Should You invest in Warren Buffett’s Top Stocks? – American Express Company (AXP), International Business Machines Corp. (IBM), Wells Fargo & Co. (WFC)

I have been writing a lot about Warren Buffett. That said, he recently gave us all plenty of material to talk about and, after all, he is the greatest investor in modern history. His recently released letter to Berkshire Hathaway‘s shareholders tell us a lot about his investment style and what he is expecting for the future. Besides, the letter is a fast and great way to learn about his investment achievements.The letter reads: “Over the last 48 years (that is, since present management took over), book value has grown from $19 to $114,214, a rate of 19.7% compounded annually.” That is what I would call great proven performance!

It is easy to grasp how proud he is about his biggest public investment positions. They are all very well managed companies that, through their durable business motto (competitive advantages), have helped the sage of Omaha accumulate billions over the years. Most importantly to you and I, Buffett expects his main investments to continue delivering great results going forward.

Berkshire’s “Big Four” public investments are: American Express Company (NYSE:AXP), International Business Machines Corp. (NYSE:IBM), The Coca-Cola Company (NYSE:KO) and Wells Fargo & Co. (NYSE:WFC). As he admitted in his letter, Berkshire’s ownership interests in all four companies are likely to increase in the future. He not only does not plan to sell any shares, but also he will always consider buying more if Mr. Market offers a good enough entry price. As a matter of fact, Berkshire purchased additional shares of Wells Fargo & Co. (NYSE:WFC) increasing its stake to 8.7% from 7.6% (that the company had accumulated at the end of 2011). It also bought additional shares of International Business Machines Corp. (NYSE:IBM) Increasing its stake from 5.5% to 6%. At Coca-Cola and American Express Company (NYSE:AXP) share repurchases made Berkshire’s stake grow to 8.8% and 13.7% respectively. Let’s do a recap on each of those “Big Four” and see if they could be good candidates for your own personal portfolio at current market prices.

American Express Company (NYSE:AXP)

The company has a wonderful business model that offers low risk growth all across emerging markets and a sustainable cash flow stream in the US. American Express Company (NYSE:AXP) grows revenue at a very steady 5% year-over-year rate offering an also very stable14% net income margin. Selling at a 2013 13.5 P/E, the company seems cheap given the amazing quality of its clients and the sustainability of the cash flows the company offers to shareholders. American Express Company (NYSE:AXP) pays a small 1.24% cash dividend yield, but it is growing it fast at a 11% year-over-year rate.

International Business Machines Corp. (NYSE:IBM)

International Business Machines Corp. (NYSE:IBM) is the latest addition to Buffett’s “Big Four” list. When I saw on the news that Berkshire had made a big investment in International Business Machines Corp. (NYSE:IBM), I started my research on the company. International Business Machines Corp. (NYSE:IBM) built amazing corporate relationships through offering the highest service quality when providing Information Technology solutions. Let’s put it like this: If you are the CIO of any big company and you hire International Business Machines Corp. (NYSE:IBM) you know you will not be fired. International Business Machines Corp. (NYSE:IBM) trades at a 2013 12.5 P/E and is growing its 1.6% dividend at a 13% year-over-year rate.