Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A, BRK.B) has $37.8 billion burning a hole in its proverbial pocket. And, while the Oracle of Omaha hasn’t said exactly what he’s going to do with it, he has dropped hints about where he’s directing those funds.

So what? Well, aside from the fact that Berkshire shareholders might like to know how their money is being allocated, savvy investors might want to follow Mr. Buffett’s coattails and enjoy something of a free ride — if they can figure out which companies he’s accumulating. It’s just going to take a little sleuthing to figure out the most likely candidates.

To that end, here’s the short list of possibilities, based on what the 81-year-old value investor has publicly stated.

What We Know

Warren Buffett has a handful of preferences that we reasonably can assume would apply to whichever purchases he’s mulling now.

One of them is a full acquisition of the company — a virtual privatization, as was seen in 2010 when rail carrier Burlington Northern Santa Fe was wholly acquired to the tune of $34 billion. And, in an interview with Bloomberg, it became pretty clear he’s looking at a deal of that magnitude again. He recently turned down a $22 billion acquisition and made a point of saying that, someday, deal sizes could be bigger than $34 billion.

At the same time, we know Buffett prefers acquisitions that support the success of his other businesses, and vice versa. For example, the fund owns MidAmerican Energy, which uses coal to produce more than half the electricity it generates. Burlington Northern transports coal more than any other single type of good or commodity. It’s a win-win.

However, the head of Berkshire has been a little more explicit lately than just his broad preferences. Namely, he has vocalized through several venues that he’s accumulating shares of two companies he already owns. There’s an interesting nuance in that detail, though. More often than not, he’ll only “add to” newer positions in the portfolio, rather than older (and presumably larger) holdings.

And of course, whatever he’s scooping up has to be priced at a below-average P/E. After all, Buffett is first and foremost a value investor.

The Three Best Bets

So which stocks come reasonably close to meeting most of those criteria and conditions, and as such are likely in the midst of an accumulation by Berkshire Hathaway? They’re strictly guesses, but three very logical guesses given what we know. In no particular order, Buffett’s likely buying more …

• DirecTV (NASDAQ:DTV): Although the fund owned a little DTV as of the end of Q3 2011, the bulk of the current 1.2% allocation Buffett already has devoted to the satellite-cable television service provider has materialized very recently. And there’s plenty more room to add more. Contrary to what the “cut the cord” movement would imply is happening, revenue has been steadily increasing since 2007, and earnings have been reliably growing since 2009. Priced at only 13.8 times trailing earnings and 8.8 times its projected earnings, it’s definitely the kind of thing that’s right up Buffett’s value-oriented alley. It’s also a $32 billion company, in line with the size of full-acquisition deal he’s alluded to a couple of times lately.
• DaVita Inc. (NYSE:DVA): Most investors have never even heard of this kidney dialysis service company, which makes it all that much more attractive to Buffett. It was a brand-new position as of the last reported quarter, with the fund adding a little more than $200 million worth of the $8 billion company to its holdings. Like DirecTV, DaVita isn’t sexy, but four straight years of sales and earnings growth could drive the kind of income Warren Buffett likes to see injected back into Berkshire’s coffers. It trades at a trailing P/E of 15.4, but the forward-looking P/E of 12.2 is even juicier. It also would be a snap for Berkshire to buy the whole thing and still have most of the cash left over.
• Wells Fargo (NYSE:WFC): It’s not a new position, nor a small one; it’s Berkshire’s third-largest holding. But it is a position Buffett adds to on a very regular basis. And why not? The yield of 2.7% isn’t bad, and Buffett already has shown something of an affinity for banks right now, with Bank of America (NYSE:BAC) and Bank of New York Mellon (NYSE:BK) both being part of the portfolio within the last few years. Though the equity in BofA is now gone (his convertible preferred positions in Bank of America are acting more like fixed income and less like common shares), New York Mellon still is in there, and he even owns Wells Fargo in his personal portfolio. WFC trades at 11.4 times trailing earnings and at 9 times forecasted earnings, satisfying his need for value. At $176 billion, though, this isn’t a company he’s looking to acquire outright.

Bottom Line

Of the three potential Berkshire Hathaway targets in focus, two of them could indeed be fully owned, while the third — Wells Fargo — could only be accumulated. DaVita isn’t the “deal of magnitude” on his radar, either … at least not the one he’s been mentioning in passing, though that doesn’t mean he’s not interested. It just means he hasn’t mentioned a smaller deal in the works. DirecTV, however, is about the right size for the bigger acquisition he has been discussing.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.