Warren Buffett stocks are traditionally a benchmark for value investors. Buffett prizes value, operational viability, cash flow, and more financial fundamentals when picking stocks for this portfolio. True to form, his massive conglomerate Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) is outperforming the S&P 500 by a slim margin since January. Buffett’s holdings suffered many of the same September setbacks as the broader market. Still, some of Buffett’s best stocks are primed to close out the year strong – and make 2024 another winning year for the Oracle of Omaha.
Occidental Petroleum (OXY)
Warren Buffett added billions of dollars of Occidental Petroleum (NYSE:OXY) to his portfolio this year. Still, the stock has remained fairly flat this year, returning just 2% since January. While its lackluster performance might make investors think Buffett made a wrong call with the oil and gas exploration firm, the reality is different.
Notably, cementing OXY’s place as one of the most sustainability-focused oil companies, Amazon (NASDAQ:AMZN) recently inked a deal with one of the company subsidiaries in an effort to reduce its carbon footprint. Occidental’s subsidiary plans to develop and build a massive series of direct air capture facilities that filter carbon dioxide from the air. The benefits of cleaner are obvious. At the same time, Occidental will be able to leverage the carbon reduction into a series of sellable credits to help companies like Amazon offset their massive environmental impact.
While the solution isn’t perfect, it’s a good first step toward global sustainability. And, critically, it opens new revenue avenues as Buffett’s best oil company positions itself ahead of imminent regulatory demand. That regulatory requirement could put a damper on fossil fuels moving forward, making OXY one of the few ready to adapt to changing winds.
American Express (AXP)
American Express (NYSE:AXP) had a major PR win last week, and Warren Buffett played a key role in the story. At the end of September, news broke that American Express’ management wanted to “avoid layoffs, acquire businesses, and invest $1 billion in new cardholder rewards” amid the pandemic in 2020. CEO Steve Squeri’s first move was to call Buffett, who told him, “the most important thing to take care of is your customers and your brand.”
Buffett’s advice to cater to customers paid off, and the stock has nearly doubled since then. Buffett’s focus on value extends beyond simply stock market fundamentals. His emphasis extends to creating a quality product and experience for customers. At the same time, he prizes taking care of employees and leveraging new opportunities. These traits combine to make him a corporate mastermind.
Buffett has owned American Express stock for over 25 years, and his investment has already generated more than $26 billion in unrealized gains. The Amex gravy train continues to roll, as recent reports show ballooning revenue and a strong forecast for the remainder of the year into 2024.
Nu Holdings (NU)
Nu Holdings (NYSE:NU) is a lesser-known Warren Buffett stock. Still, the financial service company’s focus on Latin America lets the legendary investor invest directly in one of the world’s most exciting emerging markets. Just one week after launching a new series of savings accounts in Mexico, the company snatched up one new million customers, expanding its total market share to more than 3 million.
The company’s financials reinforce Buffett’s bullishness, as its recent filing showed an 85% revenue growth amid a global economic downturn. 46% of Brazilians have an account with Nubank. The trend will likely accelerate as the company expands its fintech and digital offerings to capture cross-border transactions.
Analysts agree, and NU’s average consensus is a firm Strong Buy. Digitization and fintech are taking the world by storm. As more countries and individuals adopt cashless banking opportunities, NU is positioned to become one of the biggest players south of the border.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
