Are you caught running out of ideas of stocks to invest in, now that the stocks seem to be rebounding? Perhaps Warren Buffett can help you.
Last Summer, following Warren Buffett’s advice of investing in companies that have proven and predictable earning, GuruFocus published its research on effects of Business Predictability and Valuation on stock returns in the past 10 years in this and this articles. Basically, we reverse engineered [url=http://www.gurufocus.com/StockBuy.php?GuruName=Warren+Buffett]Warren Buffett-Charlie Munger’s stock-picking methodology and published on GuruFocus.com.
As of today, Warren Buffett's Berkshire Hathaway invests in these highly predictable companies:
UnitedHealth Group Inc. (UNH, Financial)
UnitedHealth Group Inc. offers health care coverage and related services. It has a market cap of $24.81 billion; its shares were traded at around $20.41 with a P/E ratio of 6.8 and P/S ratio of 0.3. The dividend yield of UnitedHealth Group Inc. stocks is 0.2%. UnitedHealth Group Inc. had an annual average earning growth of 30.4% over the past 10 years. GuruFocus rated the business predictability of Unitedhealth Group Inc. 5-Star.
Warren Buffett started to own this stock in 2006 when the stock was traded above $46. He increased his holding in the company from 1.0 million shares in 2006 to 6.3 million shares at year end of 2008.
Besides Warren Buffett, eleven other Investment Gurus also owned this health insurance company as of December 31, 2008. Among them, Dodge & Cox has the most shares, a hefty 52 million shares or 4.31% of the company. Chris Davis, Edward Owens, Bruce Berkowitz, Bill Miller, and David Dreman all own more shares than Warren Buffett. (see the table below)
The Home Depot Inc. (HD, Financial)
Home Depot is the one of world's largest home improvement retailer. Home Depot Inc. has a market cap of $34.47 billion; its shares were traded at around $20.33 with a P/E ratio of 11.6 and P/S ratio of 0.4. The dividend yield of The Home Depot Inc. stocks is 4.4%. The Home Depot Inc. had an annual average earning growth of 19.5% over the past 10 years. GuruFocus rated the business predictability of The Home Depot Inc. 5-Star.
Warren Buffett started to own the stock in or before 2005 with a little less than one million shares. By year end of 2008, he had 3.7 million shares. Many other Investment Gurus also own HD: again Dodge & Cox owns the most with almost 46 million shares and Charles Brandes follows with 26 million shares. Edward Lampert has almost 20 million shares and that is 5.86% of his entire portfolio. (see the table below)
Lowe's Companies Inc. (LOW, Financial)
Lowe's Companies Inc. is Home Depot’s rival as a retailer of home improvement products in the world with specific emphasis on retail do-it-yourself and commercial business customers. Lowe's Companies Inc. has a market cap of $22.94 billion; its shares were traded at around $15.61 with a P/E ratio of 10.4 and P/S ratio of 0.4. The dividend yield of Lowe's Companies Inc. stocks is 2.1%. Lowe's Companies Inc. had an annual average earning growth of 21.4% over the past 10 years. GuruFocus rated the business predictability of Lowe's Companies Inc. 5-Star.
Warren Buffett started to own LOW in or before 2005 with less than 1 million shares. By year end of 2008, he had 6.5 million shares. Among the Investment Gurus we track, Chris Davis and David Dreman own more shares than Warren Buffett, 11.7 million shares and 6.9 shares respectively. (see the table below)
WalMart Stores Inc. (WMT, Financial)
Wal-Mart Stores Inc. is the world's largest retailer. WalMart Stores Inc. has a market cap of $191.97 billion; its shares were traded at around $48.94 with a P/E ratio of 14.2 and P/S ratio of 0.5. The dividend yield of WalMart Stores Inc. stocks is 2%. WalMart Stores Inc. had an annual average earning growth of 13.3% over the past 10 years. GuruFocus rated the business predictability of Wal-Mart Stores Inc. 5-Star.
Warren Buffett maintained an ownership of about 20 million shares of WMT since 2005.
