Warren Buffett Stocks: Alibaba, Teradyne Among 10 Stocks On This Screen

By MATTHEW GALGANI

Who joins BABA stock this list of Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO?

In addition to Alibaba, Sprouts Farmers Market, Teradyne, Hibbett and D.R. Horton are also among 10 stocks on picked up on this stock screen.

IBD Long-Term Leader Cadence Design Systems also makes this list of stocks with a track record of sustainable growth.

Since the Oracle of Omaha has never written a book detailing his investment strategy, there's no definitive buying checklist. But parts of his stock-picking strategy can be gleaned from the annual reports of Berkshire Hathaway.

Highlighting Warren Buffett Stocks

The list below highlights Warren Buffett stocks like BABA stock, Sprouts Farmers Market, Akamai, and Cadence Design Systems that are in sync with his focus on management quality and long-term growth.

Looking at the closely watched Berkshire Hathaway portfolio, Buffett and team have increased exposure to consumer stocks while reducing stocks in drug stocks like Merck and Bristol-Myers Squibb. Positions in Alibaba, Sprouts Farmers Market and 1-800-FLOWERS represent the consumer-focused holdings on this screen.

Showing stocks from a wide range of sectors, homebuilder D.R. Horton and semiconductor sector stock Teradyne also display characteristics of Warren Buffett stocks.

Created in MarketSmith, the screen below emphasizes metrics when looking for companies with long-term past and potential future growth. To make the list, each stock must meet a wide range of criteria, including:

  • Top 25% of all stocks in terms of five-year annual EPS growth rate.
  • 15% or greater sustainable growth.
  • 12% or better 5-year average return on equity.

Pinpoint Top Growth Stocks With The Screen Of The Day

Warren Buffett Stocks: MarketSmith Screen

Screen created using MarketSmith | Data as of Oct. 11, 2021

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Teradyne Inc TER 40 31.2 58 89 22 A
Sprouts Farmers Market SFM 37 26.8 52 74 23 C
Cadence Design Systems CDNS 34 34.9 88 93 74 A
Hibbett Inc HIBB 30 17.4 83 78 63 A
One-800Flowers.com Cl A FLWS 27 17.1 58 80 48 B
Akamai Technologies Inc AKAM 22 18.7 59 76 21 A
Alibaba Group Hldg Ads BABA 21 18.8 45 92 8 A
Perficient Inc PRFT 21 16.8 99 93 98 A
Ciena Corporation CIEN 20 15.3 47 61 36 C
D R Horton Inc DHI 19 18.5 67 98 45 A

Rating Potential Oracle Of Omaha Stocks

While using different criteria than that used for this list of Warren Buffett stocks, global IT consulting firm Perficient, for example, earns the highest-possible 99 Composite Rating. As a result of its recent pullback, Cadence Design Systems now has ann 88 Composite Rating, below a passing score of 95 in Stock Checkup.

Others do meet typical Warren Buffett criteria, but do not meet some certain benchmarks CAN SLIM investors typically look for in the other IBD SmartSelect Ratings that gauge a company's fundamental, as well as technical, strength.

Ranging from 1 (worst) to 99 (best), the Composite Rating reveals how strongly a company is showing the seven telltale traits of winning stocks. For example, a rating of 95 means the company is outperforming 95% of all other stocks in terms of the most important fundamental and technical stock-picking criteria.

The EPS Rating tracks a company's annual and quarterly earnings growth, then measures how its numbers stack up against those of all other stocks. So just like the Composite Rating, a score of 95 means the company's EPS growth is in the top 5% of all stocks.

Identifying stocks with strong fundamentals, the SMR Rating tracks sales growth, profit margins and return on equity as a whole. An A rating means the company is in the top 20% of all stocks in terms of those key fundamental performance metrics. Since it ties in with the legendary investor's focus on a company's fundamentals, this can be a particularly useful rating for investors looking for potential Warren Buffett stocks.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


What is inkl?

Important stories

See news based on value, not advertising potential. Get the latest news from around the world.

Trusted newsrooms

We bring you reliable news from the world’s most experienced journalists in the most trusted newsrooms.

Ad-free reading

Read without interruptions, distractions or intrusions of privacy.