N※N

Show Stocks and Investing Publications

2 Warren Buffett Stocksto Buy Hand Over Fistin August The Motley Fool

3 Warren Buffett Stocks to Buy Hand Over Fist in August

Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has long been revered for his value investing approach, focusing on companies with strong fundamentals, durable competitive advantages, and reasonable valuations. His portfolio, managed through Berkshire, serves as a blueprint for many investors seeking long-term wealth creation. In a market environment marked by volatility, economic uncertainties, and shifting interest rates, turning to Buffett's picks can provide a sense of stability. This month, three standout stocks from his holdings—Apple (AAPL), American Express (AXP), and Coca-Cola (KO)—present compelling opportunities to buy hand over fist. These aren't just random selections; they embody Buffett's principles of investing in businesses with wide moats, consistent earnings, and the ability to weather economic storms. Let's dive into why these stocks are worth considering right now, exploring their business models, recent performance, and future prospects in detail.

Starting with Apple, which has been a cornerstone of Berkshire Hathaway's portfolio since Buffett first invested in 2016. As of the latest filings, Berkshire holds a massive stake worth tens of billions, making it one of the largest positions. Apple's appeal lies in its ecosystem dominance, blending hardware innovation with a services juggernaut that generates recurring revenue. The iPhone remains the flagship product, but the real magic is in the App Store, Apple Music, iCloud, and Apple TV+, which together form a sticky user base of over a billion active devices worldwide. In recent quarters, Apple has demonstrated resilience amid global supply chain disruptions and inflationary pressures. For instance, its services segment grew by double digits year-over-year, offsetting any slowdown in hardware sales due to economic headwinds. Buffett loves companies with pricing power, and Apple exemplifies this—able to command premium prices while maintaining customer loyalty. Valuation-wise, the stock trades at a forward price-to-earnings (P/E) ratio that's reasonable compared to its growth trajectory, especially with the anticipated rollout of AI-enhanced features in upcoming iOS updates. Analysts project continued expansion in emerging markets like India and Southeast Asia, where smartphone penetration is still growing. Moreover, Apple's commitment to shareholder returns through dividends and massive buybacks aligns perfectly with Buffett's preference for capital allocation that benefits owners. If the broader market dips due to recession fears, Apple's cash-rich balance sheet—over $60 billion in net cash—positions it to acquire talent or technologies opportunistically. For investors looking to buy in August, any short-term pullback from all-time highs could be an ideal entry point, echoing Buffett's famous advice to be greedy when others are fearful.

Next up is American Express, a financial services giant that Buffett has held since the early 1990s, with Berkshire owning about 20% of the company. This stock represents Buffett's affinity for businesses with network effects and brand strength. Amex operates in the payments industry, but unlike competitors Visa or Mastercard, it functions as both a card issuer and a network, allowing it to capture fees from both merchants and cardholders. This closed-loop system creates a powerful moat, particularly among affluent consumers who value perks like travel rewards, concierge services, and exclusive partnerships. In the current economic climate, where consumer spending is under scrutiny, Amex has shown impressive durability. Its latest earnings report highlighted robust growth in billed business, up significantly year-over-year, driven by international expansion and millennial/Gen Z adoption through products like the Platinum Card. Credit quality remains strong, with delinquency rates well below industry averages, thanks to Amex's focus on high-credit-score customers. Buffett appreciates the company's ability to generate high returns on equity—often exceeding 30%—without excessive leverage. Looking ahead, trends like the shift to digital payments and contactless transactions play to Amex's strengths, with investments in technology enhancing fraud detection and user experience. The stock's dividend yield, while not the highest, is reliable and growing, fitting Buffett's criterion for companies that pay you to wait. At current valuations, Amex appears undervalued relative to its earnings potential, especially if interest rates stabilize and travel spending rebounds fully post-pandemic. For August buyers, this stock offers a blend of growth and defense, making it a hand-over-fist pick in uncertain times.

Finally, Coca-Cola stands as a timeless Buffett favorite, with Berkshire's stake dating back to 1988 and now valued at over $20 billion. This beverage behemoth epitomizes the "buy and hold forever" strategy, thanks to its unparalleled brand portfolio including Coke, Sprite, Dasani, and Powerade, distributed across more than 200 countries. The company's moat is built on distribution might—think of the ubiquitous red trucks and vending machines—and marketing prowess that keeps it top-of-mind for consumers. In recent years, Coca-Cola has adapted to health trends by expanding into non-carbonated drinks like vitaminwater and plant-based options, while also optimizing its supply chain for efficiency. Financially, it's a cash flow machine, generating billions in free cash flow annually, which supports a juicy dividend yield north of 3% and consistent share repurchases. Buffett often cites Coke as a prime example of a business where you can predict earnings a decade out, given its predictable demand and pricing power. Amid inflation, Coke has successfully passed on costs without losing volume, as evidenced by solid organic revenue growth in emerging markets. Challenges like sugar taxes and competition from niche brands exist, but Coke's scale allows it to innovate and acquire threats, such as its ventures into energy drinks and coffee. For investors in August, the stock's current P/E multiple suggests it's trading at a discount to historical averages, potentially offering upside if global economies recover. Buffett's long-term holding underscores the power of compounding with dividend aristocrats like this one.

In summary, these three stocks—Apple, American Express, and Coca-Cola—encapsulate Warren Buffett's investing wisdom: focus on quality businesses at fair prices. They're not immune to market fluctuations, but their fundamentals provide a margin of safety. With Berkshire's recent moves, like trimming some positions amid high valuations, these core holdings remain buys. Investors buying hand over fist in August could position themselves for substantial long-term gains, much like Buffett has done for decades. Remember, successful investing requires patience and a contrarian mindset—qualities these picks reward handsomely. (Word count: 928)

Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/08/06/3-warren-buffett-stocks-to-buy-hand-over-fist-in-a/ ]