3 no-nonsense Warren Buffett stocks to buy right now

When Warren Buffett talks, investors listen. And when Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) It files its Form 13F — which goes through the holding company’s most recent transactions — with the Securities and Exchange Commission (SEC), investors are starting to take stock.

The most recent 13F had two new positions and a few smaller trades. But the bulk of the stock portfolio, which has 41 stocks at the moment, has remained the same. Buffett is a big believer in long-term investing, and his preferred holding period is famously “forever.”

Amazon (NASDAQ: AMZN) and Coca cola (NYSE: KO) there are two no-brainer stocks to buy right now and I will add a new position, The ultimate beauty (NASDAQ: ULTA)to that list as well.

1. Amazon: The artificial intelligence (AI) stock.

Amazon is one of the few tech stocks that Buffett owns. In fact, he only bought in 2019, after he had already made millionaires. Buffett doesn’t go for glitz or hype; he prefers stability and value. It’s an approach that has helped him beat the market during his decades at the helm of his holding company, even as he shuns fast-growing stocks.

Amazon has become the second largest company in the US by sales and is reliable for cash and profitability. That’s why even though it’s a tech stock that embraces new trends, it still fits into Buffett’s scheme. It’s one of the few AI stocks you’ll find in Berkshire Hathaway’s portfolio.

Of course, Amazon is much more than AI. It has an unmatched global e-commerce business, accounting for nearly 38% of all US e-commerce. This is a moat that is impenetrable to any true short-term competitor. However, it does not take any chances and capitalizes on its position to further increase customer loyalty by speeding up services and offering a wider range of products.

It is also the global leader in cloud computing and bolsters Amazon Web Services (AWS) with a massive array of high-level AI services. It has a three-tiered system to work with any type of customer, and CEO Andy Jassy pointed out that “In the last 18 months, AWS has released more than twice as many machine learning and generative AI features into general availability than all other major cloud providers combined.”

Amazon is on the rise and has many growth factors that make it an outstanding stock.

2. Coca-Cola: The classic Buffett stock

Coca-Cola is one of three stocks Buffett said he would never sell. He loves its brand, dominance and dividends and is his top holding. In fact, when investors talk about Buffett’s preferred holding period being forever, what he actually said was “When we own parts of outstanding businesses with outstanding management, our preferred holding period is forever,” and he he was talking about Coca-Cola.

The story continues

Coca-Cola actually came under severe pressure before CEO James Quincey took over in 2017, and Buffett still held on. Having Quincey on board proved providential, as Coca-Cola began turning things around before the pandemic and was in good hands to weather the decline. It is well past that now and has shown resilience in the inflationary climate.

Coca-Cola’s growth opportunities may be more limited than those of a typical growth stock, but it continues to innovate with new beverages and product types. The company has a strong balance sheet and cash on hand and is able to acquire smaller companies that generate some of its larger growth. Coca Cola then brings these newer beverages into its unrivaled global distribution system, resulting in increased presence, sales and efficiency. It’s an incredible model that leverages the strength of its core brands along with the growth potential of new ones.

The company has managed to weather the pressures of the current environment and is well positioned to maintain its top spot as a leading global beverage company. It’s also as reliable as a Dividend King can be for growing passive income.

3. Ulta Beauty: Buffett’s surprise stock

I’m not sure too many investors saw it when Berkshire Hathaway’s most recent 13F filing came out included a new position in Ulta Beauty, but it’s a stock that fits the Buffett model well. It has a distinct approach to selling beauty products and has grown to an impressive number of nearly 1,400 stores giving it a leading position over competitors trying to copy them. While it’s still opening new stores, with plans for up to 65 this year, it’s loyal shoppers that drive growth and generate opportunities for more.

Ulta is definitely feeling some inflationary pressure right now, but its business concept is intact. It reported a small 1.6% rise in comparable sales in the first fiscal quarter of 2024 (ended May 4), but what really drove the stock down were margins and outlook. Operating margin fell from 16.8% to 14.7%, and management lowered its full-year guidance for revenue, comparable sales, operating margin and earnings per share (EPS).

It’s easy to see why Buffett chose Ulta right now. It’s down 18% over the past year, and that includes the jump after news of Buffett’s purchase. At the current price, it trades at a price-to-earnings (P/E) ratio of 14, which seems undervalued compared to its opportunity. An industry leader at a cheap price is right up Buffett’s alley, and Ulta Beauty stock looks like a great buy for any individual investor.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Jennifer Saibil has no position in any of the shares mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway and Ulta Beauty. The Motley Fool has a disclosure policy.

3 no-brainer Warren Buffett stocks to buy right now was originally published by The Motley Fool