Warren Buffett presents investing as being simple. Buffett purchased his first stocks in 1941 when he was just 11 years old. He had a net worth of roughly $6,000 by the time he was 15 years old, which would be about $64,477 in 2022 dollars. The “Oracle of Omaha” amassed a fortune worth roughly $100 billion over the course of the following 70 years by using his skill at value investing.
Buffett does not, however, match the stereotype of the avaricious Wall Street tycoon. More than any other billionaire philanthropist in recent years, Buffett has donated more than $46 billion to charitable causes. Despite his enormous wealth, Buffett continues to reside in the same home in Omaha, Nebraska, which he bought for $31,500 back in 1958.
The following are seven of the best Warren Buffett-style stocks to buy in 2022, according to Morningstar:
- Microsoft Corp. (MSFT)
- Alphabet Inc. (GOOG, GOOGL)
- Meta Platforms Inc. (META)
- UnitedHealth Group Inc. (UNH)
- Nvidia Corp. (NVDA)
- Visa Inc. (V)
- Walmart Inc. (WMT)
1. Microsoft Corp.
Microsoft is the world’s largest software company, owning the Windows operating system, the Office professional software suite, and the Azure cloud services platform.
Microsoft also owns the professional social media platform LinkedIn and the video game platform XBox. Microsoft also announced a nearly $70 billion acquisition of video game publisher Activision Blizzard Inc. (ATVI).
The qualities Buffett seeks for in a stock, such as Microsoft’s dominance in professional software and its valuable brands, are exactly what Microsoft possesses.
A staggering $61.2 billion in net income was also produced by Microsoft in 2021. Microsoft posted 18.3% sales growth and 8.2% net income growth in the most recent quarter, but the company still trades at a fair price of only approximately 23.4 times projected earnings forecasts.
2. Alphabet Inc.
Alphabet is one of the biggest and most successful online advertising companies and the world’s top provider of internet searches. The parent company of Google, YouTube, Google Cloud, Waymo, Mandiant, Fitbit, and a number of other cutting-edge technological ventures is Alphabet. Other cutting-edge technological ventures include the wearable fitness device maker Fitbit.
Buffett has typically avoided investing in technology equities, but his recent substantial investments in firms like Amazon.com Inc. (AMZN) and Snowflake Inc. suggest that he may be changing his mind (SNOW). Apple Inc. (AAPL), Berkshire’s largest stake, might be a better bargain stock than Alphabet, however. Apple only reported an 8.5% increase in revenue for the first quarter, while Alphabet saw a 22.9% increase. In comparison to Apple, Alphabet shares have a lower price-to-earnings-to-growth ratio, price-to-sales ratio, and projected earnings multiple.
3. Meta Platforms Inc.
Facebook, Instagram, Messenger, and WhatsApp are all social media and messaging platforms that are owned by Meta Platforms, Alphabet’s biggest rival in internet advertising. The company Reality Labs at Meta is creating hardware and software for augmented reality and virtual reality, including Horizon Worlds and other metaverse platforms.
Stocks in the technology sector have fallen hard so far in 2022. Sadly, Meta stock has had the poorest performance on this list, with shares down 51.6 percent for the year as of June 17. Buffett admirers are aware that he views market reversals as periodic chances to purchase premium stocks for cheaper prices, so they might not be discouraged by Meta’s recent decline. However, the stock only trades at 14.1 times forward profits despite the corporation reporting a $7.4 billion net income in the first quarter.
4. UnitedHealth Group Inc.
The largest managed care company in the United States, UnitedHealth offers millions of consumers health plans and medical services. Investors believe that the health care industry will continue to grow, and UnitedHealth is in a good position to take advantage of this enormous long-term opportunity.
UnitedHealth said that its insurance customer base increased by 3%, to 51 million consumers in the first quarter. A significant earnings and revenue beat for UnitedHealth was produced by this client expansion combined with increased insurance rates, including a 14.2% increase in sales and $5 billion in net income. From a value standpoint, UNH shares are only trading at 21.5 times forecasted future earnings.
5. Nvidia Corp.
One of the biggest manufacturers of premium semiconductors worldwide is Nvidia. The enormous processing power needed for a wide range of cutting-edge technologies, such as high-end gaming, enterprise graphics, applications utilising artificial intelligence, the metaverse, the Internet of Things, autonomous vehicles, and cloud computing, is provided by Nvidia chips.
Nvidia is the furthest thing from a traditional Buffett bargain stock in recent years. However, NVDA stock is currently trading at 30 times projected future earnings due to Nvidia’s unrelenting growth and a 47.3% year-to-date sell-off. Nvidia announced $1.6 billion in net income and a remarkable 46.4% increase in revenue for the first quarter.
6. Visa Inc.
Visa has the biggest retail electronic payment network in the world and is a major international credit card and digital payments processor. As the market sell-off has accelerated in recent months, Visa shares have held up reasonably well, declining 11% in the previous three months compared to the S&P 500’s 16.7% decline.
All of the stocks on this list may be prospective Buffett investments, but only Visa is a stock that Buffett really owns. In the third quarter of 2011, he made his first investment in Visa. Since then, Visa has produced a total return for Berkshire of almost 870% , versus a total return of 281 percent for the S&P 500. Buffett first bought Visa more than ten years ago, and Berkshire still owns around 8.3 million shares today.
7. Walmart Inc.
The largest retailer in the world, Walmart has tens of thousands of retail locations as well as warehouses for Sam’s Club members only. Another stock that Buffett previously owned was Walmart, which he started buying in 2005 after first disclosing a 19.9 million-share holding in the company. Buffett increased the size of his Walmart investment by 2009, but he fully sold out in 2018.
Buffett claimed that Amazon was Walmart’s “difficult competition” at the time he sold his stock. While Amazon continues to pose a real threat to all established brick-and-mortar retailers, Walmart has invested heavily in expanding its e-commerce business and launching cutting-edge omnichannel services like pickup and delivery as well as its Walmart Marketplace platform for independent small and medium-sized businesses over the past four years since Buffett sold his stake.