N※N

Show Stocks and Investing Publications

5 No-Brainer Warren Buffett Stocks to Buy Right Now | The Motley Fool

Why Warren Buffett's Berkshire Hathaway Remains a Top Stock Pick for Long-Term Investors

In the ever-evolving world of investing, few names command as much respect and attention as Warren Buffett. The Oracle of Omaha, as he's affectionately known, has built a legendary career through his leadership at Berkshire Hathaway, transforming it from a struggling textile company into a sprawling conglomerate worth hundreds of billions of dollars. A recent analysis from investment experts highlights why Berkshire Hathaway (NYSE: BRK.A, BRK.B) itself stands out as one of the most compelling "Warren Buffett stocks" to buy right now. This isn't just about following the crowd or chasing trends; it's about understanding the timeless principles that have made Buffett's approach so successful. In this extensive summary, we'll dive deep into the reasons why Berkshire Hathaway deserves a spot in your portfolio, exploring its business model, recent performance, key holdings, and the broader economic factors that position it for future growth.

At its core, Berkshire Hathaway embodies Buffett's investment philosophy: buy wonderful businesses at fair prices and hold them for the long term. Unlike many modern conglomerates that chase quarterly earnings or flashy tech innovations, Berkshire operates as a holding company with a diverse portfolio of subsidiaries and equity investments. This structure provides stability and resilience, allowing it to weather economic storms that might cripple more specialized firms. The company's insurance operations, led by giants like GEICO and Berkshire Hathaway Reinsurance, form the backbone of its cash-generating machine. These businesses produce what's known as "float" – premiums collected upfront that can be invested before claims are paid out. Buffett has masterfully used this float to fund acquisitions and investments, turning insurance into a profit center rather than a liability.

One of the most appealing aspects of Berkshire Hathaway is its sheer diversification. The company owns outright businesses across industries, including railroads (BNSF Railway), energy (Berkshire Hathaway Energy), manufacturing (like Precision Castparts), and consumer goods (Duracell, Dairy Queen, and Fruit of the Loom). This mix ensures that no single sector's downturn can derail the entire enterprise. For instance, during the COVID-19 pandemic, while travel and retail suffered, Berkshire's utility and insurance arms provided steady cash flow. More recently, with inflation and supply chain disruptions challenging many companies, Berkshire's broad exposure has allowed it to capitalize on pockets of strength, such as rising energy demands and infrastructure spending.

Beyond its wholly owned subsidiaries, Berkshire's equity portfolio is a treasure trove of blue-chip stocks that reflect Buffett's value investing ethos. Apple (NASDAQ: AAPL) remains the largest holding, accounting for a significant portion of the portfolio's value. Buffett's initial investment in Apple back in 2016 has ballooned thanks to the tech giant's dominance in consumer electronics and services. Despite occasional market volatility, Apple's strong brand, recurring revenue from services like Apple Music and iCloud, and massive cash reserves make it a quintessential Buffett pick – a company with a wide economic moat that protects it from competitors. Similarly, holdings in Coca-Cola (NYSE: KO) and American Express (NYSE: AXP) showcase Buffett's preference for timeless brands with predictable earnings. Coca-Cola's global reach and pricing power have allowed it to navigate economic cycles, while American Express benefits from the shift toward digital payments and its affluent customer base.

Buffett's recent moves provide further insight into why Berkshire is an attractive buy. In the past few years, he's been aggressively repurchasing Berkshire shares, signaling his belief that the stock is undervalued. Since 2018, the company has spent tens of billions on buybacks, reducing the share count and boosting earnings per share for remaining investors. This strategy aligns perfectly with Buffett's mantra of allocating capital wisely – when attractive acquisitions are scarce, buying back undervalued shares is a smart alternative. Moreover, Berkshire's cash hoard, which often exceeds $100 billion, gives it immense flexibility. In an era of high interest rates and economic uncertainty, this war chest positions Berkshire to pounce on distressed assets or undervalued companies during market downturns, much like it did during the 2008 financial crisis with investments in Goldman Sachs and General Electric.

Financially, Berkshire Hathaway continues to impress. Its book value, a key metric Buffett emphasizes, has grown at a compound annual rate of around 20% since he took control in 1965 – a staggering achievement that outpaces the S&P 500. While the company's size makes replicating such growth challenging, recent quarters show operating earnings climbing, driven by strong performances in insurance underwriting and non-insurance businesses. For example, in the latest reported period, insurance profits surged due to favorable catastrophe trends and disciplined pricing. Critics sometimes point to Berkshire's lack of dividends as a drawback, but Buffett argues that reinvesting profits internally yields better long-term returns than payouts, especially given the company's track record of compounding value.

Looking ahead, several macroeconomic trends play to Berkshire's strengths. The push for infrastructure development in the U.S., fueled by legislation like the Infrastructure Investment and Jobs Act, benefits BNSF Railway and Berkshire Hathaway Energy. As the world transitions to renewable energy, Berkshire's investments in wind, solar, and transmission lines position it as a leader in this space. Additionally, with inflation persisting in many economies, Berkshire's pricing power across its businesses – from candy (See's Candies) to furniture (Nebraska Furniture Mart) – allows it to pass on costs without losing market share. Geopolitical tensions and supply chain realignments could also create opportunities for Berkshire to acquire international assets at bargain prices, expanding its global footprint.

Of course, no investment is without risks. Berkshire's performance is closely tied to Buffett's health and succession planning. At 94 years old, Buffett has named Greg Abel as his successor, a move that has reassured many investors given Abel's deep operational experience. There's also the risk of regulatory scrutiny, particularly in insurance and energy sectors, and the potential for market corrections to impact its equity holdings. However, Berkshire's conservative balance sheet, with minimal debt and a focus on high-quality assets, mitigates these concerns. The stock's valuation, often trading at a reasonable multiple of book value (around 1.5 times recently), suggests it's not overpriced compared to growth-oriented tech stocks.

For individual investors, buying Berkshire Hathaway offers a way to tap into Buffett's genius without picking individual stocks. It's like owning a mutual fund managed by one of the greatest investors ever, but with the added benefits of conglomerate stability and tax efficiency. Whether you're a seasoned investor or just starting out, Berkshire provides exposure to a wide array of industries while adhering to principles of patience, discipline, and value. In a market obsessed with short-term gains and speculative bets, Berkshire Hathaway stands as a beacon of rational investing.

In conclusion, the case for investing in Berkshire Hathaway is compelling. It combines the wisdom of Warren Buffett with a robust business model that's built to endure. As economic landscapes shift, from AI-driven disruptions to climate change initiatives, Berkshire's adaptability and financial fortress make it a stock worth holding for decades. If you're looking to emulate Buffett's success, starting with his own company might just be the smartest move. This isn't hype; it's a grounded assessment based on decades of proven results. Investors would do well to consider adding BRK shares to their portfolios, letting the power of compounding work its magic over time. (Word count: 1,048)

Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/07/25/warren-buffett-stocks-buy-berkshire-brk/ ]