In this article, we discuss the 5 best Warren Buffett stock picks for beginners. If you want to read the details about Warren Buffett’s strategy and his hedge fund performance, go directly to the 12 Best Warren Buffett Stock Picks for Beginners.
5. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 100
T-Mobile US, Inc. (NASDAQ:TMUS) is a Washington-based telecommunications company. On December 12, the company announced that it boosted its 5G coverage for extended reach. T-Mobile US, Inc. (NASDAQ:TMUS)’s Extended Range 5G reached around 323 million people and the company claims that its Ultra Capacity 5G has reached 260 million people.
At the end of Q3 2022, 100 hedge funds held T-Mobile US, Inc. (NASDAQ:TMUS) shares, up from 96 in Q2, taking the 5th spot on our list of Warren Buffet stock picks for beginners. Berkshire Hathaway was the largest shareholder of the company with 5.24 million shares, valued at $703.319 million. It was followed by Viking Global with 3.324 million shares, worth $446.062 million.
On November 15, Tigress Financial analyst Ivan Feinseth reaffirmed a Buy rating on T-Mobile US, Inc. (NASDAQ:TMUS) shares and raised his price target to $202 from $195. The analyst said that the company’s “massive” 5G network will result in T-Mobile US, Inc. (NASDAQ:TMUS)’s customer and revenue growth.
Here is what ClearBridge Investments has to say about T-Mobile US, Inc. (NYSE:TMUS) in its Q4 2021 investor letter:
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 140
Apple Inc. (NASDAQ:AAPL) is an American tech company headquartered in California. It is the largest US company by market capitalization. The company offers consumer electronics and software services and is a part of the US Big Five technology companies.
On December 21, Citi analyst Jim Suva told investors that Apple Inc. (NASDAQ:AAPL) performed in line with the market in 2022. He added that even though in the fourth quarter the company is facing supply constraints, the company’s product demand is resilient. Suva maintains a Buy rating on Apple Inc. (NASDAQ:AAPL) with a $175 price target and believes that the company shares will trade higher in the future.
The hedge fund sentiment for Apple Inc. (NASDAQ:AAPL) jumped substantially in the third quarter of 2022. 140 hedge funds held bullish positions on the company stock, compared to 128 in the previous quarter. Apple Inc. (NASDAQ:AAPL) is the largest holding in Berkshire Hathaway’s portfolio, holding a 41.76% weightage in the company. The firm has owned the stock since the first quarter of 2016.
TimesSquare Capital Management made the following comment about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:
“Apple Inc. (NASDAQ:AAPL) designs and manufactures smartphones, personal computers, tablets, and wearable devices. The company reported better than expected revenues, though that came from a lower-than-expected supply chain impact. Apple called out pockets of weakness in wearables as well as home & accessories. Management referenced macroeconomic uncertainty and sounded somewhat guarded when commenting on fourth quarter expectations. In September, Apple introduced four new iPhones with retail prices kept at last year’s levels. Its shares edged forward by 1% in consideration of these developments. We trimmed the position after evaluating the channel which highlighted some consumer demand choppiness.”
3. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 146
Mastercard Incorporated (NYSE:MA) is an American financial services company. It is the world’s second-largest payment-processing company and operates worldwide. Berkshire Hathaway has held Mastercard Incorporated (NYSE:MA)’s shares since the first quarter of 2011. In Q3, the firm owned close to 4 million of the company shares, worth $1.13 billion, covering 0.38% of Berkshire’s portfolio.
In the last three months, Mastercard Incorporated (NYSE:MA) has been covered by 22 Wall Street analysts and 21 of them maintain a Buy or an Overweight rating on the company shares. Their average price target of $399.42 holds an over 15% upside from the current stock price of $346.16 at the time of writing.
On December 6, Mastercard Incorporated (NYSE:MA) increased its quarterly dividend by 16% to $0.57 per share from the previous $0.46. The company has a yield of 0.66% on December 27. On top of that, Mastercard Incorporated (NYSE:MA) announced a share buyback program of $9 billion for its Class A stocks. The company said that the new program will begin once the previous buyback program is complete. The existing buyback program was worth $8 billion and $3.9 billion worth of outstanding shares were remaining on December 1.
Here is what Stewart Asset Management had to say about Mastercard Incorporated (NYSE:MA) in its Q3 2022 investor letter:
“We invest in businesses with strong, resilient earnings growth which are less cyclical. In the pandemic recession of 2020, the aggregate earnings of the portfolios we manage did not decline year-over-year, and in fact grew, albeit modestly. Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. During this same period, Mastercard’s (NYSE:MA) earnings almost tripled.
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) is a California-based financial services company. It is one of the world’s most valuable brands as well as one of the largest payment processing companies. The company provides electronic funds transfer services primarily through credit, debit, and prepaid cards.
Visa Inc. (NYSE:V) was held by 165 hedge funds in the third quarter of 2022, with a combined value of $22.48 billion. TCI Fund Management was the most significant shareholder in the company with $3.54 billion worth of shares. Berkshire Hathaway was the third largest stakeholder in the company with 8.297 million shares, worth $1.474 billion. The firm has held on to Visa Inc. (NYSE:V) shares since Q3 2011.
On December 27, Wells Fargo analyst Donald Fandetti maintained an Overweight rating on Visa Inc. (NYSE:V)’s shares and raised the price target to $250 from $225. According to the analyst, the company can still deliver a 20% EPS growth rate in the future.
Here is what Baron Funds had to say about Visa Inc. (NYSE:V) in its Q2 2022 investor letter:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Visa, Inc. (NYSE:V). These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 269
Amazon.com, Inc. (NASDAQ:AMZN) is an American multinational technology company. The company’s most significant areas of business are e-commerce, cloud computing, entertainment, and digital distribution.
Amazon.com, Inc. (NASDAQ:AMZN) is our top pick among Warren Buffett stock picks for beginners as it is the company with the most amount of hedge fund holders in Q3 according to our database. Out of 269 hedge funds that hold a stake in the company, Fisher Asset Management took the top spot with 49.895 million of the company shares, worth $6.44 billion. Berkshire Hathaway gave a 0.4% weightage to Amazon.com, Inc. (NASDAQ:AMZN) in its portfolio and owned around 10.666 million shares, valued at $1.2 billion.
On December 16, JPMorgan analyst Doug Anmuth reiterated an Overweight rating on Amazon.com, Inc. (NASDAQ:AMZN)’s shares and lowered the firm’s price target to $130 from $145.
You can also take a look at the 11 Best Small Cap AI Stocks To Buy and the 12 Best Seasonal Stocks To Buy.
