Warren Buffett is famous for betting against Wall Street. So, when analysts and Buffett agree on S&P 500 stocks to own, you’ll want to pay attention.
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Buffett’s Berkshire Hathaway (BRKB) owns stakes in nine stocks — including General Motors (GM), Amazon.com (AMZN) and Chevron (CVX) — that analysts think will run up 20% or more in the next 12 months, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Such universal bullishness is important now. It comes right as some in the analyst community are turning vocally cautious on some individual stocks. Buffett, too, is pulling back a bit. Berkshire sold roughly $1 billion in stock in the second quarter, says Barron’s.
That means the second quarter is “the fourth out of the past five quarters when the company was a net seller of stocks,” Barron’s said.
But analysts and Buffett can still agree on a few S&P 500 Warren Buffett stocks.
Amazon.com : Buffett’s Billion-Dollar Flyer
Amazon.com holds a noteworthy place in Buffett’s portfolio. It’s the most important holding in the Berkshire Hathaway portfolio that analysts still think has more than 25% upside, which Berkshire hasn’t lightened up on.
Berkshire owned more than $1.7 billion in the online retailer’s shares at the end of the second quarter. And Amazon has been a steady holding despite the stock barely moving this year. Analysts, though, think Amazon stock should be worth 28.8% more in 12 months than it is now. It closed Tuesday at 3,241.96, and analysts’ target is 4,171. Should you buy Amazon.com stock now?
It’s important to note, though, that Buffett is still dipping his toe in the water with Amazon. It accounts for just 0.6% of his U.S.-listed holdings. Compare that with the whopping 43.5% of the Berkshire portfolio in Leaderboard stock Apple (AAPL). Berkshire holds roughly 5.4% of Apple’s shares outstanding, worth $133.3 billion.
But Apple gets somewhat of a lukewarm reception with analysts. They only think Apple’s shares will rise 8.7% in the next 12 months.
GM: Warren Buffett Stock With Room To Run In The S&P 500
General Motors is still the Warren Buffett stock analysts like most.
Analysts think the automaker’s stock will be worth 71.87 in 12 months. If that’s right, it would mark more than 40% upside from Tuesday’s closing price of 50.47. That’s more implied percentage-basis upside than in any shares Buffett owns in analysts’ minds.
It’s true, Buffett lightened up a bit on GM during the second quarter by selling 7 million shares. But that’s only a roughly 10% paring. And following GM’s 21.2% jump in value this year, Buffett’s position in GM is still worth more than $3 billion. That’s still 4% of GM, and accounts for roughly 1% of the value of Berkshire’s U.S.-listed portfolio.
Similarly, analysts like another Warren Buffett stock: energy firm Chevron. They’re calling for the company to be worth nearly 22% more in 12 months than it is now.
Buffett eased up a bit on Chevron, too, in the second quarter. Berkshire sold about a half a million shares in the period. But keep in mind, that’s only a 2.3% size reduction for a stock that’s up 19% this year. Berkshire still owns more than 23 million shares, valued at $2.3 billion. He owns about 1.2% of the company. Should you buy Chevron stock now?
Wall Street And Buffett Don’t See Eye To Eye
Don’t worry, though. Buffett is still a maverick who disagrees with analysts on most stocks.
Analysts continue to be “meh” on his No. 2-largest holding, Bank of America (BAC). Analysts only see a lackluster 5% in upside in the financial stock in the next 12 months. And yet, it’s still a huge holding for Berkshire. Buffett owns more than a billion shares, valued of $41.5 billion. BofA accounts for nearly 14% of Berkshire Hathaway’s U.S.-listed portfolio, second only to the huge Apple position.
And Buffett and analysts couldn’t be further apart than they are on grocery chain Kroger (KR). Buffett is filling up his cart with Kroger. He upped Berkshire’s position by more than 20%, or 10.7 million shares, in the second quarter. Berkshire Hathaway now owns more than 8% of the company, a rapid accumulation to 0.9% of the U.S.-listed portfolio.
Analysts, though, think Buffett is way off. They think Kroger, at 45.44 a share, is overvalued by more than 15%.
So rest assured, there’s still a huge void between Omaha and Wall Street — even though the two may agree on a few S&P 500 stocks.
Warren Buffett Stocks Analysts Can Love
U.S.-listed holdings by Berkshire Hathaway with 20% or greater upside to analysts’ 12-month price targets
| Company | Symbol | YTD stock % change | Implied upside to analysts’ price target | Value of Berkshire Hathaway position (in millions) |
|---|---|---|---|---|
| General Motors | (GM) | 21.2% | 42.4% | $3,028 |
| Liberty SiriusXM | (LSXMA) | 10.8% | 32.7% | $711 |
| Teva Pharmaceutical | (TEVA) | -1.8% | 28.8% | $406 |
| Amazon.com | (AMZN) | -0.5% | 28.7% | $1,729 |
| Chevron | (CVX) | 19.3% | 21.9% | $2,329 |
| Sirius XM Holdings | (SIRI) | -3.9% | 21.4% | $267 |
| Liberty Latin America | (LILA) | 18.0% | 20.3% | $34 |
| T-Mobile US | (TMUS) | 4.3% | 20.3% | $737 |
| Merck | (MRK) | -3.6% | 20.1% | $721 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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