Aside from Warren Buffett, Dodge & Cox, Ken Heebner, Kenneth Fisher, Ruane Cunniff, and Jean-Marie Eveillard also own shares of Wal-Mart as of December 2008:
Iron Mountain Inc. (IRM, Financial)
Iron Mountain Incorporated is one of the world's largest records and information management services company. The company is an international full-service provider of records and information management and related services enabling customers to outsource records management functions. Iron Mountain Inc. has a market cap of $4.02 billion; its shares were traded at around $19.91 with a P/E ratio of 26.9 and P/S ratio of 1.3. Iron Mountain Inc. had an annual average earning growth of 16.7% over the past 10 years. GuruFocus rated the business predictability of Iron Mountain Inc. 5-Star.
Warren Buffett has owned the stock since before 2002 when he owned 27 million shares. He has been a net seller of this stock and as of December 31, 2008, he had 3.3 million shares. Other Gurus, Chris Davis and Ron Baron also own the stock:
Johnson & Johnson (JNJ, Financial)
Johnson & Johnson manufactures and sells of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Johnson & Johnson has a market cap of $135.53 billion; its shares were traded at around $49 with a P/E ratio of 10.7 and P/S ratio of 2.1. The dividend yield of Johnson & Johnson stocks is 3.8%. Johnson & Johnson had an annual average earning growth of 12.5% over the past 10 years. GuruFocus rated the business predictability of Johnson & Johnson 4.5-Star.
Warren Buffett owned the stock since 2006. His ownership peaked in 2008 at 61 million shares. In 4Q 2008 he had to sell some of JNJ in order to buy into some other “sweetheart deals”, such as Perpetual Preferred Stocks in Goldman Sachs and GE. Among the Investment Gurus, Warren Buffett owns the most of JNJ, followed by Prem watsa, Kenneth Fisher, Chris David, and Brian Rogers.
Buffett-Munger Screener
These are just the highly Predictable companies that Warren Buffett own. If you want to have a list of companies to start with, we have developed for you a screener that is called “Buffett-Munger Screener”. The stocks that can make into this screener are:
1. Companies that have high Predictability Rank, that is, companies that can consistently grow its revenue and earnings.
2. Companies that have competitive advantages. It can maintain or even expand its profit margin while growing its business
3. Companies that incur little debt while growing business
4. Companies that are fair valued or under-valued. We use PEPG as indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past 5 years.
The screener is here. It is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.
Last Summer, following Warren Buffett’s advice of investing in companies that have proven and predictable earning, GuruFocus published its research on effects of Business Predictability and Valuation on stock returns in the past 10 years in this and this articles. Basically, we reverse engineered [url=http://www.gurufocus.com/StockBuy.php?GuruName=Warren+Buffett]Warren Buffett-Charlie Munger’s stock-picking methodology and published on GuruFocus.com.
As of today, Warren Buffett's Berkshire Hathaway invests in these highly predictable companies:
UnitedHealth Group Inc. (UNH, Financial)
UnitedHealth Group Inc. offers health care coverage and related services. It has a market cap of $24.81 billion; its shares were traded at around $20.41 with a P/E ratio of 6.8 and P/S ratio of 0.3. The dividend yield of UnitedHealth Group Inc. stocks is 0.2%. UnitedHealth Group Inc. had an annual average earning growth of 30.4% over the past 10 years. GuruFocus rated the business predictability of Unitedhealth Group Inc. 5-Star.
Warren Buffett started to own this stock in 2006 when the stock was traded above $46. He increased his holding in the company from 1.0 million shares in 2006 to 6.3 million shares at year end of 2008.
