Berkshire Hathaway recently disclosed that it purchased $1 billion of Apple stock, which deviates from Buffett’s typical mentality to avoid technology stocks because he doesn’t understand them. The Apple purchase was made by Berkshire portfolio managers Todd Combs and Ted Weschler, who make investments of $1 billion or less, not by Buffett himself, so it could be an indication of an easing of some of his typical investment restrictions.
Aside from being a technology stock, Apple actually has many of the fundamental characteristics Buffett looks for in his investments, including consistent earnings growth and high return on equity and total capital, and our approach based on Warren Buffett that we offer on Validea.com has scored Apple highly for some time now. So for this week’s guru screen of the week, we take a look at some other names our Buffett model likes. Based on their fundamentals, they may also be worthy of the Oracle of Omaha’s consideration.
To create the screen, I used the Validea Guru Stock Screener to select stocks with strong interest from the Warren Buffett strategy with a 100% score and a market cap of greater than or equal to $500 million (to eliminate companies too small for Berkshire to consider). The following stocks pass the test.