The Best Warren Buffett Stocks to Buy for $700 Right Now

Do you want to make money in the stock market? Be sure to track the stocks that are Berkshire Hathawayhis portfolio. Buffett has run Berkshire for decades, proving himself to be one of the best investors of all time, and monitoring the positions he’s ultimately responsible for can give your portfolio a head start.

If you want to follow Buffett’s best ideas, the two stocks below are for you.

This is one of Buffett’s best stock picks

In 2011, Buffett made one of his best stock purchases ever. The company? None other than Visa (V 0.79%). You’re probably very familiar with Visa as a brand, but you may not know what makes the company such an incredible investment.

When Buffett first bought shares in Visa, the stock price was between $30 and $40. Today, the stock price is approaching $300. Meanwhile, the market capitalization is around $550 billion and we have speculated that the company could eventually cross the $1 trillion mark. What factors have driven Visa’s historic success, and why is the company poised for more success in the years and decades to come? It all adds up to a valuable competitive advantage that continues to strengthen over time.

Almost everyone reading this right now has heard of Visa. Many of them have a Visa credit or debit card in their wallet right now. Why? Because Visa has a stranglehold on the US credit and debit card market. Data compiled by Statista shows the company with a domestic market share of 61%. Only three companies control the remaining 39%. Suffice to say this is a very consolidated market. And it’s not hard to see why. Payment networks like Visa are driven by network effects. Network effects describe how a company or service becomes more valuable as more people use it. Because payment networks must connect customers, merchants and financial institutions, the network that connects the most nodes seamlessly will win. This dynamic naturally favors scale, creating a handful of giant competitors like Visa and MasterCard.

A large scale has given Visa not only a sustainable competitive advantage, but also impressive profitability. Its return on capital is close to 50% despite minimal leverage. And profit margins in the last quarter reached 55%. And yet, the stock trades at just 28 times earnings — slightly less than S&P 500 average. Buffett still owns $2.2 billion in Visa stock. Both growth and value investors should consider joining the suit.

V PE ratio data by YCharts

Looking for maximum growth? Check out this company

Buffett is not known for being a growth investor. But in recent years, Berkshire has loaded up on many companies that have managed to generate strong growth. One of those companies is Not Holdings (NOT -0.87%). Berkshire has amassed a stake in this fintech business worth more than $1 billion. It’s not hard to see what he loves about the company.

Nu is essentially a bank — but not just any bank. It only offers its services in Latin American countries such as Brazil, Mexico and Colombia, exclusively through a smartphone. This is a huge departure from history, where a handful of powerful incumbent banks have charged consumers high prices for simple services through brick-and-mortar branches. It didn’t disrupt the status quo by going direct to customers with service and pricing that the competition couldn’t match. In less than a decade, it went from virtually zero customers to over 100 million. More than half of Brazilian adults are now Nu customers. And growth continues to climb. Despite a $70 billion market cap, Nu is consistently growing sales by 50% to 100% per quarter, year over year.

The stock isn’t cheap at 45 times earnings, but few companies have that kind of growth profile. In a few years, the current multiple will probably look like a steal. Berkshire has not sold any shares since acquiring its stake. Investors looking for maximum upside should take a closer look.