Key Insights
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Apple is set to experience substantial revenue growth with its latest iPhone models.
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Amazon is expected to expand alongside the growth of e-commerce and cloud services.
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Mastercard’s international presence will be a key driver of its continued impressive growth.
Warren Buffett, known as the “Oracle of Omaha,” is a renowned investor who has leveraged pragmatic investment strategies to turn Berkshire Hathaway(NYSE: BRK.B) into a trillion-dollar powerhouse.
Below are three Buffett-approved stocks worth considering and one to avoid.
Buffett’s Top Stock Choices
Despite recently reducing his stake, Apple(NASDAQ: AAPL) remains Berkshire’s most significant investment. Since Buffett first invested in 2016, Apple has yielded over 750% returns, excluding dividends. Before this year’s sale, Apple constituted over 25% of Berkshire’s total portfolio.
Strong Growth at Fair Prices
Buffett often emphasizes the value of acquiring exceptional companies at reasonable prices. Among U.S. companies valued above a trillion dollars, Berkshire Hathaway boasts the lowest valuation, marked at just 16.9 times trailing earnings. Moreover, Amazon(NASDAQ: AMZN) has seen a significant decline in its valuation from over 110 times earnings to 35.2 times today, making it an attractive option.
Global Expansion and Payment Processing
Mastercard(NYSE: MA) is a leader in the international payment-processing arena. With 1.1 billion cards issued globally, it accounts for 32% of the world’s credit cards. This widespread presence plays a crucial role in its potential for growth, especially as the U.S. market saturates.
A Cautionary Tale: Coca-Cola
Buffett’s longstanding investment in Coca-Cola(NYSE: KO) has generated substantial returns, yielding Berkshire $816 million annually from dividends. However, recent performances have not matched past successes, and while Coca-Cola continues to increase dividends, its growth has stagnated, rendering it a potential pick to avoid compared to Apple, Amazon, and Mastercard.
Final Thoughts on Investing
Before investing in Apple, consider that the Motley Fool Stock Advisor team has compiled a list of what they deem the 10 best stocks to buy now, and Apple is not among them. Opting for these selections could lead to significant returns in the coming years.
