5 Buffett stocks are trading close

As the end of the third trimester approaches, a handful of

warren buffet (Trades, Portfolio) stocks are trading near their 52-week lows.

As the market continues to grapple with rising inflation and potential interest rate hikes, several actions from guru Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) stock portfolio plunged.

Similarly, after posting a total return of 28.7% for 2021, the S&P 500 index has fallen about 18% so far this year.

While Buffett, who many consider to be one of the greatest investors of all time, has mostly sat on his hands in the months since the coronavirus crash despite the plethora of value opportunities available, he has been a more active buyer in recent months, having established large stakes in Occidental Petroleum Corp. (OXY, financial) and HP Inc. (HPQ, finance), among others.

When it comes to price, the billionaire investor looks for a margin of safety between a company’s share price and its intrinsic value. Additionally, he advocates buying “wonderful” businesses at “fair” prices rather than fair businesses at exceptional prices. Buffett also tends to favor high-quality businesses that he understands and have strong moats.

The second quarter’s 13F filing showed his equity portfolio consisted of 47 stocks in the quarter ended June 30, which was valued at $300.13 billion. Buffett’s holdings have posted mixed performance so far in 2022, with 14 of the top 20 positions down.

1570429350971555840.png

On Thursday, some of Buffett’s stocks that crashed to near their lowest prices in a year included Charter Communications Inc. (CHTR, financial), Markel Corp. (MKL, Financial), HP, Celanese Corp. (THIS, Financial) and US Bancorp (USB, Financial).

Investors should be aware that 13F filings do not provide a complete picture of a company’s holdings as the reports only include its positions in US stocks and US certificates of deposit, but they can still provide valuable insight. Additionally, reports only reflect trades and holdings as of the most recent portfolio deposit date, which may or may not be held by the reporting company today or even when this article was published.

Charter Communications

Communications of the Charter’ (CHTR, Financial) shares have fallen 50% in the past year. The stock is currently 1.92% above its yearly low of $377.92.

1570431199430688768.png

The Oracle of Omaha owns 3.83 million shares of the company, representing 0.60% of its stock portfolio.

1570432006465110016.png

The Stanford, Connecticut-based telecommunications and mass media company has a market capitalization of $60.87 billion; its shares were trading around $378.04 on Thursday with a price-to-earnings ratio of 12.17, a price-to-book ratio of 6.15 and a price-to-sales ratio of 1.26.

GuruFocus rated Charter Communications’ financial strength at 3 out of 10. Due to the issuance of new long-term debt in recent years, the company has low interest coverage. The Altman Z-Score of 0.77 also warns that it could be in danger of bankruptcy. However, the return on invested capital dwarfs the weighted average cost of capital, which means that value is created as the business grows.

The company’s profitability fared better with an 8 out of 10 rating, driven by operating margin expansion, strong returns on equity, assets and capital outperforming more than half of its competitors and a high Piotroski F-Score of 7 out of 9, indicating business conditions are healthy. Charter Communications also has a predictability rating of four out of five stars thanks to consistent profit and revenue growth. According to research by GuruFocus, companies in this ranking have an average return of 9.8% per year over a 10-year period.

Among the stock gurus, Dodge & Cox holds the largest stake with 4.21% of its shares outstanding.

Frank Sands (Businesses, Portfolio),

First Pacific Councilors (Businesses, Portfolio),

Bill Nygren (Businesses, Portfolio),

Steven Romick (Businesses, Portfolio) and

PRIMECAP management (Businesses, Portfolio), among others, are also invested in Charter Communications.

marcel

Markel Shares (MKL, Financial) have declined by approximately 2% over the past 12 months. The stock is currently 2.82% above its yearly low of $1,162.

1570435852033703936.png

Buffett owns 467,611 shares of the company, which represents 0.20% of his stock portfolio.

1570436400778690560.png

The insurance company headquartered in Glen Allen, Va., has a market capitalization of $16.20 billion; its shares were trading around $1,196.04 on Thursday with a price-to-earnings ratio of 680.69, a price-to-book ratio of 1.34 and a price-to-sales ratio of 1.50.

Markel’s financial strength was rated 5 out of 10 by GuruFocus. Due to the company’s issuance of new long-term debt in recent years, its interest coverage is low. It also struggles to create value since the WACC eclipses the ROIC.

The company’s profitability was rated 7 out of 10, although its margins and returns underperform the majority of its industry peers. Markel also has a moderate Piotroski F-Score of 5, meaning conditions are typical of a stable business. Due to a decline in earnings per share growth over the past 12 months, the 2.5-star predictability rating is under scrutiny. GuruFocus found companies with this rank yield, on average, 7.3% per year.

With a 3.46% stake, Buffett is Markel’s biggest shareholder guru.

