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Warren Buffett's Best Tips from the 2024 Berkshire Annual Meeting

  • (0:30) - Breaking Down The Berkshire Hathaway Annual Meeting

  • (5:30) - Top Takeaways From Warren Buffett

  • (17:10) - Stocks To Keep On Your Watchlist: Invest Like Buffett

  • (34:00) - Episode Roundup: GOOGL, SONY, UNP, V, MA

  • Podcast@Zacks.com

 

Welcome to Episode #369 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

93-year-old Warren Buffett hosted another Berkshire Hathaway annual meeting on May 4, 2024 in Omaha. It is the biggest annual gathering of value investors in the world.

Thankfully, if you aren’t a Berkshire Hathaway shareholder, you can now watch the event “live” on CNBC. CNBC also does interviews with some of the Berkshire Hathaway company CEOs during the lunch break.

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It’s a multi-hour question and answer session with Berkshire shareholders. And even though this year was a tribute to Buffett’s right-hand-man, Charlie Munger, who passed away in 2023 at the age of 99, there was still plenty of Buffett’s typical folksy advice.

He always makes investing seem so easy to navigate.

The Best Tips from the Annual Meeting

Some of Buffett’s most interesting comments at the meeting don’t always have to do with investing. Many are just about life. Here are some of the notes Tracey scribbled while watching the Q&A.

These are three of the best tips.

1.       Compounding is one of the most important factors in investing.

2.       Read top books, like Ben Graham’s the Intelligent Investor, several times.

3.       The deficit is not keeping him up at night.

5 Stocks That are Berkshire Hathaway Approved

Berkshire was sitting on $182 billion in cash as of the annual meeting. What stocks are Buffett-like that he could buy, or buy more, of?

1.       Alphabet Inc. (GOOGL)

Alphabet fits the mold of a Berkshire stock. It has moats and plenty of free cash flow. Alphabet had $108.1 billion in cash as of Mar 31, 2024.

Shares of Alphabet are near all-time highs, up 24.4% year-to-date. But it’s actually cheap on a historic basis and compared to the other Magnificent 7 stocks.

Alphabet trades with a forward P/E of 22.8. It has a PEG ratio of just 1.3. A PEG under 1.0 usually indicates both value and growth. But 1.3 is still low.

Will Berkshire Hathaway eventually buy shares of Alphabet?

2.       Sony Group Corp. (SONY)

Sony is a global powerhouse in gaming, cameras, chips, entertainment, and music. It has plenty of moats. In May 2024, Sony announced it was raising its dividend and would target a 40% total payout ratio by the end of Fiscal 2027.

Shares of Sony are down 11.9% year-to-date. It’s cheap on P/E and P/B ratio levels. Sony’s forward P/E is just 14.5, which puts it as a value stock. It has a P/B ratio of only 2.0. A P/B ratio under 3.0 usually indicates value.

Berkshire owns other Japanese companies. Will Sony be next?

3.       Union Pacific Corp. (UNP)

Berkshire Hathaway owns one of the largest railroads in America with BNSF. But Buffett talked about how Berkshire almost bought Union Pacific instead. Union Pacific has paid a dividend for 125 consecutive years. That’s impressive.

Shares of Union Pacific are up just 0.1% year-to-date. But earnings are expected to rise 7.6% this year. Union Pacific has a forward P/E of 21.9.

If you want to own a railroad, Union Pacific is one to keep on your short list.

4.       Visa Inc. (V)

Berkshire Hathaway has owned shares of Visa since the third quarter of 2011. Visa is an earnings all-star. It hasn’t missed since it went IPO in 2008. Earnings are expected to rise 13.3% in fiscal 2024.

Shares of Visa are up just 7.5% year-to-date. It trades with a forward P/E of 28.3.

Should value investors still be buying Visa in 2024?

5.       Mastercard Inc. (MA)

Berkshire Hathaway also owns shares of Mastercard, which it bought before Visa, in the first quarter of 2011. Mastercard also has an outstanding earnings surprise track record with just 2 misses in the last 10 years.

Shares of Mastercard are up 7.6% year-to-date. It trades with a forward P/E of 32.2, which is well above the classic “value” P/E level of 15.

Is it too late for value investors to buy Mastercard?

What Other Tidbits of Wisdom Did Buffett Drop at the Berkshire Annual Meeting?  

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of GOOGL in her personal portfolio.]

 

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Mastercard Incorporated (MA) : Free Stock Analysis Report

Visa Inc. (V) : Free Stock Analysis Report

Union Pacific Corporation (UNP) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

Sony Corporation (SONY) : Free Stock Analysis Report

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