Warren Buffett may not have wanted Donald Trump in the White House, but he’s sure taking advantage of the opportunities Trump will provide for investors. Despite Buffett’s public support of Hillary Clinton, Buffett stocks are as well-positioned for the Trump presidency as any others.
Buffett may have been disappointed on Election Day. Fortunately, Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) shareholders are drowning their election sorrows in cash. November was BRK.B’s best month performance-wise in six years. Buffett himself recently admitted to buying stocks hand-over-fist since Trump’s victory.
In a CNBC interview, Buffett said he has bought $12 billion in common stock in the three months following the election. That’s certainly some aggressive buying from a man who only bought $5.2 billion in stocks in nine months heading into the election.
Investors won’t know exactly what Buffett stocks the Oracle of Omaha has been snatching up until Berkshire files its fourth-quarter 13F form in about a week. However, here are three Buffett stocks that are likely candidates.
Buffett Stocks to Buy in the Trump Era: Goldman Sachs (GS)
If Buffett wasn’t adding to his $2.6 billion stake in Goldman Sachs Group Inc (NYSE:GS), he sure missed a major opportunity. GS stock has soared 32.9% since Election Day. GS also reported a huge fourth-quarter earnings beat, driven mostly by fixed income trading.
Goldman may be in the best position to capitalize on the Trump administration of all the Buffett stocks out there. Trump is doing just about everything a Goldman investor could ever dream of to make life easier. For starters, Trump has brought in at least five former Goldman executives to join his cabinet.
In addition, GS stock should benefit on several levels from Trump’s proposed corporate tax breaks and repatriation holiday. Trump’s pro-business policy attitude should encourage deal making, which is great news for Goldman. In 2016, Goldman completed $971.6 billion in M&A deals, more than any other investment bank.
Finally, last week Trump followed through on his pledge to eliminate many of the banking regulations in the Dodd-Frank Act, legislation which has made life miserable for banks ever since the financial crisis. GS stock looks like it may be on the fast track to profits under Trump. Buffett certainly may have doubled down on his bet since Election Day.
Buffett Stocks to Buy in the Trump Era: Wells Fargo (WFC)
Wells Fargo & Co (NYSE:WFC) is a unique case to say the least. Heading into the election, Berkshire already held a massive $27.4 billion stake in WFC stock. Of course, the bank’s reputation took a huge hit when it was fined $185 million back in September for opening fraudulent accounts. The bank even charged 85,000 customers unauthorized fees on those accounts.
Prior to the election, Buffett stayed silent on the issue. Afterward, he condemned the scandal without providing insight about his personal stake in the company. “It was a dumb incentive system, which when they found out it was dumb, they didn’t do anything about it,” Buffett said in November.
From Sept. 1 to the day before Election Day, WFC stock was down roughly 10%. Since Election Day, it has exploded 25% higher. Buffett has a history of buying good stocks on short-term, headline-related dips. He certainly may have taken the opportunity to add to his WFC stake during the fraud scandal dive.
Buffett Stocks to Buy in the Trump Era: Charter Communications (CHTR)
Charter Communications, Inc. (NASDAQ:CHTR) may be the least obvious Buffett stocks listed in this article. However, here are several reasons Warren Buffett may have been adding to his CHTR stock position since the election.
CHTR stock is an excellent buyout candidate. There has been a lot of drama surrounding the AT&T Inc. (NYSE:T) buyout of Time Warner Inc (NYSE:TWX). Trump has been highly critical of the deal in recent months.
He may have a very personal reason for doing so. Trump has had a very public feud with TWX network CNN. Trump has repeatedly bashed CNN, accusing the network of being overly critical of him in its reporting. Trump also has a history of holding grudges. It may seem crazy, but Trump may be determined to do everything in his power to block the TWX buyout simply out of spite.
At the same time, T rival Verizon Communications Inc. (NYSE:VZ) has expressed interest in acquiring CHTR. VZ even sold much of its Fios network, a move that some people believe is the precursor to a bigger push into cable.
Finally, from a practical standpoint, the best indicator of what Buffett has been buying since the election is probably what he was buying before the election. Warren Buffett upped his $3 billion CHTR stock stake in Q3. That buying may very well have continued in the new business-friendly Donald Trump era.
As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.
