4 Warren Buffett Stocks to Buy

These undervalued stocks are among the holdings in Berkshire Hathaway today.

Susan Dziubinski 25 August, 2021 | 1:25AM
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Buffett and Munger

Last week, Berkshire Hathaway (BRK.B) (BRK.A)  released its second-quarter 13-F. Morningstar's resident Berkshire specialist Gregg Warren noted that Berkshire was a net seller of equities during the quarter. We think most of Berkshire's holdings are fairly to overvalued today--including the names the firm added to last quarter. But there are four names that weren't trimmed during the quarter that we still think are undervalued today. Here are our analysts' latest stock analyst notes about each.

Amazon.com
Current Morningstar Rating (as of Aug. 20): 4 stars
Economic Moat Rating: Wide

"Wide-moat Amazon reported second-quarter results that were within its guidance range but were slightly short of investor expectations for both revenue and operating profit. Guidance for the third quarter is also light compared with FactSet consensus. In short, consumers' online shopping levels are returning to more normal levels as they shift some spending to other entertainment sources and offline shopping. Meanwhile, the company continues to add capacity at a breakneck pace in order to meet customer demand and one-day delivery, even as it roughly doubled its footprint during the past 18 months. We see no cracks in the long-term story as Amazon remains well-positioned to prosper from the secular shift toward e-commerce and the public cloud over the next decade. We note revenue weakness was limited to Amazon's own online store segment, with other segments performing well and overall profitability impressive despite lower revenue. Our model changes are fairly modest, thus we are maintaining our US$4,200 per share fair value estimate and see shares as undervalued.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Amazon.com Inc3,507.07 USD-1.53Rating
Berkshire Hathaway Inc Class A416,876.00 USD-1.97Rating
Berkshire Hathaway Inc Class B276.69 USD-1.92Rating
Teva Pharmaceutical Industries Ltd ADR8.25 USD-3.96Rating
The Kraft Heinz Co33.61 USD-3.36Rating
Wells Fargo & Co47.78 USD-2.81Rating

About Author

Susan Dziubinski

Susan Dziubinski  Susan Dziubinski is director of content for Morningstar.com.

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