8 Stocks Buffett Is Buying...Or Should Be

Hitch a ride with stocks the master already holds, or take a chance on four firms that he doesn’t own yet.

- Tom Petruno

FOLLOWING BILLIONAIRE investor Warren Buffett into stocks he owns has often been a profitable strategy over the past few decades. But reversing the order— buying a stock before Buffett buys it—can potentially be even more rewarding.

With that in mind, we went prospecting for companies that Berkshire Hathaway (symbol BRK-B, $137), Buffett’s holding company, has been buying recently, and four stocks that Buffett doesn’t hold but we think he ought to buy. We looked for the things he favors: companies that are leaders in their industries, that have a strong commitment to sharing profit with investors, and whose stocks sell for relatively low prices compared with earnings and underlying asset value.

A few caveats: First, even Buffett makes mistakes (see kiplinger.com/links/ worstbuffett for some of his clunkers). Second, many of Berkshire’s picks are now made by Buffett’s two investing deputies, Todd Combs and Ted Weschler, not Buffett himself. And third, anyone guessing which stocks might be attractive to Berkshire is doing just that—guessing.

All that said, here’s a look at four stocks that Berkshire has bought since October 1 and four that we humbly suggest Buffett should consider. (Prices and related data are as of March 1.)

STOCKS HE’S BUYING

Wells Fargo & Co. (WFC, $49) If there’s one stock that epitomizes Buffett’s devotion to companies he likes, it’s probably this banking titan. Wells has been a Buffett holding since 1989, and it is now Berkshire’s second-biggest stock bet—behind only Kraft Heinz—with a stake worth $24.4 billion.