Besides Warren Buffett, eleven other Investment Gurus also owned this health insurance company as of December 31, 2008. Among them, Dodge & Cox has the most shares, a hefty 52 million shares or 4.31% of the company. Chris Davis, Edward Owens, Bruce Berkowitz, Bill Miller, and David Dreman all own more shares than Warren Buffett. (see the table below)
| Guru Name | Current Shares | % of Shares Outstanding ↓ | % of Total Assets Managed | Change from Last Holdings |
| Dodge & Cox | 52396231 | 4.31 | 2.13 | 30.09% |
| 29884391 | 2.46 | 1.51 | -2.5% | |
| 19885100 | 1.64 | 3 | 3.21% | |
| 18231878 | 1.5 | 6.81 | -11.9% | |
| 15553400 | 1.28 | 4.27 | -2% | |
| 12129434 | 1 | 4.18 | -11.72% | |
| 6300000 | 0.52 | 0.32 | -1.25% |
The Home Depot Inc. (HD, Financial)
Home Depot is the one of world's largest home improvement retailer. Home Depot Inc. has a market cap of $34.47 billion; its shares were traded at around $20.33 with a P/E ratio of 11.6 and P/S ratio of 0.4. The dividend yield of The Home Depot Inc. stocks is 4.4%. The Home Depot Inc. had an annual average earning growth of 19.5% over the past 10 years. GuruFocus rated the business predictability of The Home Depot Inc. 5-Star.
Warren Buffett started to own the stock in or before 2005 with a little less than one million shares. By year end of 2008, he had 3.7 million shares. Many other Investment Gurus also own HD: again Dodge & Cox owns the most with almost 46 million shares and Charles Brandes follows with 26 million shares. Edward Lampert has almost 20 million shares and that is 5.86% of his entire portfolio. (see the table below)
| Guru Name | Current Shares | % of Shares Outstanding ↓ | % of Total Assets Managed | Change from Last Holdings |
| Dodge & Cox | 45617766 | 2.69 | 1.6 | -3.99% |
| 26414402 | 1.56 | 2.94 | -7.5% | |
| 19715300 | 1.16 | 5.85 | 0% | |
| HOTCHKIS & WILEY | 11884543 | 0.7 | 2.62 | -25.68% |
| 10600768 | 0.63 | 2.84 | -35.14% | |
| 9750000 | 0.58 | 1.66 | 0% | |
| 5264690 | 0.31 | 1.61 | 35.39% | |
| 3700000 | 0.22 | 0.16 | 0% |
Lowe's Companies Inc. (LOW, Financial)
Lowe's Companies Inc. is Home Depot’s rival as a retailer of home improvement products in the world with specific emphasis on retail do-it-yourself and commercial business customers. Lowe's Companies Inc. has a market cap of $22.94 billion; its shares were traded at around $15.61 with a P/E ratio of 10.4 and P/S ratio of 0.4. The dividend yield of Lowe's Companies Inc. stocks is 2.1%. Lowe's Companies Inc. had an annual average earning growth of 21.4% over the past 10 years. GuruFocus rated the business predictability of Lowe's Companies Inc. 5-Star.
Warren Buffett started to own LOW in or before 2005 with less than 1 million shares. By year end of 2008, he had 6.5 million shares. Among the Investment Gurus we track, Chris Davis and David Dreman own more shares than Warren Buffett, 11.7 million shares and 6.9 shares respectively. (see the table below)
| Guru Name | Current Shares | % of Shares Outstanding ↓ | % of Total Assets Managed | Change from Last Holdings |
| 11723799 | 0.8 | 0.48 | -0.06% | |
| 6873982 | 0.47 | 1.91 | -51.2% | |
| 6500000 | 0.44 | 0.27 | 0% | |
| 4786700 | 0.33 | 0.24 | 0.02% | |
| 2441000 | 0.17 | 3.27 | -7.82% | |
| 1099000 | 0.07 | 0.77 | New |
WalMart Stores Inc. (WMT, Financial)
Wal-Mart Stores Inc. is the world's largest retailer. WalMart Stores Inc. has a market cap of $191.97 billion; its shares were traded at around $48.94 with a P/E ratio of 14.2 and P/S ratio of 0.5. The dividend yield of WalMart Stores Inc. stocks is 2%. WalMart Stores Inc. had an annual average earning growth of 13.3% over the past 10 years. GuruFocus rated the business predictability of Wal-Mart Stores Inc. 5-Star.
