As investors grapple with market volatility over the new coronavirus variant, four stocks in Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio)'s equity portfolio that have high business predictability and are trading near 52-week lows are Globe Life Inc. (GL, Financial), DaVita Inc. (DVA, Financial), Mastercard Inc. (MA, Financial) and Visa Inc. (V, Financial).
Markets stage rebound despite continuing volatility due to Omicron
On Thursday, the Dow Jones Industrial Average traded near an intraday high of 34,722.56, up 700.52 points from Wednesday’s close of 34,022.04.
Stocks rebounded from Wednesday’s selloff as the U.S. reported its first case of the new Omicron coronavirus variant. Despite this, the Biden administration tightened travel restrictions as the U.S. reported a second case of the Omicron variant Thursday morning.
In light of the high volatility, investors may find opportunities in the stocks Berkshire owns that have high business predictability and are trading near their 52-week lows. Buffett and co-Berkshire manager Charlie Munger (Trades, Portfolio) listed four key criteria for good companies at fair prices: understandable business, favorable growth prospects, shareholder-oriented management and low valuations.
Globe Life
Shares of Globe Life (GL, Financial) traded around $88.08, approximately 2.72% above its 52-week low. The stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.81.
GuruFocus ranks the McKinney, Texas-based insurance company’s profitability 7 out of 10 on several positive investing signs, which include a five-star business predictability rank and a net profit margin that outperforms more than 75% of global competitors.
Berkshire owns 6,353,727 shares of Globe Life, giving the position 0.19% weight in its $293.45 billion equity portfolio.
DaVita
Shares of DaVita (DVA, Financial) traded around $97.93, approximately 3.22% above its 52-week low. The stock is fairly valued based on Thursday’s price-to-GF Value ratio of 0.91.
GuruFocus ranks the Denver-based kidney dialysis provider’s profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, a high Piotroski F-score of 7 and profit margins and returns that outperform more than 70% of global competitors.
Berkshire owns 36,095,570 shares of DaVita, giving the position 1.43% equity portfolio weight.
Other gurus with holdings in DaVita include Larry Robbins (Trades, Portfolio)’ Glenview Capital Management, Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.
Mastercard
Shares of Mastercard (MA, Financial) traded around $316.71, approximately 3.5% above its 52-week low. The stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.83.
GuruFocus ranks the Purchase, New York-based credit card company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a return on equity that outperforms more than 95% of global competitors and an operating margin that has increased approximately 0.80% per year on average over the past five years.
Berkshire owns 4,288,648 shares of Mastercard, giving the position 0.51% equity portfolio weight.
Visa
Shares of Visa (V, Financial) traded around $198.68, approximately 4.1% above its 52-week low. The stock is fairly valued based on Thursday’s price-to-GF Value ratio of 0.93.
GuruFocus ranks the San Francisco-based payment processing company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 7 and profit margins and returns that outperform more than 80% of global competitors.
Berkshire owns 9,562,460 shares of Visa, giving the position 0.73% equity portfolio weight.
See also
Other Berkshire stocks trading near 52-week lows include Verizon Communications Inc. (VZ, Financial), T-Mobile US Inc. (TMUS, Financial), Teva Pharmaceutical Industries Ltd. (TEVA, Financial) and Bristol-Myers Squibb Co. (BMY, Financial).
