Growth Stock Portfolio: 5 Stock Picks By Warren Buffett

In this article, we discuss the top 5 growth stock picks of Warren Buffett. If you want to see more stocks in this selection, check out Growth Stock Portfolio: 10 Stock Picks By Warren Buffett. 

5. VeriSign, Inc. (NASDAQ:VRSN)

Number of Hedge Fund Holders: 35

P/E Ratio as of November 9: 24.03

VeriSign, Inc. (NASDAQ:VRSN) is a Virginia-based company providing network infrastructure, facilitating internet connections and communications in the United States. Warren Buffett owned 12.8 million shares of VeriSign, Inc. (NASDAQ:VRSN) in the second quarter of 2022, worth $2.14 billion and representing 0.71% of the total 13F portfolio. It is one of the best growth stocks to invest in as per Berkshire Hathaway. 

On October 27, VeriSign, Inc. (NASDAQ:VRSN) reported its Q3 results, posting a GAAP EPS of $1.58 and a revenue of $356.9 million, up 6.8% year-over-year. During the third quarter, VeriSign, Inc. (NASDAQ:VRSN) repurchased 1.5 million units of its common stock for an aggregate price of $275 million.

According to Insider Monkey’s data, 35 hedge funds were long VeriSign, Inc. (NASDAQ:VRSN) at the end of Q2 2022, compared to 41 funds in the prior quarter. Jim Simons’ Renaissance Technologies is a prominent stakeholder of the company, with approximately 4 million shares worth $662 million.  

Here is what Baron Asset Fund has to say about VeriSign, Inc. (NASDAQ:VRSN) in its Q4 2021 investor letter:

“Verisign, Inc. provides internet infrastructure services worldwide and is best known for its exclusive role managing the .com and .net domains, for which it receives annual fees from all those domain owners. Shares of Verisign gained after reporting strong revenue growth and operating margins that exceeded Wall Street forecasts. We continue to be positive on Verisign’s business, based on its strong competitive position, capacity for global growth in domain names, and its ongoing ability to generate substantial free cash flow.”

4. Activision Blizzard, Inc. (NASDAQ:ATVI)

Number of Hedge Fund Holders: 84

P/E Ratio as of November 9: 30.08

Activision Blizzard, Inc. (NASDAQ:ATVI) is an American video game developer that is soon to be acquired by Microsoft. It is one of the premier growth stocks in the Warren Buffett portfolio. The billionaire owned 68.40 million shares of Activision Blizzard, Inc. (NASDAQ:ATVI) in the second quarter of 2022, worth $5.3 billion and representing 1.77% of the total holdings. 

On September 15, Atlantic Equities analyst Kunaal Malde upgraded Activision Blizzard, Inc. (NASDAQ:ATVI) to Overweight from Neutral with a price target of $84, down from $95.

According to Insider Monkey’s data, 84 hedge funds were long Activision Blizzard, Inc. (NASDAQ:ATVI) at the end of the second quarter of 2022, compared to 80 funds in the prior quarter. Matthew Halbower’s Pentwater Capital Management is one of the leading position holders in the company, with approximately 9 million shares worth $695 million. 

Here is what Cooper Investors specifically said about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q2 2022 investor letter:

“Activision Blizzard, Inc. (NASDAQ:ATVI) – our investment preceded news that the company was under investigation for workplace bullying. When it became clear management had misled the market on the extent of the problem we sold, led by our principles of Responsible Investing. We did not benefit from the subsequent M&A premium paid by Microsoft.”

3. Moody’s Corporation (NYSE:MCO)

Number of Hedge Fund Holders: 48

P/E Ratio as of November 9: 31.92

Moody’s Corporation (NYSE:MCO) is a New York-based integrated risk assessment firm. It operates in two segments – Moody’s Investors Service and Moody’s Analytics. It is one of the best growth stocks according to Warren Buffett. The Berkshire portfolio has 24.6 million shares of Moody’s Corporation (NYSE:MCO) as of Q2 2022, worth $6.70 billion. 

On November 7, Atlantic Equities analyst Simon Clinch raised the price target on Moody’s Corporation (NYSE:MCO) to $292 from $290 and kept a Neutral rating on the shares following the Q3 results. Moody’s Corporation (NYSE:MCO) is largely exposed to the difficult fundamentals in global debt issuance, the analyst told investors in a research note.

According to Insider Monkey’s data, 48 hedge funds were bullish on Moody’s Corporation (NYSE:MCO) at the end of June 2022, compared to 56 funds in the earlier quarter. Chris Hohn’s TCI Fund Management is one of the leading position holders in the company, with 8.2 million shares worth $2.24 billion. 

Here is what Qualivian Investment Partners has to say about Moody’s Corporation (NYSE:MCO) in its Q2 2021 investor letter:

“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”

2. The Kraft Heinz Company (NASDAQ:KHC)

Number of Hedge Fund Holders: 41

P/E Ratio as of November 9: 38.88

The Kraft Heinz Company (NASDAQ:KHC) is a New York-based company that manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. On October 26, The Kraft Heinz Company (NASDAQ:KHC) declared a quarterly dividend of $0.40 per share, in line with previous. The dividend is payable on December 30, to shareholders of record on November 25. The forward yield was 4.32%. The company continues to expect robust financial performance for 2022 and reaffirmed 2022 organic net sales growth of a high single-digit percentage increase versus the same period last year.

Securities filings for the second quarter of 2022 reveal that Warren Buffett owns 325.6 million shares of The Kraft Heinz Company (NASDAQ:KHC), worth $12.4 billion and representing 4.13% of the total securities.

On October 14, Morgan Stanley analyst Pamela Kaufman maintained an Equal Weight rating on The Kraft Heinz Company (NASDAQ:KHC) but lowered the firm’s price target on the shares to $37 from $41.

According to Insider Monkey’s data, 41 hedge funds were bullish on The Kraft Heinz Company (NASDAQ:KHC) at the end of Q2 2022, compared to 35 funds in the last quarter. Jean-Marie Eveillard’s First Eagle Investment Management is a significant position holder in the company, with 6.5 million shares worth $249 million. 

1. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 128

P/E Ratio as of November 9: 22.83

Apple Inc. (NASDAQ:AAPL) is the largest holding of Warren Buffett’s Berkshire portfolio, and it is one of the top growth picks of the hedge fund. Berkshire Hathaway owns approximately 895 million shares of Apple Inc. (NASDAQ:AAPL) as of Q2 2022, worth $122.3 billion and representing 40.76% of the total portfolio. 

On November 8, Morgan Stanley analyst Erik Woodring maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) but trimmed the price target on the shares to $175 from $177 after the company announced that the renewal of COVID-19 restrictions at the China facility is negatively impacting iPhone 14 Pro and Pro Max production. However, the analyst called this “a supply problem, not a demand problem.” As such, he views this as an “opportunity to ‘buy the dip’,” but added that tracking the iPhone production scenario “remains key”.

According to Insider Monkey’s data, 128 hedge funds were long Apple Inc. (NASDAQ:AAPL) at the end of the second quarter of 2022, compared to 131 funds in the last quarter. Ken Fisher’s Fisher Asset Management is a significant stakeholder of the company, with 65.6 million shares worth about $9 billion.  

Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

You can also take a look at Goldman Sachs Energy Stocks and 10 Best Safe Dividend Stocks for Retirement Portfolios.

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