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- Warren Buffett stocks often outperform during downturns; consider buying in September’s market dip.
- InvestingPro’s ’Best of Buffett’ AI strategy identifies top 15 stocks quarterly with strong returns.
- Access 30+ InvestingPro strategies and tools for global market success and superior stock picking.
- Looking for actionable trade ideas to navigate the current market volatility? Subscribe here to unlock access to InvestingPro’s AI-selected stock winners.
As September begins, a month known for being tough on stocks, it’s a good time to look at "Warren Buffett stocks," which are the investments held by Berkshire Hathaway (NYSE:BRKb), the company led by the Oracle of Omaha.
Buffett’s stock picks, guided by his long-term value investment strategy, usually hold up better than average during market downturns and panics. Additionally, if these stocks drop significantly, it might be a smart move to buy them in anticipation of a potentially more positive fourth quarter.
So, we decided to examine Warren Buffett’s portfolio. We started by using InvestingPro’s "Ideas" section, which allows you to easily add Buffett’s portfolio to a Watchlist Pro with just one click.
Next, we set up the Watchlist to show the following details:
- Bullish potential based on InvestingPro’s Fair Value
- Bullish potential according to analysts’ average target
- Dividend yield
- Financial health score
First, we aimed to find Warren Buffett’s stocks with the most potential according to InvestingPro Fair Value. We identified 8 stocks that have an upside potential of over 15%.
Note: InvestingPro Fair Value provides an intelligent average of several well-known valuation models for each stock, helping us determine how much a stock might rise or fall compared to its fundamental value. Meanwhile, the health score evaluates a company’s financial health by looking at various financial metrics and comparing them with similar companies.
Specifically, these stocks have an upside potential ranging from 16.8% to 26.1% according to InvestingPro Fair Value. Among them, Lennar (NYSE:LEN) stands out as the only stock with an above-average financial health score of 2.77 out of 5.
In the past month, Lennar experienced a strong 12.9% increase, though UnitedHealth, another Buffett stock, outperformed with a 27.8% gain.
Additionally, two stocks from the list show considerable upside according to analysts: Constellation Brands (NYSE:STZ) with a 22.9% potential and Charter Communications (NASDAQ:CHTR) with a 55.4% potential.
Some of Buffett’s stocks seem promising now, and they might become even more attractive if September’s usual market downturn creates opportunities.
Alternatively, another approach to finding the best stocks in Buffett’s portfolio is by using artificial intelligence.
Can AI Help Pick Buffett Stocks?
Every three months, the ProPicks AI strategy, "Best of Buffett," available to InvestingPro subscribers, selects the 15 best stocks from the legendary investor’s portfolio.
The latest update was released on September 1, providing subscribers with a fresh list of opportunities to explore this fall.
The "Best of Buffett" strategy has a low-risk profile, featuring a Sharpe ratio of 0.87 and a 12-year return of about 460%, which is 330% higher than the S&P 500 over the same period.
Lastly, the "Best of Buffett" strategy is just one of many ProPicks AI strategies offered to InvestingPro subscribers.
There are over 30 thematic and regional strategies available, with plans for even more in the future. These strategies cover US, European, and emerging markets, each with compelling performance records.
Unlike the "Best of Buffett" strategy, which is updated quarterly, the other ProPicks AI strategies are re-evaluated monthly, on the 1st of each month.
Finally, it’s important to note that the features mentioned in this article are just a few of the many tools InvestingPro offers for market success. InvestingPro provides a comprehensive range of tools to help investors react to market conditions effectively, including:
- A highly powerful stock screener with access to over 1,200 metrics and tens of thousands of stocks
- 10 years of historical financial data for thousands of global stocks
- A database of positions held by investors, billionaires, and hedge funds
- Exclusive analysis and stock-picking articles for subscribers, where our analysts simplify the process by offering ready-made stock selections
These tools are designed to help investors outperform the market every day.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.