Top 2 Warren Buffett Stocks to Invest in March 2024

Berkshire Hathaway, the colossal conglomerate led by Warren Buffett, has made significant moves in the stock market recently. In 2024, the company sold a considerable amount of shares, notably trimming its stakes in two of its largest holdings: Apple and Bank of America. This shift indicates a strategic pivot, as Berkshire has shown less interest in repurchasing its own stock, acquiring far fewer shares than in previous years.

Buffett’s Investment Strategy

Historically, Buffett and Berkshire Hathaway have excelled at identifying high-quality companies available at attractive prices, holding onto them for extended periods. With a robust equities portfolio valued at approximately $297 billion, Berkshire is always on the lookout for well-managed companies to invest in. However, it appears that Buffett and his team have become cautious regarding the banking sector. Not only has Berkshire sold a significant portion of its stake in Bank of America, but it has also reduced its holdings in Citigroup, Capital One, and the Brazilian digital bank Nu Holdings during the fourth quarter.

American Express: A Buffett Favorite

Despite the general downturn in banking stocks, one bank stock that remains a favorite for Buffett and Berkshire is American Express (NYSE: AXP). Currently, it stands as the second-largest holding in Berkshire’s portfolio. American Express is not your typical bank; it operates one of the four major credit card networks globally and boasts a substantial credit card portfolio.

Buffett appreciates American Express for its unique revenue model, which combines fee income from transaction processing with interest income from credit card loans. The brand itself has become a significant asset, as many consumers associate it with a certain status, leading them to seek it out. For instance, the Platinum card comes with an annual subscription fee of nearly $700, generating a steady stream of recurring revenue.

Looking ahead, American Express aims for long-term revenue growth exceeding 10% and earnings-per-share growth in the mid-teens percentage range. While the company may face cyclical challenges during economic slowdowns or periods of consumer financial stress, it tends to attract higher-income users who are generally more resilient.

Buffett and Berkshire have held onto American Express through various economic cycles, including the Dotcom Bubble, the Great Recession, and the COVID-19 pandemic, which speaks volumes about their confidence in the company.

Coca-Cola: A Timeless Investment

Another classic stock in Berkshire’s portfolio is the iconic beverage company Coca-Cola (NYSE: KO). Berkshire first invested $1 billion in Coca-Cola back in 1988, and today, that investment has ballooned to approximately $24.9 billion. The Coca-Cola brand is unparalleled in the beverage industry, boasting a significant competitive moat—an attribute that Buffett has consistently favored in his investments.

Coca-Cola is often viewed as a defensive stock, as consumers tend to purchase its products regardless of economic conditions, including recessions. Furthermore, Coca-Cola is not a company that rests on its laurels; its management has a proven track record of innovation, continually developing and acquiring new and popular beverages. In addition to its flagship sodas, Coca-Cola owns electrolyte drinks like Powerade and BODYARMOR, as well as coffee and tea brands, and juices.

Conclusion: Why Invest in Buffett’s Picks?

Investing in stocks that Warren Buffett endorses can be a smart strategy for both novice and seasoned investors. American Express and Coca-Cola exemplify Buffett’s investment philosophy of selecting companies with strong fundamentals, competitive advantages, and a history of resilience. As we move through March 2024, these two stocks are certainly worth considering for your investment portfolio. For more details, you can read the original article here.