The Best Warren Buffett Stocks to Buy With $1,000 Right Now

Motley Fool
18 Apr
  • The past few weeks have been tough ones for Apple shareholders, thanks to disappointment on the AI front. Just be patient.
  • VeriSign isn't a high-growth name, but it is a revenue and earnings growth juggernaut.
  • Many investors are making following Buffett's lead far too complicated. Here's a no-brainer alternative.

Got an extra $1,000 you're ready to put to work for a while but don't know what to buy? Don't make it complicated. Borrow a pick or two -- or more -- from the market's most proven stock picker. That's Warren Buffett, of course, chief investment guru of Berkshire Hathaway (BRK.A 0.82%) (BRK.B 0.39%), which regularly outshines the S&P 500's long-term performance. Credit Buffett's stock-picking prowess, mostly.

With that as the backdrop, here's a closer look at three Buffett/Berkshire holdings that would be good all-around picks for nearly investor.

Apple

It's such a frequently suggested pick that it's almost become cliché. Nevertheless, Apple (AAPL 1.36%) is a prospect that would be at home in almost everyone's portfolio.

Not everyone will necessarily agree with this call. Revenue stagnated again following 2021's modest progress, in step with stagnating iPhone sales (which accounts for about half of the company's top line). Shares rallied last year on the belief that the company's newer artificial intelligence (AI)-capable smartphones would reignite growth. But, as it turns out, what the company's calling Apple Intelligence isn't quite the draw it was hoped. Indeed, the latest version of its AI-powered virtual assistant Siri can arguably be considered a flop that's since been sent back to the proverbial drawing board. The subsequent dent in the company's reputation is the big reason Apple shares are now down more than 20% from their late-2024 peak.

Don't jump to long-term conclusions about this company's long-term future based on its near-term results, however. This is still Apple. While it was undeniably late to the AI party and admittedly launched the newest version of Siri before it was ready, artificial intelligence still plays prominently in everyone's future.

Market research outfit Next Move Strategy Consulting predicts the consumer-facing sliver of the AI market is set to grow at an annualized pace of 28% through 2030, while Market.us believes the worldwide personal AI assistant market will grow at an average annual pace of 38% between now and 2034. People just need a little more education, and a little more time.

This tailwind of course bodes well for Apple.

This might convince you: Although Berkshire's been paring back its stake in Apple of late, at a value of $60 billion it's still by far the conglomerate's single biggest position, making up more than 20% of its stock holdings.

VeriSign

While Apple is a name everyone's heard of, VeriSign (VRSN 0.27%) is anything but. It's not even a particularly big deal to Buffett and his lieutenants. Although Berkshire owns 14% of the company, with only 13.3 million shares worth a grand total of $3.3 billion, VeriSign only makes up 1.2% of Berkshire's holdings in publicly traded companies.

Still, the fact that Buffett wants to own any size piece of VeriSign is telling, and bullish.

In simplest terms, VeriSign is the organization responsible for registering websites that end with a ".com" and ".net" suffix. It also handles ".cc" and ".name" sites, but dot-coms and dot-nets make up the bulk of world's websites. The company also offers a handful of cyber defense and technological solutions, but domain registrations are its big business.

There are registration fees involved, of course, albeit modest ones. The World Wide Web is also already pretty well crowded, with not a great deal of need for new sites. That's why single-digit revenue growth here is the norm.

What VeriSign lacks in growth firepower, however, it more than makes up for in consistency. Revenue has grown every single quarter (year over year) for well over a decade now, in fact, while operating income has grown almost as a reliably, and certainly just as quickly. Plenty of companies envy this steady forward progress.

VRSN Revenue (TTM) data by YCharts

It makes sense, of course. After all, the internet is here to stay.

VeriSign isn't a cheap stock, mind you. Indeed, thanks to a pronounced run-up since late last year the stock's trading at nearly 30 times this year's expected per-share earnings of $8.68, and within sight of analysts' consensus price target of $267.50. You could have gotten this stock at a lower price just a few months back. And you might be able to buy it cheaper at some point in the foreseeable future.

As Buffett reminds investors though, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." In other words, holding out for a bargain price often ends up hurting more than helping.

Berkshire Hathaway

Finally, it's a frequently glossed-over fact that Buffett doesn't directly own many -- if any -- of what are often called "Warren Buffett stocks." These stocks in question are almost always just equities held by the Berkshire Hathaway company. The bulk of Buffett's personal wealth is instead actually tied up in the 15% (equivalent) of Berkshire that he directly holds, which of course means he only indirectly owns a piece of every so-called "Buffett stock."

The thing is, you can do the very same for yourself. That is to say, you can own the very same sort of stake in Berkshire Hathaway that Buffett himself does. At a price of just over $500 apiece, in fact, a $1,000 investment would get you a couple of Berkshire's Class B shares.

Doing so would certainly solve a lot of problems for investors looking for an easy, efficient way of buying and holding a Buffett-approved portfolio, too. Not only will you own a proportional stake in everything that Buffett and his lieutenants like, any changes they might make to Berkshire's holdings are automatically made on your behalf -- not unlike a mutual fund or exchange-traded fund (ETF).

It's the other nuance, however, that makes this option a brilliant choice. That's the fact that holding a position in Berkshire Hathway shares means you own a stake in several dozen privately held cash-cow companies that make up roughly one-third of the conglomerate's total market cap. These include Clayton Homes, GEICO Insurance, Duracell, Dairy Queen, Pilot Travel Centers, and flooring company Shaw just to name a few. These cash-generating outfits play a crucial role in Buffett's bigger-picture strategy, which can sometimes include just accumulating a war chest while waiting for the right opportunity to present itself.

This strategy has proven brilliant time and time again, including recently. Despite being underinvested with than $100 billion worth of idle cash on the books since 2019 and more than $300 billion just since late last year, Berkshire shares have easily beaten the market over the course of the past three years, reclaiming their long-term lead as a result.

There's no reason to think the underpinning of this performance will be any different in the near or distant future either.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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