The 3 Most Undervalued Warren Buffett Stocks to Buy in February 2024
Several people look to the best investors for stock picks and the mentality of approaching stocks. Given his incredible history of performing well in the stock market, Warren Buffett’s advice and portfolio is preferred by many investors.
The Oracle of Omaha is a value investor who prioritizes finding solid companies trading at good valuations. Viewing his portfolio can offer some investment ideas, but some of those companies have better valuations than others. Let’s examine some of the undervalued Warren Buffett stocks to consider if you are looking for some stock picks this month.
Visa (V)
Visa (NYSE:V) isn’t the highest-flying growth stock but it offers reliability. As long as people continue to use their credit and debit cards, Visa will continue to reward long-term shareholders. Shares have gained 18% over the past year and are up by 95% over the past five years.
The equity trades at a 27.5 forward P/E ratio and continues to deliver top-line and bottom-line growth. Visa opened the first quarter of fiscal 2024 with 9% year-over-year (YOY) revenue growth and 17% YOY net income growth.
Ryan McInerney remarked that consumer spending remained strong in the company’s first quarter. Payment volume increased by 8% YOY while cross-border volume jumped by 16% YOY.
The fintech juggernaut has continued to expand its presence with multiple acquisitions. The company signed an agreement to acquire a majority interest in Prosa, the leading payments processor in Mexico back in December. Then, one month later, Visa put the finishing touches on its acquisition of Pismo, a next-gen banking platform.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) has a lot of new fans after another strong earnings report. The company reported 14% YOY revenue growth in Q4 2023 and had strong revenue growth in advertising and third-party seller services.
Despite a rally that has taken shares up by 116% over the past five years, many analysts believe the stock is still undervalued. The stock holds a 44-forward P/E ratio with exposure to several growth verticals.
Also, analysts took notice and rushed to raise their price targets for Amazon stock. The equity has 39 ratings and all of them are buy ratings. The average price target of $204.29 suggests a 19% upside. The highest price target is $230 which implies a 34% gain from the current price.
Additionally, AMZN offers investors exposure to several industries such as e-commerce, cloud computing, artificial intelligence, and others. Growth rates have been picking up based on the company’s Q4 growth rates exceeding 2023 growth rates. If this trend continues into 2024, Amazon stock can continue to reward long-term investors.
Moody’s (MCO)
Moody’s (NYSE:MCO) is a global risk assessment firm that helps corporations make better decisions. Also, the company offers lending, underwriting, investment research, portfolio management, and other financial services.
Moody’s trades at a 35-forward P/E ratio while delivering healthy financial growth. The firm reported 15% YOY revenue growth and 28% YOY revenue growth in the third quarter of 2023. Those growth rates helped the company achieve a 26.4% net profit margin.
Further, Moody’s stock offers a 0.75% dividend yield and tends to raise its dividend payouts by at least 10% per year. While the equity’s dividend growth is good, the real reward has been the appreciation. Shares are up by 27% over the past year and have gained 148% over the past five years.
The financial firm is tapping into artificial intelligence through its Moody’s Research Assistant GenAI tool. This search and analytical tool can increase retention and encourage other corporations to work with Moody’s. Therefore, it makes valuable information and data points more accessible to its customers.
On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
