Warren Buffett is so good at picking winning businesses that he grew Berkshire Hathaway’s book value by more than 19.1% annually between 1965 and 2017. That astounding track record easily qualifies him as the greatest investor of all time.
So which of Buffett’s stocks do we Fools think are great buys right now? We asked a team of Motley Fool investors to weigh in and they picked the following stocks:
Top 5 Value Stocks To Watch Right Now: Clarke(T)
AT&T Inc. (NYSE:T) delivered decent, if not outstanding, earnings the other day. Investors sold the stock off. AT&T stock is trading at $31.54. Along with a yield that now exceeds 6%, I think we are going to see income investors and bottom fishers step in here.
More to the point, the antitrust trial regarding AT&T’s merger with Time Warner Inc (NYSE:TWX) is over. By all accounts, including my own, AT&T probably crushed the DOJ in the trial. The judge will rule on the case by June 12, and I believe the merger will go through. With that, AT&T will transform into a completely different company and become a great member of the growth stocks community. As a result, this combined entity will be a media and advertising powerhouse.
Even if the merger is not approved, not only T but also TWX remain excellent media companies. You can buy either entity here for growth for your portfolio.
Top 5 Value Stocks To Watch Right Now: Southern Company (SO)
Southern Co (NYSE:SO) announced a 3% raise to its quarterly dividend, increasing it from 58 cents per share to 60 cents. Shareholders of record as of May 21 will receive their higher dividends from the regulated electric and gas utility on June 6 Therefore, SO shares will be ex-dividend on May 18.
SO Dividend Yield: 5.28%
Top 5 Value Stocks To Watch Right Now: Grupo Aeroportuario Del Pacifico, S.A. de C.V.(PAC)
In fact, foreshadowing again — spoiler alert — this is the one stock that has underperformed the market. It’s still up 9%, but Grupo Aeroportuario del Pacifico — or PAC is the ticker symbol — the company that is the leading operator of airports in Mexico was at $100 a share a year ago. It’s up to $109 today. So, simple math is a 9% gain.
And so, against the S&P 500 of +15%, that’s a -6%. So, this one’s in the loss column. I don’t have a lot to say about PAC other than this is a stock that we’ll continue to recommend. It’s a very hard business to compete with. They basically operate these airports with a contract with the government, and they get to run all the concessions and the mall within the airport. That’s all part of this business.
I like the stock a lot and it’s recovered pretty well since diving right after President Trump was elected and Mexico fell out of favor for a couple of months. If Mexico were a stock for the long term, I’m a buyer and one way you can participate in Mexico’s growth over the next couple of decades would be through a stock like Grupo Aeroportuario del Pacifico. Again, pronounced by somebody who took French in high school.
Top 5 Value Stocks To Watch Right Now: Concho Resources Inc.(CXO)
RBC Capital’s Scott Hanold wrote “Time to Flex Your Muscles” on our second energy stock pick. Concho Resources Inc (NYSE:CXO) is now poised to become the biggest player in the Permian Basin. Earlier in April, Concho announced a $9.5 billion deal to snap up fellow Permian fracker RSP Permian.
According to Concho, this deal “creates the largest crude oil and natural gas producer from unconventional shale in the Permian Basin.” Specifically, JPMorgan analyst Arun Jayaram is forecasting 23% annual production growth through 2021 and “significant” free cash flow generation. To top it all off: management is modelling for an impressive $2 billion in acquisition synergies. After the deal closes in Q3, these efficiencies should materialize quickly says management.
In his post-announcement report, Hanold tells clients he is impressed by the ‘complimentary’ deal. He notes that “our well data shows RSPP wells are among the most prolific, portending to improving returns.” As a result: “Core activity should generate industry-leading returns, margins, and growth. CXO has a well-established asset base and is one of the largest producers and the most active operator in the Permian Basin. We think this scale provides significant advantages over its peers.”
According to the Street there is still big upside potential of 25% from current prices. This is based on the stock’s average price target of $186. Plus, our data shows that in the last three months, 11 out of 12 analysts have rated the stock a ‘Buy’.
Top 5 Value Stocks To Watch Right Now: Texas Instruments Incorporated(TXN)
Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. It functions as one of the top players in the analog IC and embedded processor fields. The company has also developed into a major IoT pick, reporting year-over-year sales growth of 20% in the unit that handles this business during its most recent quarter.
Meanwhile, the semiconductor firm surpassed revenue estimates and released in-line guidance. This has led to more bullish analyst sentiment and propelled the stock to a Zacks Rank #1 (Strong Buy). The stock also has a Forward P/E of 20.5 and a PEG of 2.1, so investors are getting a decent price for its earnings and earnings growth outlook.
It is also worth noting that TXN offers investors a dividend yield of about 2.3% right now.