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Legendary investor Warren Buffett is much more than a success story in the stock market. Dubbed the Oracle from Omaha for a lifetime of correct predictions about what companies to bet on, his philosophy and journey through the investment world is an open encyclopedia to those looking to learn and improve their stock-picking game.
In a nutshell, Buffett’s decades-long successful approach entails acquiring stocks considered undervalued yet with solid fundamentals at a discounted rate. These stocks are then retained as long-term investments, playing a crucial role in the ongoing accumulation of his wealth.
Based on the principles that guided the 93-year-old investor into becoming one of the wealthiest persons in the world, our ‘Best of Buffett‘ strategy aims to go a step further.
Utilizing state-of-the-art AI models, this strategy meticulously analyzes every stock in Buffett’s portfolio, identifying the top 6 stars from an already impressive selection. These stocks are evaluated on a quarterly basis, aligned with the disclosure of Berkshire Hathaway ‘s (NYSE:) 13F filings.
Historical data shows that our strategy would have safely beaten the by a wide margin over the last decade, as seen in the chart below:
Source: InvestingPro ProPicks
From this strategy, we will highlight two stocks: Procter & Gamble and The Coca-Cola Company, which are covered below in detail.
InvestingPro users can see the full strategy – along with the other five ProPicks strategies – on our ProPicks gallery page.
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1. Procter & Gamble (PG)
- InvestingPro Health Label: Good
- InvestingPro Fair Value: Fair (12.8% Upside)
- Forward P/E Ratio: 23.1x
- Dividend Yield: 2.6%
Procter & Gamble (NYSE:) provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care.
Shares are down 2.6% in the past month and 0.8% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Procter & Gamble is Fairly valued with 13.4% Upside.
Most recently, in November, Jefferies initiated coverage on Procter & Gamble with a Buy rating, writing:
“We think P&G will continue to drive peer-leading top and bottom-line growth over the next four years. Today’s strong fundamentals pave the way for a more durable earnings stream and ROIC profile while widening an already sizable competitive moat”.
In October, DZ Bank upgraded the stock to Hold from Sell.
Key recent news
In October, Procter & Gamble reported of $1.83 per share on revenue of $21.9 billion. Analysts were looking for $1.72 earnings on revenue of $21.57B.
The company also provided its guidance for fiscal 2024, expecting EPS in the range of $6.25-$6.43, compared to the consensus of $6.07.
2. The Coca-Cola Company (KO)
- InvestingPro Health Label: Great
- InvestingPro Fair Value: Fair (7.4% Upside)
- Forward P/E Ratio: 23.5x
- Dividend Yield: 3.1%
Coca-Cola (NYSE:) manufactures, markets, and sells various nonalcoholic beverages worldwide. The company provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages.
Shares are up 3.2% in the past month and down 4.9% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Coca-Cola is Fairly valued with 9.1% Upside.
Most recently, in November, Jefferies initiated coverage on Coca-Cola with a Hold rating and a price target of $64.00, writing:
Coke has momentum and underlying fundamentals are strong. A long runway of growth fueled by RGM, with further upside for the yet to be unlocked potential of its Total Beverage Strategy. There is a lot to like. However, at the current valuation we see limited upside (and limited downside) as the looming tax settlement ($24bn of equity at risk) may put a lid on shares, irrespective of the strength of their fundamentals.
Key recent news
In October, Coca-Cola reported of $0.74 per share on revenue of $12B. Analysts were looking for $0.70 earnings on revenue of $11.44B.
*Readers of this article can enjoy an exclusive 10% discount on our annual Pro+ plan with coupon code BB1, and a similar discount of 10% on the bi-yearly Pro+ plan by using coupon code BB2 at checkout!
