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3 Stocks Buffett Would Love

Date: January 1, 2017      Publication: Bottom Line Personal      Source:  John Reese, Validea Capital Management, LLC      Print:

You don’t have to be a billionaire to invest like Warren Buffett. The Berkshire Hathaway CEO excels at finding undervalued stocks that have great potential to rise strongly for many years. And that approach is especially appealing at a time like this, when many stocks are overvalued.

For nearly 13 years, my research firm has created model portfolios that are based on the stock-picking methods of some of the world’s greatest investors. Over that time, our Buffett portfolio, which is best-suited for conservative investors, has returned an annualized 6.8% versus 5.7% for the Standard & Poor’s 500 stock index. The stocks in our Buffett portfolio are issued by boring, reliable businesses that have shareholder-friendly management, little long-term debt and strong, brand-name products that do well no matter what the economic environment.

My favorite Buffett-like stocks that meet these criteria now…

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  • Hasbro (HAS) makes iconic toys and board games ranging from Monopoly and Play-Doh to Transformers and Star Wars characters. In recent years, management has created long-term streams of revenue through savvy TV and film licensing deals. Recent share price: $86.62.
  • JB Hunt Transport Services (JBHT) is one of North America’s leading trucking and logistics companies. Its 12,000 trucks deliver freight for hundreds of major corporations such as Wal-Mart and Home Depot. Recent share price: $93.52.
  • Ross Stores (ROST) operates nearly 1,300 Ross Dress for Less retail outlets in the US, selling name-brand and designer clothes at prices 20% to 60% lower than department stores. Recent share price: $68.57.

 

Source: John Reese, founder and CEO of Validea Capital Management, LLC, and manager of the Validea Market Legends ETF (VALX), West Hartford, Connecticut. Validea.com