Even with stocks near record highs, fabled investor Warren Buffett thinks they are still a fantastic place to put money. To back that argument up, Buffett and his team continue to deploy cash by the hundreds of millions every quarter through his holding company Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B).
In recent years, Berkshire has continued to purchase old favorites in the banking industry, but has also begun adding newer names in the technology sector. Here is one old and two newer Berkshire faves that our Motley Fool contributors think should be on your radar JPMorgan Chase (NYSE:JPM), Coca-Cola (NYSE:KO), and Amazon.com (NASDAQ:AMZN).
The cream of U.S. banking
Nicholas Rossolillo (JPMorgan Chase): Over the last 12 months, shares of America’s largest bank by total assets haven’t budged. Revenue and earnings keep steadily climbing, but investors keep fretting over a myriad of economic conditions that may or may not indicate trouble for the global economy. Buffett took the opportunity to add JPMorgan to his portfolio over the fall of 2018 and has steadily increased the position ever since.
After posting record revenue and earnings in 2018 and another 5% and 12% increase, respectively, during the first quarter of 2019, JPMorgan shares trade at a humble 11.5 times trailing 12-month profits; based on one-year forward earnings expectations, the stock is valued at just 10.8 times profits. That looks like a mighty cheap price to pay for one of the most efficient banking empires on the planet.
Of course, a global economic slowdown — maybe even a recession — could be brewing. The trade war between the U.S. and China keeps heating up, and a stubbornly inverted yield curvehas many worried that tumultuous times are right around the corner. That helps explain why JPMorgan’s stock is down again. If the gathering clouds do rain on the economy’s parade, the stock could fall further. Or it might not.
Thus, following Buffett’s lead and buying small lots of the stock over time could be a great long-term move right now. Along the way, investors get to collect a 3% dividend yield on one of the best banking plays around…
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