Invest in these 3 Stocks Advised by Buffet for a Long-Term Growth Strategy
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Hey there! Let's take a peek at some evergreen investments — stocks that Warren Buffett, the Oracle of Omaha himself, has his big ol' feet firmly planted in. These are not your flash-in-the-pan tech startups but solid, stable companies that Buffett believes will keep growing for years to come. Ready to dive in? Buckle up!
1. Amazon (AMZN)
Amazon, the e-commerce and cloud infrastructure titan, clocks in at approximately 0.70% of Buffett's portfolio. He first bought into Amazon in 2019 and, as of the latest figures, has a cooling $1.98 billion worth of its stock with an average purchase price of $84.20. You do the math, partner! If that doesn't scream long-term gain, I don't know what does.
Since sinking his teeth into Amazon, the company has grown substantially. From 2019 to 2024, its revenue grew at a compound annual growth rate (CAGR) of an impressive 18%, with its EPS soaring at a CAGR of 37% — even in the face of pandemic, inflation, and other headwinds. If growth this steadfast doesn't bode well for your future, I don't know what will!
Amazon conquered the e-commerce world by expanding its marketplace, luring more shoppers to Prime subscriptions, and dishing out more remote computing power and storage through Amazon Web Services (AWS) — its cash cow cloud infrastructure platform. This strategy gives it a leg up against other retailers and allows it to outpace competition in the e-commerce and cloud markets alike.
Scaling up and storming markets like these should keep Amazon profitable and at the forefront of the e-commerce scene for years to come. And don't forget: there's a rapidly expanding AI market that's just waiting for companies to upgrade their cloud infrastructure, giving Amazon a sweet opportunity to boost its bottom line even further!
2. Visa (V)
Visa, the globe-trotting card payments processor, represents a whopping 1% of Buffett's diversified portfolio. He first swiped it up in the second quarter of 2011 and currently keeps $2.75 billion in shares on hand at an average purchase price of $52. That's a six-bagger gain in a mere 14 years!
Visa's business is as sturdy as a Himalayan mountaineer, withstanding the test of time through economic ups and downs. From 2011 to 2024, Visa's revenue and EPS each climbed at a compound annual growth rate (CAGR) of 11% and 19%, respectively. It's time to raise a glass to an impressive growth streak!
Visa doesn't issue any cards or assume any debt. Instead, it skillfully partners with financial institutions to dish out co-branded cards. The banks and financial folks handle all the account details and customer debt while Visa pocket a tidy sum in swipe fees — a mere 1.5%-3.5% on each transaction that zips through its network. Mastercard shares a similar market position, and these two are practically the kings of the card-based payment world, with businesses and government regulators keeping them in check.
3. Chubb (CB)
Last but certainly not least, Chubb: the foremost public insurer of property, supplemental health, casualty, and other policies, proudly accounts for 2.9% of Buffett's investment portfolio. He dove into Chubb in the third quarter of 2023 and dropped a cool $7.95 billion into this dependable stock, with an average purchase price of $221. Already sitting on a 33% gain, this one's shaping up to be a solid investment!
Chubb's core operating income per share (excluding tax benefits) skyrocketed 30% in 2023 and 13% in 2024. Even as inflation and rising interest rates swirled about, Chubb gracefully weathered the storm. Its customers didn't budge on their policies, ensuring consolidated net premiums rose 13.5% in 2023 and 8.7% in 2024. As macro headwinds kick up a fuss and scatter investors away from more risky sectors, Chubb's safe-as-houses reputation will draw investors who crave reliable, long-term gains.
That's all for today's rundown on those Buffett-approved, rock-solid stocks. Happy investing, folks!
- Investing in the textile industry might not be as appealing as some tech stocks, but considering Warren Buffett's investment in Visa (V) and its impressive growth, one might contemplate the benefits of diversifying a portfolio with a stable company like Chubb (CB) in 2023, seeing as it represents 2.9% of Buffett's portfolio and has demonstrated a 30% increase in core operating income per share.
- As the economy evolves, smartly investing your money in the finance sector can lead to significant returns. In 2023, Warren Buffett decided to invest $7.95 billion in Chubb (CB), a public insurer, demonstrating his belief in the company's long-term growth potential.
- In 2023, the benefits of investing in stocks like Amazon (AMZN) can still be substantial, as shown by Warren Buffett's $1.98 billion worth of Amazon stock. Having initially purchased in 2019, Buffett has looked to the company's potential for long-term gain, with a 18% compound annual growth rate (CAGR) in revenue and a 37% CAGR in EPS.
- Investing your money wisely can yield favorable returns in the long run. Warren Buffett's investment in Visa (V) serves as a prime example, with him owning $2.75 billion in Visa stock and realizing a gain of 6 times his initial investment over the past 14 years. Furthermore, Visa's revenue and EPS have each grown at a compound annual growth rate (CAGR) of 11% and 19%, respectively, since Buffett's initial purchase in 2011.
