seems to have an omniscience that no one else has.)
Let’s take a look at Buffett’s top considerations before picking stocks and how his preferences can help optimize your portfolio:
- Business performance: How has the company performed? What is the long-term return on equity? If a company’s major competitors can’t keep up, it could be a good opportunity in that industry.
- Debt: If a company has significant debt, its profits will likely go to trying to deal with it, especially if growth comes from increased debt. Look for companies with permanently low levels of debt.
- Profit margins: Looking at profit margins over several years is one of the best ways to identify the right companies for your portfolio.
- Product uniqueness: What kind of competitive advantage does a company have that can help it outpace its competitors and its position in the market?
- Share discounts: How cheap are stocks? Companies that have good fundamentals but are trading below what they should – which are undervalued – offer the most profit opportunities.
Putting all of these considerations together results in the best combination of possibilities, even in times of volatility, and Buffett makes it a science.
3 Warren Buffett Stocks for Volatile Times
When you consider all the companies Buffett loves, it’s hard to pick just three. However, we did our best, especially in times of volatility.
We couldn’t exclude the Coca-Cola Company from the list. The Coca-Cola Company, a beverage company headquartered in Atlanta, Georgia, manufactures, markets and sells carbonated soft drinks, flavored and enhanced water and sports drinks, juices, dairy and herbal drinks. It also produces tea and coffee and energy drinks, as well as beverage concentrates and syrups. It also produces fountain syrups for fountain retailers like restaurants and convenience stores. It sells under the brands Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, Fanta, Fresca, Schweppes, Sprite, Thums Up, Aquarius, Ciel, dogadan, Dasani, glaceau smartwater, glaceau vitaminwater, Ice Dew , Brands I LOHAS, Powerade, Topo Chico, AdeS, Del Valle, fairlife, innocent, Minute Maid, Minute Maid Pulpy, Simply, Ayataka, BODYARMOR, Costa, FUZE TEA, Georgia and Gold Peak. It operates through a network of independent bottling partners, distributors, wholesalers and retailers as well as through bottling and distribution operators.
In the fourth quarter and full year of 2021, overall unit case volume increased 9% (in the fourth quarter) and 8% for the full year.
Net revenues increased 10% in the fourth quarter and 17% for the full year. Organic (non-GAAP) revenue increased 9% for the quarter and 16% for the full year. Operating profit decreased 28% for the quarter and increased 15% in 2021. In addition, full-year EPS increased 26% to $2.25 and comparable EPS ( non-GAAP) rose 19% to $2.32. Finally, operating cash flow was $12.6 billion for the full year, up 28%.
During the fourth quarter, the Company acquired the remaining 85% interest in BODYARMOR, a line of sports performance and hydration beverages. The company has also increased its focus on sustainability across the business with a new packaging target with a target of 25% reusable packaging by 2030.
Bank of America Corp., headquartered in Charlotte, North Carolina, is a bank and financial holding company. It provides banking and non-banking financial services. It operates through the Retail Banking, Global Wealth Management and Investments, Global Banking and Global Markets segments. The Retail Banking segment provides credit, banking and investment products and services to consumers and small businesses. The Global Wealth and Investment Management segment offers a comprehensive set of investment management, brokerage, banking and retirement products. The Global Banking segment manages loan-related products and services, integrated working capital management and client treasury solutions as well as underwriting and advisory services. The Global Markets segment includes sales and trading services as well as research for institutional clients in the fixed income, credit, currencies, commodities and equities sectors. Bank of America also has a segment consisting of asset and liability management business, equity investment, non-core mortgage and service business.
Among the highlights of the fourth quarter, net income rose 28% to $7 billion, or $0.82 per diluted share, as revenue grew faster than expenses. Revenue increased 10% to $22.1 billion and net interest income increased $1.2 billion, or 11%, to $11.4 billion. Non-interest revenue increased 8% to $10.7 billion and the provision for credit losses improved by $542 million.
DaVita Inc., headquartered in Denver, Colorado, provides medical care services through kidney dialysis services in the United States for patients with chronic kidney disease. The Company also offers pharmacy services, disease management services, vascular access services, clinical research programs, medical services, direct primary care, end-stage kidney disease and comprehensive care.
For the full year 2021, diluted earnings per share from continuing operations was $8.90, an increase of 39.3% over the prior year, and adjusted diluted earnings per share from sued was $9.13, an increase of 25.8% over the previous year. Fourth quarter diluted earnings per share from continuing operations was $1.79, an increase of 7.2% over last year and adjusted diluted earnings per share was $2.02, an increase 21.0% compared to the previous year.
Consolidated revenue was $2.944 billion for the quarter and $11.619 billion for the year end as of December 31, 2021.
Eliminate volatility with these picks
He reads annual reports cover to cover, notes details of company progress and identifies strategies. He is also famous for keeping company shares forever. Targeting these three gives you a solid strategy for volatile times.