Warren Buffett maintained an ownership of about 20 million shares of WMT since 2005.
Aside from Warren Buffett, Dodge & Cox, Ken Heebner, Kenneth Fisher, Ruane Cunniff, and Jean-Marie Eveillard also own shares of Wal-Mart as of December 2008:
| Guru Name | Current Shares | % of Shares Outstanding ↓ | % of Total Assets Managed | Change from Last Holdings |
| Dodge & Cox | 25894452 | 0.66 | 2.22 | -21.84% |
| 19944300 | 0.51 | 2.16 | 0% | |
| 7180000 | 0.18 | 5.86 | -9.69% | |
| 6399249 | 0.16 | 1.21 | 7.32% | |
| 2906067 | 0.07 | 2.34 | -0.71% | |
| 2549153 | 0.06 | 1.9 | 132% |
Iron Mountain Inc. (IRM, Financial)
Iron Mountain Incorporated is one of the world's largest records and information management services company. The company is an international full-service provider of records and information management and related services enabling customers to outsource records management functions. Iron Mountain Inc. has a market cap of $4.02 billion; its shares were traded at around $19.91 with a P/E ratio of 26.9 and P/S ratio of 1.3. Iron Mountain Inc. had an annual average earning growth of 16.7% over the past 10 years. GuruFocus rated the business predictability of Iron Mountain Inc. 5-Star.
Warren Buffett has owned the stock since before 2002 when he owned 27 million shares. He has been a net seller of this stock and as of December 31, 2008, he had 3.3 million shares. Other Gurus, Chris Davis and Ron Baron also own the stock:
| Guru Name | Current Shares | % of Shares Outstanding ↓ | % of Total Assets Managed | Change from Last Holdings |
| 40783126 | 20.22 | 1.89 | -0.43% | |
| 5050715 | 2.5 | 1.18 | -18.95% | |
| 3372200 | 1.67 | 0.16 | 0% | |
| 413025 | 0.2 | 0.61 | 0% |
Johnson & Johnson (JNJ, Financial)
Johnson & Johnson manufactures and sells of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Johnson & Johnson has a market cap of $135.53 billion; its shares were traded at around $49 with a P/E ratio of 10.7 and P/S ratio of 2.1. The dividend yield of Johnson & Johnson stocks is 3.8%. Johnson & Johnson had an annual average earning growth of 12.5% over the past 10 years. GuruFocus rated the business predictability of Johnson & Johnson 4.5-Star.
Warren Buffett owned the stock since 2006. His ownership peaked in 2008 at 61 million shares. In 4Q 2008 he had to sell some of JNJ in order to buy into some other “sweetheart deals”, such as Perpetual Preferred Stocks in Goldman Sachs and GE. Among the Investment Gurus, Warren Buffett owns the most of JNJ, followed by Prem watsa, Kenneth Fisher, Chris David, and Brian Rogers.
| Guru Name | Current Shares | % of Shares Outstanding ↓ | % of Total Assets Managed | Change from Last Holdings |
| 28611591 | 1.03 | 3.3 | -53.67% | |
| 7691800 | 0.28 | 8.92 | 29.59% | |
| 7507181 | 0.27 | 1.64 | 2% | |
| 7251433 | 0.26 | 0.82 | 5.09% | |
| 2500000 | 0.09 | 1.11 | -16.67% |
Buffett-Munger Screener
These are just the highly Predictable companies that Warren Buffett own. If you want to have a list of companies to start with, we have developed for you a screener that is called “Buffett-Munger Screener”. The stocks that can make into this screener are:
1. Companies that have high Predictability Rank, that is, companies that can consistently grow its revenue and earnings.
2. Companies that have competitive advantages. It can maintain or even expand its profit margin while growing its business
3. Companies that incur little debt while growing business
4. Companies that are fair valued or under-valued. We use PEPG as indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past 5 years.
The screener is here. It is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.
