Charlie Munger, vice chairman of Berkshire Hathaway (NYSE: BRK-A, NYSE:BRK-B) is one of the biggest names in the investing world with an impeccable track record over the years. Consequently, Charlie Munger stocks serve as barometers many investors emulate in the pursuit of wealth-building strategies. His financial behemoth, Berkshire Hathaway, has culminated in a bastion of wealth and knowledge, with Munger’s insights into stocks often being considered paramount by those in the fiscal domain. Amidst the turbulence of the stock markets, Munger’s approach and Berkshire Hathaway’s portfolio render a lighthouse for those seeking shelters of robust returns. Thus, as you traverse the dynamic landscape of investments, these three stocks offer a glimpse into his enduring investment wisdom.
Top Charlie Munger Stocks: Bank of America (BAC)
In the financial world, Charlie Munger’s Daily Journal (NASDAQ:DJCO) holds a notable position in Bank of America (NYSE:BAC). With 2.3 million shares, valued at a jaw-dropping $65.99 million, this investment is the largest publicly traded holding for the publishing company.
Moreover, the economic environment favorably positions Bank of America in Munger’s portfolio, particularly as rising interest rates enable banks to optimize their earning spreads by adeptly navigating lending and borrowing rates. Consequently, Bank of America, welcoming 157,000 new customers in the recent quarter and marking 18 successive quarters of growth, not only fortifies its financial standing but also prudently elevates shareholder payouts.
Furthermore, with its stock attractively valued at 90% of its book value and offering a 96 cents per share dividend, yielding 3.65% annually, it guarantees Berkshire Hathaway’s heftiest annual dividend check, showcasing an insightful investment strategy amid the prevailing economic turbulence.
Wells Fargo (WFC)
Wells Fargo (NYSE:WFC), boasting $1.9 trillion in assets, solidifies its stature as a considerable powerhouse, serving a third of U.S. households. Recent quarters spotlight Wells Fargo’s adeptness for expanding on its top and bottom line results, with a 57% net income bump to $4.9 billion in the second quarter, driven by increased net interest and fee income across numerous business segments. Potentially benefiting from a soft U.S. economic landing and boasting a forward price-to-earnings ratio of 8.3 plus a 3.53% dividend yield, it presents a compelling prospect for bullish investors.
Furthermore, Wells Fargo’s net interest margin (NIM) climbed from 2.2% to 3.1%, indicating approximately a 50% jump in core loan book profitability and explaining the bank’s reported earnings boost. Thus, the company has showcased its resilience and stellar financial ability in its niche.
Alibaba Group Holding (BABA)
Despite a five-year decline of 42%, Alibaba Group (NYSE:BABA) notably remains the Daily Journal’s third-largest holding, encapsulating the persistent allure for savvy investors. The e-commerce giant also persists as a potentially resilient contender in China’s vibrant market. The past few years have been tough for BABA, especially on the regulatory front, as it looks to regain its once-esteemed position in the tech space.
Moreover, following a strategic shift that saw Jack Ma stepping away from the helm, Alibaba has refocused on bolstering e-commerce and cloud computing arms. At the same time, significant investments in artificial intelligence (AI) point to innovative advances across its sprawling business. The realignment steers a systematic path toward long-term expansion ahead. Additionally, any new stimulus measures could benefit Alibaba’s stock. With over $29 billion in annual free cash flow, the company can weather upcoming challenges. Additionally, with an enticing average price target of $141.51, pointing to a potential 62.06% upside, Alibaba offers a subtle investment appeal, warranting cautious optimism for investors that can stomach the short-term volatility.
On the date of publication, Muslim Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
