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Warren Buffett, President and CEO of Berkshire Hathaway Inc. BRK.B, is a great role model if you want to be a savvy investor. He has accumulated a fortune of more than $ 87 billion during his career after entering the investment game fairly early.
Buffett's investment style is pretty simple. It uses a more qualitative approach to select companies that have stood the test of time. These companies have strong business models and can record significant growth. In other words, these companies have good revenue potential and do not care if the market will recognize its value. By the way, they also generate a lot of money and pay dividends, indicators of a solid and sustainable activity.
So let's focus on the Oracle of Omaha, the preferred companies that can make the most of the fourth quarter. Most of these companies belong to sectors such as finance, technology, communication services and airlines.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Why not Berkshire Hathaway?"data-reactid =" 34 ">Why not Berkshire Hathaway?
As early as 1962, Warren Buffett began acquiring stakes in Berkshire Hathaway after setting a trend in the price direction of his shares when the company closed a plant. Buffett acknowledged that the textile factory was losing money, which led to growing in the insurance industry. The insurance business has borne fruit, as evidenced by the impressive performance of more than 800% of Berkshire since its inception.
In addition, the insurance sector should be in the fourth quarter. After all, policymakers under Jerome Powell's presidency unanimously decided to raise the federal funds rate by 25 basis points to 2-2.25% after the end of the two-day meeting on September 26 . The Fed also announced a further rise in December and another three next year (read more: The Fed releases a third increase in rates in 2018: the top 5 winners).
It goes without saying that this insurer derives its investment income from investment premiums received from policyholders in corporate and government bonds. Yields and coupons on these bonds increase in response to rising interest rates. This allows insurers to invest their premiums at higher returns and earn higher investment income, thereby increasing their profit margins.
Berkshire currently has a Zacks Rank # 2 (Buy). Over the past 60 days, three earnings estimates have increased, but none has declined for the current year. The consensus estimate of Zacks earnings increased by 12.5% over the same period. The Company's expected earnings growth rate for the current year is 68.9% compared to the expected increase in the non-life insurance segment of 22.9%. Berkshire has already outperformed the entire industry so far this year (+ 8.4% vs. + 6.4%).
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Why does Buffett continue to buy Apple?"data-reactid =" 55 ">Why does Buffett continue to buy Apple?
Buffett already holds more than 110 million shares of Apple Inc. AAPL. Thus, Apple now accounts for more than 20% of Berkshire's portfolio. But why does Buffett continue to increase his stake in Apple? It's because he thinks that Apple is a phenomenal company based on innovation and the key initiatives taken by founder and former CEO, Steve Jobs. Buffett described Apple as "a very, very special product, with an extremely large and extremely sticky ecosystem."
The iPhone is Apple's most important product since its sales account for more than half of total revenue. But what has changed in recent years is the composition of its sales. According to Magellan Asset Management, 45% of iPhone sales have been sold to new users since 2012. However, in the fourth quarter, 20% of iPhone sales are for new users, while 80% are sold as a handset. replacement to existing users. This means that profits will be more stable in the form of recurring profits, rather than sales of unique phones. This again prompted the legendary investor to bet on the technology giant based in Cupertino, California.
Apple recently became the first US company with a market capitalization greater than $ 1 trillion and a No. 2 Zacks rank. Over the past 60 days, three earnings estimates have increased, but none has declined for the current year. The consensus estimate of Zacks earnings increased by 0.2% over the same period. The company's profit growth rate for the current year is 27.7%, compared to 25% for the mini-computer industry. To date, Apple has surpassed the industry at large (+ 34.3% against + 33.1%).
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Buffett deepens his knowledge in the telecoms sector"data-reactid =" 79 ">Buffett deepens his knowledge in the telecoms sector
After buying shares of big names in the telecommunications sector, including Verizon Communications Inc. VZ, DISH Network Corporation, DISH and Charter Communications, Inc. CHTR, to name a few, he plunged into the world by buying Liberty Latin America Ltd. LILA. It now holds more than $ 1 billion in total equity in broadband Internet, high-speed Internet, landline and mobile phone service providers.
Buffett showed an interest in the telecommunications space, which he had avoided in the past. After all, historically, the broad technology sector has been a winner in the fourth quarter. Over the past two decades, technology has grown more than two-thirds in the fourth quarter, according to market experts.
Liberty Latin America is currently ranked 2 by Zacks. Over the last 60 days, an earnings estimate has increased but none has decreased for the current year. The consensus estimate of Zacks on earnings climbed 38% over the same period. The company's expected growth rate for the next quarter is 90.5%, while the domestic wireless industry is expected to post a deficit of 78.3%. Liberty Latin America has already outperformed the entire industry this year (+ 4.8% vs. -3.9%).
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Time and time again, Buffett has shown considerable interest in buying equity interests in airlines. In fact, Buffett once declared that he "would not rule out the possession of an entire airline". He already holds stakes in major airlines such as American Airlines Group Inc. AAL, LUV Southwest Airlines Co. and Delta Air Lines, Inc. DAL. These airlines are now charging more for checked baggage and these fees are likely to improve their bottom line in the fourth quarter. These three traditional players announced an increase in the prices of the first and second checked baggage.
But the one that stands out is Southwest Airlines. After all, he is wearing a Zacks Rank # 2. Over the past 60 days, four earnings estimates have advanced, while another has declined for the current year. The estimate of Zacks consensus on profits has improved by 0.5% over the same period. The expected growth rate of the company's profits for the current year is 20%, unlike the expected decline of 7.2% in the Air Transport sector. Southwest Airlines has already outperformed the entire sector over the past year (+ 4.8% vs. -11.1%).
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Best stock of electric cars? You will never guess it.
Zacks Research has released a report that could shock many investors. An action is the best way to invest in the rise of electric cars. And that's not the one you can think of!
Just like oil 150 years ago, lithium battery power will shake the world, create millionaires and transform geopolitics. Soon, electric vehicles (EVs) may be cheaper than energy consumers. Some already reach 265 miles with a single charge. With the fall in battery prices and the proliferation of charging stations, revenues, which already amounted to $ 31 billion in 2016, should exceed $ 67 billion by the end of 2022.
See Zacks Best EV Stock Free >>"data-reactid =" 121 ">Best stock of electric cars? You will never guess it.
Zacks Research has released a report that could shock many investors. An action is the best way to invest in the rise of electric cars. And that's not the one you can think of!
Just like oil 150 years ago, lithium battery power will shake the world, create millionaires and transform geopolitics. Soon, electric vehicles (EVs) may be cheaper than energy consumers. Some already reach 265 miles with a single charge. With the fall in battery prices and the proliferation of charging stations, revenues, which already amounted to $ 31 billion in 2016, should exceed $ 67 billion by the end of 2022.
See Zacks Best EV Stock Free >>
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Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
Southwest Airlines Co. (LUV): Free Stock Analysis Report
American Airlines Group Inc. (AAL): free stock analysis report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
Charter Communications, Inc. (CHTR): Free Stock Analysis Report
DISH Network Corporation (DISH): Report of Analysis of Free Shares
Liberty Global PLC (LILA): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report
To read this article on Zacks.com, click here. "Data-reactid =" 122 ">
Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
Southwest Airlines Co. (LUV): Free Stock Analysis Report
American Airlines Group Inc. (AAL): free stock analysis report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
Charter Communications, Inc. (CHTR): Free Stock Analysis Report
DISH Network Corporation (DISH): Report of Analysis of Free Shares
Liberty Global PLC (LILA): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report
To read this article on Zacks.com, click here.
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