3 Warren Buffett stocks to buy Hand Over Fist in October

Warren Buffett’s stock options can be anything but spectacular, but that’s about the point. Given enough time, the value works. And in Buffett’s case Berkshire Hathawayoften exceeds. You would be wise to borrow some of his ideas whenever possible.

To that end, here’s a closer look at three Berkshire holdings you may want to add to your own portfolio this month as well.

1. Visa

Berkshire Hathaway does not own a massive stake in the credit card company Visa (V 0.39%)for the record. His position of 8.3 million shares is worth only about $2.3 billion. That’s less than 1% of Berkshire’s total stock value (and less than 1% of Visa itself).

Don’t mistake this relatively small position as a sign that this company’s potential is limited, however. The payments market is not just moving away from cash. It embraces digital ecosystems like the ones Visa can offer merchants and institutional customers.

Case(s): Earlier this year, these payment intermediaries introduced platforms created specifically for Latin American governments. These tools include a means of collecting tax revenue, streamlining government property purchases, and even making public payments such as stimulus payments or welfare.

Also earlier this year, Visa unveiled technology that allows merchants to not only accept card-based payments, but also build their own customer loyalty programs. Each such tool expands Visa’s breadth and depth, ultimately expanding its reach and revenue.

And the numbers confirm this. While the global economy has been rather lethargic this year, Visa’s third-quarter revenue rose 10% year over year on a 7% increase in total payment volume, extending trends that have been a year. It’s not huge, but it clearly exceeds global economic growth.

Analysts expect this peak growth rate to continue for at least a few more years, though given the scope of the opportunity to replace other forms of payments (in addition to introducing new profit centers that help merchants better connect with consumers), this growth could take years.

By the way, this past and projected revenue growth is leading to even faster revenue growth. This is a high margin business that is growing very cost efficiently.

2. Occidental Petroleum

It would be easy to put oil and gas stocks as Occidental Petroleum (OXY 1.77%) on the shelf to be forgotten forever, especially given the recent retreat of this stock — along with crude oil –. Not only are more environmentally friendly alternatives now available, but April’s 20% drop in crude oil is a reminder of how easily this business can be shaken and then unleashed by unpredictable geopolitical tensions. It’s just not worth it.

Other than that, maybe it is worth it – at least for Warren Buffett. There’s a reason Berkshire isn’t just sticking with it, it’s also keeping Occidental as its sixth-largest holding, currently worth around $13 billion. The reason is that oil (and gas) is not yet on its death bed.

Don’t misread the message. Alternatives like solar and nuclear power are here to stay. Even in the relatively advanced United States; however, fossil fuels still account for about 60 percent of our utilities’ total electricity production, according to the U.S. Energy Information Administration, while renewables generate only about a fifth of that. Including automobiles, crude oil alone accounts for more than a third of the country’s annual energy consumption, with natural gas accounting for more than a third.

Connecting the dots, it could take years for alternative energy sources to replace oil as the nation’s primary energy source, especially given the growing need for electricity. Let’s assume the same applies in other parts of the world.

To that end, the United States Energy Information Administration believes that crude oil alone could still be the planet’s largest source of energy by 2050. There is a lot of money to be made from drilling, extracting, and refining oil. meanwhile.

Obviously, there are several solid oil and gas stocks that would work very well for your portfolio. However, Buffett is partial to Occidental Petroleum and its management team. As he wrote in his 2023 annual letter to Berkshire Hathaway shareholders:

“Under Vicki Hollub’s leadership, Occidental is doing the right thing for both its country and its owners. No one knows what oil prices will do in the next month, year or decade. But Vicki knows how to separate the oil from the rock, and that is an unusual talent, valuable to her shareholders and to her country.”

You might be wise to trust Warren Buffett’s personal judgment on this one.

3. No Holdings

Finally, add Not Holdings (NOT 0.99%) to your list of Warren Buffett stocks to buy first hand in October. It’s not a last name. In fact, there’s a good chance you’ve never heard of it. Don’t let the lack of familiarity put you off, though.

There’s a reason you’ve never heard of it. It’s because Nu Holdings is an online bank built to serve the Latin American market. It already boasts over 100 million customers spread across Brazil, Mexico and Colombia, though that only scratches the surface of the ultimate opportunity. South and Latin America is home to more than 600 million people, most of whom have only recently been given reasons to explore such options.

And this is the key to understanding Buffett’s interest in this seemingly unlikely Berkshire Hathaway holding.

In short, Latin America is now, in many ways, where North America was 20 years ago. High-speed internet was still young back then, and smartphones were relatively uncommon. However, we were on the verge of a game-changer between both technologies, which would put shopping, entertainment, banking and information in everyone’s hands via a mobile device.

Perhaps the biggest difference between here and there is that Latin America is evolving as a “mobile-first” market, meaning most of its consumers use their smartphones as their primary web connection.

Whatever the case, it’s a ready market for Nu Holdings’ offerings. Technavio’s market research team suggests that the banking-as-a-service market in the region is poised to grow at an annual rate of over 19% per year through 2028, in line with other forecasts.

And obviously, Nu is already capitalizing on that growth. Currency-adjusted revenue last quarter improved 65% year-over-year, doubling net income.

It’s not a huge position for Berkshire Hathaway. As of the most recent figure, Berkshire holds just under $1.5 billion in overseas online banking. But the fact that Buffett and his lieutenants own any of these unknown companies, however, speaks volumes about its potential.