Ever since his first stock purchase on March 11, 1942, Warren Buffett has had a majority of his net worth in U.S. stocks. He recently wrote to Berkshire Hathaway stockholders, "And so far, so good." The millionaire owns several wonderful stocks that other investors should like. However, some stand out. Buy these three Buffett stocks like crazy in March.
1. Amazon The Amazon purchase wasn't initiated by Buffett. One of his two investment managers started Berkshire's e-commerce and cloud services position in 2019. Buffett has always admired Amazon and regretted not buying the shares sooner.
Amazon is more appealing now than when Berkshire bought it. For instance, the corporation may be focusing more on profitability and free cash flow than previously. Its efforts are paying off. Company earnings rose to $10.6 billion in the fourth quarter of 2023 from $300 million the year before.
Amazon earned $36.8 billion in free cash flow in the trailing 12 months ended Dec. 31, 2023, up from $11.6 billion in 2022. I think the company's prospects are stronger too. Generative AI has made cloud migration of apps and data crucial for enterprises. Amazon, the largest cloud services provider, should benefit from this trend.
2. Lennar Berkshire dropped one major U.S. homebuilder in Q4, but still holds two homebuilders in its portfolio. I prefer Lennar (NYSE: LEN) (NYSE: LEN.B). Buffett invests less in value now. His purchase selections still depend on valuation. With a forward price-to-earnings ratio of 10, Lennar shares are cheap.
It would be unattractive if the builder's chances were bad, but they're not. The U.S. housing problem can only be solved by building more homes. As more homes are built, Lennar, the nation's largest homebuilder, will profit. A catalyst may be coming soon. The Fed has hinted about 2024 interest rate reduction. Mortgage rates should fall when the Fed cuts rates. This might improve the housing market and Lennar stock.
3. Occidental Petroleum Buffett wrote in his recent letter to Berkshire shareholders that his business would likely own Occidental Petroleum (NYSE: OXY) "indefinitely." His aggressive stock buying will likely continue.
Berkshire now owns 28.2% of Occidental, up from 27.8% in 2023. The conglomerate can buy up to 50% of Oxy with regulatory permission. Buffett stated in his latest shareholder letter that Berkshire's warrants allow it "to materially increase our ownership" in Occidental over the coming few years.
Why does Buffett love Occidental? First, he praises the company's "vast oil and gas holdings" in America. 2. He thinks Occidental is doing well with carbon capture. I agree with the Oracle of Omaha on both counts. Oil prices may climb, enhancing Occidental's share price. Oxy's direct air capture technique for carbon dioxide removal may be a significant moneymaker in the future.
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