The 5 New Stocks that Warren Buffett Is Buying

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The 5 New Stocks that Warren Buffett Is BuyingWarren Buffett is arguably the best investor of our time, so it pays to watch Berkshire Hathaway's (BRK.A) (BRK.B) quarterly filings. It's there, after all, where the Oracle of Omaha reveals the stocks that he's buying and selling.

When Buffett announced back in September that Berkshire Hathaway would be spending some of its gargantuan cash balance to repurchase its own stock, heads turned. Buffett had never done that before. Bulls took it as a sign that Buffett saw ridiculous value in the stock of his own holding company. Bears took it as a sign that there was nothing else out there worth buying.

Well, it turns out that Buffett did do quite a bit of buying during the months of July, August, and September.

A Peek Inside Buffett's Bag of Goodies

Even before the filing came out, Buffett was on CNBC, revealing that he had taken a roughly $10 billion stake in IBM (IBM). It's easy to see the appeal of IBM. The company has been a consistent producer. It shrewdly expanded from hardware to higher-margin business services well before today's scrambling PC makers.

With this week's filing, we can now take a look at five of Berkshire's new investments.

1. Intel (INTC): IBM and Intel? The same Buffett that rightfully eschewed tech stocks during the dot-com bubble doesn't appear to be tech-shy these days. Intel is the world's leading market of microprocessors. "Intel Inside" is its old slogan, and now Intel is inside Berkshire Hathaway.

2. DIRECTV (DTV): Buying the country's leading satellite television company may be risky these days. Rivals Comcast (CMCSA) and DISH (DISH) have been shedding video subscribers lately. However, armed as the exclusive provider of the NFL Sunday Ticket, DIRECTV has been able to consistently grow its subscriber base at premium rates.

3. Visa (V): Buffett already owns a chunk of MasterCard (MA), so why not buy into the matching set? Visa and MasterCard are in a sweet spot as we become a cashless society. They are credit card marketers, collecting a steady stream of fees. They aren't subject to the credit risks behind their plastic, since it's the issuing banks that are on the hook for deadbeat swipers. In short, it's a financial services play without the financial services risk.

4. CVS Caremark (CVS): The company behind the leading CVS drugstore chain also is a major player in prescription benefits management through Caremark. It's a reasonable play on the aging -- and prescribing -- of America, backed by the all-weather allure of manning a drugstore.

5. General Dynamics (GD): As one of the top dogs among defense contractors, General Dynamics may seem like an odd choice for Buffett in these deficit-strapped times. However, General Dynamics has managed to consistently boost its dividends in all climates. The best defense is a strong payout offense.

What Would Buffett Do?

Knowing where Buffett is investing his capital isn't reason enough for investors to sell all of their stocks and only buy into these six companies. Warren wouldn't approve of that strategy. However, now may be a good time to commit some due diligence to seeing which of Buffett's new toys are worth playing with in your own portfolio.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Berkshire Hathaway, Intel, General Dynamics, International Business Machines, and MasterCard. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Intel and Berkshire Hathaway. Motley Fool newsletter services have recommended creating a bull call spread position in Intel.




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11 Comments

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traincity1

Screw Buffet

June 07 2012 at 8:32 PM Report abuse rate up rate down Reply
jgshink1

ok i am dumb , not smart ok Buffet stock was at 170k 2years ago and now at about 110k per share or so

what is it I dont understand , no split no div ps; let me know

December 29 2011 at 11:15 AM Report abuse rate up rate down Reply
midsr4kids

I don't get it..why does huff - puff worship this uber capitalist? Isn't he by thier definition evil? And obama can't get enough of this guy. I think buffet-obama are in a kabal to take over america, where buffet becomes the "vendor" of choice with dumbo as a puppet tyrant dictator..only speculating here..the police acted stupidly you know...unless they are in obama-buffets sanctioned police state

November 22 2011 at 11:07 AM Report abuse +2 rate up rate down Reply
jhbonz

How's that BAC and GS working out for you Warren?

November 22 2011 at 10:36 AM Report abuse +1 rate up rate down Reply
jshackstone

Money & happyness, well dumbass, learn how to do it.

November 21 2011 at 6:51 PM Report abuse rate up rate down Reply
ANDY

Here is a agnostic who likes to invest in cigarettes because , as he said, you make one for a penny, sell it for a dollar , and it is addictive. He loves money and the apparent infamy with it. He is worshipped as some kind of hero. He finally decided , and what a revelation, that he can't take it with him. So, to add to his infamy, he will give it to the gates foundation after death. Money and fame to evils at times. Andy

November 19 2011 at 10:40 AM Report abuse rate up rate down Reply
dabrownman

Everyone wants to buy the same stock as an 80 year old who says he won't buy technology because he is too senile to understand it and it scares him worse than vampires and werewolves. His businesses have underperformed for decades nowntoo.,

November 18 2011 at 7:35 PM Report abuse rate up rate down Reply
1 reply to dabrownman's comment
alfredschrader

He's 81. Buffett moving BH assets is about as exciting as watching paint dry.

November 19 2011 at 5:33 AM Report abuse +2 rate up rate down Reply
emurphy1951

The Buffett organization could have invested $10Bn to capitalize 10,000 new small businesses @ $1,000,000 per business. perhaps that would create new jobs and far greater value.

November 18 2011 at 1:05 PM Report abuse +7 rate up rate down Reply
1 reply to emurphy1951's comment
dabrownman

I'm surprised his Messiah hasn't confiscated his wealth and done so being the Marxist as a Socialist he is.

November 19 2011 at 12:21 PM Report abuse rate up rate down Reply
1 reply to dabrownman's comment
docmetcalf1955

yeah. i was thinking the same thing

November 21 2011 at 8:20 AM Report abuse rate up rate down