Berkshire's Breakout Stocks: 5 Names Showing Strength and Buffett-Approved Fundamentals

Berkshire's Breakout Stocks: 5 Names Showing Strength and Buffett-Approved Fundamentals

Warren Buffett is known for his long-term, fundamentals-first investing approach. But some of the stocks in Berkshire Hathaway’s portfolio are not just value plays – they’re momentum leaders too. Below, we highlight five Berkshire holdings that are showing breakout strength, based on 12-month relative strength and year-to-date (YTD) returns. These stocks combine price performance with Buffett-style fundamentals like strong moats, brand power, and disciplined capital allocation.

Relative strength measures how a stock has performed compared to the broader market or its sector over a specific period – typically 6 or 12 months. A high relative strength score means the stock has outperformed most others in that time frame, reflecting strong price momentum. While Buffett is not known as a momentum investor, many of his holdings are high-quality businesses that naturally become market leaders.

Top 5 Breakout Stocks in Berkshire Hathaway’s Portfolio

1. Verisign (VRSN)

  • 12M Relative Strength: 87
  • P/E Ratio: 34.0
  • Why Buffett Might Like It: Verisign operates a core piece of the internet’s infrastructure, managing domains like .com and .net. It benefits from a monopoly-like position, strong recurring revenue, and very little capital expenditure.
  • Key Attributes: Digital tollbooth model, wide moat, high free cash flow margins.

2. Capital One Financial (COF)

  • 12M Relative Strength: 84
  • P/E Ratio: 16.1
  • Dividend Yield: 1.3%
  • Why Buffett Might Like It: COF’s unique blend of consumer banking and credit card lending, combined with a tech-forward approach, gives it a differentiated place in financial services. Its valuation remains compelling.
  • Key Attributes: Technological advantage, consumer scale, disciplined capital management.

3. Charter Communications (CHTR)

  • 12M Relative Strength: 84
  • P/E Ratio: 10.9
  • Why Buffett Might Like It: Charter’s broadband business provides dependable cash flows, and its shareholder-friendly capital allocation through massive buybacks aligns with Berkshire’s values.
  • Key Attributes: Recurring revenue, large-scale buybacks, infrastructure moat.

4. T-Mobile US (TMUS)

  • 12M Relative Strength: 82
  • P/E Ratio: 23.9
  • Dividend Yield: 1.3%
  • Why Buffett Might Like It: TMUS is emerging as a dominant force in 5G, combining customer growth, high profitability, and now capital returns.
  • Key Attributes: Telecom leadership, robust cash generation, efficient cost structure.

5. Visa Inc. (V)

  • 12M Relative Strength: 81
  • P/E Ratio: 36.8
  • Dividend Yield: 0.6%
  • Why Buffett Might Like It: Visa’s network effects and its central role in global commerce make it an ideal Buffett-style business. Its consistent growth and low capital intensity provide powerful compounding potential.
  • Key Attributes: Scalable model, secular payment growth, high margins.

Conclusion

These five breakout stocks combine two essential ingredients of long-term investing success: fundamental strength and relative market leadership. For investors looking to follow Buffett’s lead while keeping an eye on price momentum, these Berkshire holdings offer a compelling blend of quality and performance.

Further Research

Related Articles

  • Related Articles