5 Top-Performing Stocks Warren Buffett, Tom Gayner Agree On

Both gurus insist on a margin of safety

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Jun 14, 2022
Summary
  • Buffett and Gayner both focus on a margin of safety when building their portfolio.
  • The combined portfolio has several stocks that have outperformed the S&P 500 over the past three months.
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According to the All-in-One Screener, a Premium feature of GuruFocus,

Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) and Tom Gayner (Trades, Portfolio)’s Markel Corp. (MKL, Financial) have several holdings in common as of the first-quarter 13F filing. Among their common holdings, five stocks that have outperformed the Standard & Poor’s 500 Index over the past three months are Johnson & Johnson (JNJ, Financial), Celanese Corp. (CE, Financial), Marsh & McLennan Companies Inc. (MMC, Financial), Mastercard Inc. (MA, Financial) and Visa Inc. (V, Financial).

Background

Buffett’s Omaha, Nebraska-based insurance conglomerate applies a value investing approach that branches from his mentor Benjamin Graham’s investing style. Buffett and co-Berkshire chairman

Charlie Munger (Trades, Portfolio) seek good companies at fair prices and always insist on a margin of safety.

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Likewise, while Markel’s primary business is property and casualty insurance, Gayner oversees the investing activities for the Glen Allen, Virginia-based company. Markel Gayner outlined in a 2019 shareholder letter that its investing discipline considers companies that have good rates of return, solid management teams and opportunities to reinvest capital and grow organically. The company seeks to invest in the stock of companies at attractive prices: The long-term returns should be similar to the underlying growth in the company’s intrinsic value.

As the two investors have similar investing styles, GuruFocus’ All-in-One Screener listed several stocks that both investors agree on according to first-quarter 13F equity portfolio filings.

Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.

Johnson & Johnson

Berkshire and Markel have a combined weight of 1.30% in Johnson & Johnson (

JNJ, Financial).

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Shares of Johnson & Johnson traded around $167.46, showing the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.96. The stock has outperformed the S&P 500 benchmark by approximately 11.98% over the past three months.

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The New Brunswick, New Jersey-based drug manufacturer has a GF Score of 90 out of 100 based on a profitability rank of 9 out of 10, a growth rank of 8 out of 10, a financial strength rank of 7 out of 10 and a rank of 6 out of 10 for momentum and GF Value.

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Celanese

Berkshire and Markel have a combined weight of 0.32% in Celanese (

CE, Financial). Buffett’s conglomerate purchased 7,880,998 shares during the first quarter.

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Shares of Celanese traded around $136.21, showing the stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.69. The stock has outperformed the S&P 500 by approximately 10.74% over the past three months.

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The Irving, Texas-based chemical company has a GF Score of 90 out of 100 based on a GF Value rank of 10 out of 10, a financial strength rank of 6 out of 10, and a rank of 8 out of 10 for profitability, growth and momentum.

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Marsh & McLennan

Berkshire and Markel have a combined weight of 1.27% in Marsh & McLennan (

MMC, Financial).

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Shares of Marsh & McLennan traded around $147.26, showing the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.05. The stock has gained approximately 9.28% over the past three months.

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The New York-based risk and insurance company has a GF Score of 95 out of 100, driven by a momentum rank of 9 out of 10 and a rank of 10 out of 10 for profitability and growth despite financial strength and GF Value ranking just 5 out of 10.

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Mastercard

Berkshire and Markel have a combined weight of 1.27% in Mastercard (

MA, Financial).

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Shares of Mastercard traded around $322.14, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.79. The stock has gained approximately 9.05% over the past three months.

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The Purchase, New York-based credit card company has a GF Score of 98 out of 100, driven by a GF Value rank of 9 out of 10 and a rank of 10 out of 10 for profitability, growth and momentum despite financial strength ranking just 6 out of 10.

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Visa

Berkshire and Markel have a combined weight of 3.04% in Visa (

V, Financial).

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Shares of Visa traded around $193.52, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.76. The stock has outperformed the benchmark by approximately 8.38% over the past three months.

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The San Francisco-based payment processing company has a GF Score of 99 out of 100, driven by a rank of 10 out of 10 for profitability, growth and GF Value, a financial strength rank of 7 out of 10 and a momentum rank of 8 out of 10.

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Disclosures

I am/we currently own positions in the stocks mentioned, and have NO plans to sell some or all of the positions in the stocks mentioned over the next 72 hours. Click for the complete disclosure
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