Last week brought the latest full equity holdings of Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-B). While several key changes were made in the stakes, actually very few changes were made when it came down to new positions and deletions from the portfolio.
Now that interest rates have started to rise, and with stocks within a few percent of all-time highs, investors are concerned about where they should be putting their money. Since Buffett and team generally look at many holdings as “forever,” 24/7 Wall St. wanted to evaluate which of Warren Buffett’s stock picks have the most implied upside ahead relative to the Thomson Reuters consensus analyst price target.
In order to avoid keeping this list consistent with prior reports, we have screened out the American Depository Receipts of foreign shares. We also included items such as their dividend yields and added color if applicable. Portfolio managers Todd Combs and Ted Weschler are getting even more entrenched as far as their ability to add to positions.
Investors need to be aware that many companies in the full Buffett portfolio are trading close to or even above what the analyst community might refer to as fair value. Another consideration is that Buffett himself will not care at all what Wall Street values something at for a year out, as he is willing to pay up for solid quality companies that he knows are going to be present and remain attractive through good times and bad times.
These are the 10 recent and past Warren Buffett stocks with the most implied upside.
The Coca-Cola Co. (NYSE: KO) was surprising to see on the upside list. After all, how exciting is the soft drink industry? At $39.05, its 52-week range is $35.58 to $43.43, and the $45.53 consensus price target from analysts generates an implied upside of 16.5%. Coca-Cola also pays a 2.9% dividend yield. Buffet’s stake in Coca-Cola was the same at 400 million shares, worth some $15.6 billion as of now.
DaVita HealthCare Partners Inc. (NYSE: DVA) is the kidney dialysis giant, and Buffett has even entered into an agreement with the company not to keep growing his stake above and beyond a certain point. With shares at $112.10, the consensus price target of $126.30 generates an implied upside of 12.6%. This stock “went on sale” over the summer after earnings failed to impress because the stock had risen so much. DaVita pays no dividend, and the 52-week range is $95.17 to $131.33. The position of almost 15 million shares in DaVita is worth almost $1.7 billion today, against a market cap of almost $12 billion.