Warren Buffett, the legendary chairman and CEO of the renowned holding company Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), stands as a luminary in the realm of stock picking, boasting a stupendous portfolio valued at over $370 billion today. Yet, even the Sage of Omaha has his shortcomings; stocks he missed, stocks he sold too early, longing to have them back on his investing shelf. In this vein, there exist certain equities that embody traits that would make even the Oracle of Omaha envious.
Chipotle Mexican Grill (CMG)
Chipotle Mexican Grill (NYSE:CMG) ticks many boxes that would pique Buffett’s interest in a stock. It exhibits a robust management structure, specializing in Mexican cuisine, fortified by a sturdy competitive moat. Additionally, Chipotle boasts a devoted customer base and the potent ability to adjust pricing without compromising its clientele.
Although CMG stock may raise eyebrows with its valuation trading at 65 times forward earnings, Buffett would undoubtedly appreciate its growth trajectory. Over the past five years, Chipotle’s share price has surged by a remarkable 330%, with an 80% ascent in the last 12 months – a surge outpacing many tech stocks. While not offering dividends, Chipotle recently announced a 50-for-1 stock split to enhance accessibility for investors.
JPMorgan Chase (JPM)
Moving onto bank stocks, Buffett has notably held shares of JPMorgan Chase (NYSE:JPM) at various junctures, significantly building a position in 2018 and subsequently exiting amidst inflation concerns in late 2020. Rumors are now rife that JPMorgan might be the undisclosed stock that has piqued Buffett’s current interest – whether true or not, JPM stock embodies characteristics that the Oracle of Omaha would covet.
Being a dividend aficionado, Buffett would surely appreciate JPMorgan’s recent upticks in quarterly dividend payouts, now standing at $1.15 per share, yielding above 2%. Furthermore, with a modest 11 times future earnings estimate valuation, JPM stock has notably appreciated by 52% in the past year, including a 15% gain year-to-date.
Costco Wholesale (COST)
Costco Wholesale (NASDAQ:COST) stands as another stock that once graced Buffett’s portfolio, only to be subsequently offloaded. This move, particularly surprising given Buffett’s late partner Charlie Munger’s vocal admiration for COST stock, underscores the essence of recurrent membership fees, an elite 92% customer renewal rate, and a competitive edge.
Buffett would likely acknowledge the stalwart management at Costco, especially marked by the recent CEO appointment – only the third in Costco’s illustrious 40-year history. Also noteworthy is Costco’s penchant for disbursing special, one-time dividends to shareholders. On January 12 this year, Costco distributed a special cash dividend amounting to $15 per share – a move that resonated well with many analysts, deeming COST stock a quintessential Buffett hold.
Buffett’s disposition toward COST stock spanned from 1999 until June 2020, when he divested of 4.3 million shares valued at $1.3 billion. The rationale for this transaction remained undisclosed, with rumors swirling around excessive valuation as a potential deterrent. Nonetheless, since its departure from Buffett’s portfolio almost four years ago, Costco’s stock has more than doubled, underlining its resilience and growth potential.