Baillie Gifford (Businesses, Portfolio),

Chris Davis (Businesses, Portfolio),

Wallace-Weitz (Businesses, Portfolio),

Jeremy Grantham (Businesses, Portfolio),

steven cohen (Businesses, Portfolio),

Jim Simons (Businesses, Portfolio)’ Renaissance Technologies,

Arnold Van den Berg (Businesses, Portfolio),

Tom Russo (Businesses, Portfolio),

Ray Dalio (Businesses, Portfolio) and

Murray Stahl (Trades, Portfolio) also have positions in the stock.

resume

HP (HPQ, Financial) have fallen about 3.4% over the past year. The stock is currently 3.26% above its yearly low of $26.11.

1570441455296692224.png

The guru owns 104.5 million shares of the company, which is 1.14% of his stock portfolio.

1570441926132482048.png

The Palo Alto, Calif.-based hardware company, which manufactures computers, printers and related supplies, has a market capitalization of $27.11 billion; its shares were trading around $26.95 on Thursday with a price-to-earnings ratio of 4.72 and a price-to-sales ratio of 0.44.

GuruFocus rated HP’s financial strength at 5 out of 10. Although the company has issued new long-term debt in recent years, this is manageable due to adequate interest coverage. The Altman Z-Score of 2.44, however, warns it’s under pressure. Value creation also occurs since the ROIC eclipses the WACC.

The company’s profitability has fared better, scoring an 8 out of 10. While the operating margin is down, HP’s returns are outperforming its competitors. It also has a moderate Piotroski F-Score of 6 as well as a one-star predictability rating. Data from GuruFocus shows that companies in this ranking have an average return of 1.1% per year.

Buffett is HP’s largest shareholder guru with a 10.10% stake. Other gurus with notable holdings include Dodge & Cox, PRIMECAP and Grantham.

Celanese

Celanese Shares (THIS, Financial) have fallen nearly 30% in the past 12 months. The stock is currently trading 3.42% above its 52-week low of $104.74.

1570448070083198976.png

The renowned investor owns 9.15 million shares of the company, giving him 0.36% space in the stock portfolio.

1570448584648802304.png

The chemical company, headquartered in Irving, Texas, has a market capitalization of $11.73 billion; its shares were trading around $108.27 on Thursday with a price-to-earnings ratio of 6.05, a price-to-book ratio of 2.41 and a price-to-sales ratio of 1.24.

Celanese’s financial strength was rated 6 out of 10 by GuruFocus. Despite the issuance of new long-term debt in recent years, the company’s interest coverage is sufficient. The high Altman score of 3.66 also indicates he is in good standing. Also, the ROIC exceeds the WACC, so value is created.

The company’s profitability scored an 8 out of 10, thanks to operating margin expansion and returns that outperform the majority of industry peers. Celanese is also backed by a high Piotroski F-Score of 7, although the one-star predictability rating is under scrutiny.

Of the gurus invested in Celanese, Buffett holds the largest stake with 8.45% of his shares outstanding. Dodge & Cox, The Simons Company, Dalio,

Jeff Auxier (Businesses, Portfolio),

Paul TudorJones (Businesses, Portfolio),

Joel Greenblatt (Trades, Portfolio) and several other gurus are also invested in the stock.

American bank

United States Bancorp (USB, Financial) has fallen more than 20% over the past year. Shares are currently trading 4.13% above the yearly low of $43.74.

1570454275090399232.png

Buffett holds 119.81 million shares, making it his ninth-largest holding with a weighting of 1.84%.

1570455079331414016.png

The Minneapolis-based bank holding company has a market capitalization of $67.62 billion; its shares were trading around $45.60 on Thursday with a price-to-earnings ratio of 10.46, a price-to-book ratio of 1.62 and a price-to-sales ratio of 2.92.

Weighed down by debt-related ratios that underperform more than half of its industry, US Bancorp’s financial strength was rated 4 out of 10 by GuruFocus.

The company’s profitability fared better with a rating of 6 out of 10. US Bancorp is backed by margins and returns that exceed half of its competitors as well as a moderate Piotroski F-Score of 5. Despite recording a slowdown in earnings per share growth, the bank has a five-star predictability rating. According to GuruFocus, companies in this ranking earn an average of 12.1% per year.

With an 8.06% stake, Buffett is the company’s biggest shareholder guru. Other notable investor gurus include Davis, Grantham,

First Eagle investment (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss,

Mayors and power (Businesses, Portfolio),

Yaktman Asset Management (Businesses, Portfolio) and PRIMECAP.

Additional Potential Opportunities

Two other stocks in Buffett’s portfolio that were trading near their 52-week lows on Thursday were Mondelez International Inc. (MDLZ, Financial) and Ally Financial Inc. (ALLY, Financial).

Comments are closed.