BAC

Bank of America Corporation

31.73
USD
-2.37%
31.73
USD
-2.37%
29.67 50.11
52 weeks
52 weeks

Mkt Cap 261.50B

Shares Out 8.24B

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Got $1,000? 5 Buffett Stocks to Buy and Hold Forever

Warren Buffett's Berkshire Hathaway portfolio has drawn attention for decades. Its 20% average annual return since 1965 doubled the performance of the S&P 500. Despite that performance, not all of the stocks Buffett owns are buys today. Nonetheless, Buffett and his team continue to add stocks. To that end, investors should pay particular attention to five of Buffett's key additions in recent years, all of which are affordable within a $1,000 budget. Apple Apple (NASDAQ: AAPL) has become one of the most recognizable brands in the world. Its iPhones, Mac computers, and wearables have become highly desired by consumers, and Buffett came to appreciate the value of these offerings over time. Consequently, it has served both Apple and Berkshire investors so well that it has outperformed the S&P 500 at a time when many tech stocks fell by more than 75%. Despite its $2.75 trillion market cap, Apple managed to achieve revenue growth in the high single digits in a slowing economy. Moreover, its $191 billion in liquidity gives it one of the most solid balance sheets among public companies. Given those attributes, it is little wonder that Apple stock constitutes more than 40% of Berkshire's portfolio. Snowflake Snowflake (NYSE: SNOW) is a fast-growing software stock that stands in contrast to Buffett's more notable investments. It is a high-growth, money-losing stock, having lost $166 million in its fiscal first quarter of 2023 alone. Also, the price-to-sales (P/S) ratio of 36 is outlandish by Buffett's standards and would be much higher were it not for the 40% stock price decline over the last year. However, its position as the leading data cloud provider could make it the kind of essential offering that Buffett typically likes to see in a company. Moreover, its customer count of 6,300 indicates it has barely scratched the surface of its potential. Between its 40% customer growth year over year and the 74% increase in customer spending over the last year, Snowflake is on track to more than justify its high cost. Chevron Despite an increased focus on clean energy, oil and natural gas make up 68% of U.S. energy use. This benefits Chevron (NYSE: CVX), which derives over 99% of its revenue from these energy sources. Its business is so profitable that it reported $16.7 billion in free cash flow in the first half of 2022. That cash flow funds a rising dividend stream, a factor that likely attracted Buffett. Its $5.68 per share annual dividend yields 3.6% and has risen for 35 consecutive years. And at a dividend cost of $5.5 billion in the first half of the year, cash flows should support further increases. Moreover, with a P/E ratio of just 11, income investors may want to consider following Buffett's lead. Bank of America Buffett's interest in banks is not new. However, the size of his Bank of America (NYSE: BAC) position has grown steadily in recent years. At 10%, it is Berkshire's second-largest position next to Apple. It is also a megabank that has aggressively adopted fintech solutions. CEO Brian Moynihan told Yahoo! Finance last year that the company spends about $3.5 billion per year on technology-driven products and services. Additionally, the company pays an annual dividend of $0.88 per share, good for a yield of about 2.4%. Its annual payout has risen every year since 2014. Since the cost of this dividend claimed $4.2 billion of its $13.3 billion in net income over the first half of 2022, the payout should easily sustain itself. At 11 times earnings, investors can buy that income stream at a low price. Amazon Despite sluggish e-commerce growth, Amazon (NASDAQ: AMZN) is one Buffett stock investors may want to buy and hold forever. Its cloud segment, AWS, has driven all of the company's operating income this year even though it makes up only 16% of revenue in the first half of 2022. Moreover, its digital advertising segment continues to grow revenue at double-digit rates. Still, this potential does not necessarily mean it has been one of Buffett's better-performing investments in recent months. Amazon has fallen by 13% over the last year, and its 127 P/E ratio is hardly cheap. However, Buffett probably likes AWS' trailing 12-month operating margin of 31%, a stark contrast to the negative margins of its retail segments. According to Grand View Research, cloud infrastructure is expected to grow at a compound annual growth rate of 16% through 2030, a factor that should keep Amazon growing even if e-commerce recovers slowly. Find out why Apple is one of the 10 best stocks to buy now Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed their ten top stock picks for investors to buy right now. Apple is on the list -- but there are nine others you may be overlooking. *Stock Advisor returns as of August 11, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Will Healy has positions in Berkshire Hathaway (B shares). The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), and Snowflake Inc. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Today’s Big Picture Asia-Pacific equity indexes ended today’s session down across the board. India’s Sensex ended the day essentially flat, down 0.06%, China’s Shanghai Composite and Australia’s ASX All Ordinaries declined 0.54% and 0.55%, respectively while Japan’s Nikkei fell 0.65%, Taiwan’s TAIEX dropped 0.74% and South Korea’s KOSPI declined 0.90%. Hong Kong’s Hang Seng led the way, down 1.96% on a broad selloff led by Health Technology and Health Services names while Transportation and Communications sectors provided the only relief. By mid-day trading, major European equity indices are down across the board and U.S. futures point to a positive open later this morning. At 8:30 AM ET, the much anticipated July Consumer Price Index (CPI) report was released: The headline figure for the month was expected to fall to 8.7% from June’s blistering 9.1% reading with core CPI that excludes food and energy ticking higher to 6.1% in July vs. 6.0% the prior month. The actual numbers show that inflation hit 8.5%, and core inflation was 5.9%. With the national average retail price for a gallon of gas falling through late June and July from its June 14 high of $5.016 per gallon per data from AAA, forecasters had expected the month over month decline in the headline CPI for July. The July Employment Report also showed wage inflation ran hotter than expected during the month. Let’s also keep in mind that we will be facing a “wash, rinse, repeat” cycle when it comes to inflation data and expectations for the Fed given tomorrow’s July Producer Price Index report. Data Download International Economy Producer prices in Japan rose by 8.6% YoY in July, compared with market forecasts of 8.4% and following an upwardly revised 9.4% the prior month. While marking the 17th straight month of producer inflation, the latest reading was the softest since last December. China's annual inflation rate rose to 2.7% in July from 2.5% in June and compared with market forecasts of 2.9% but even so the July figure marked the highest reading in the last year. The country’s Producer Price Inflation figure for July eased to a 17-month low of 4.2% YoY from 6.1% the prior month and less than the market consensus of 4.8%. Annual inflation rate in Germany was confirmed at 7.5% YoY for the month of July, down slightly from June’s 7.6% reading but still above the March and April figures of 7.3%-7.4%. The annual inflation rate in Italy slowed to 7.9% YoY in July from June’s 8% reading matching expectations for the month. While energy prices declined, prices for food and transportation rose at a faster pace. Domestic Economy This morning we have the usual Wednesday weekly reports for MBA Mortgage Applications and Crude Oil Inventories from the U.S. Energy Information Administration. At 10 AM ET, Wholesale Inventories for June will be published, and the figure is expected to rise 1.9%. While investors and economists will keep more than a passing interest in those reports and data, as we discussed above, it will be the July Consumer Price Index report at 8:30 AM ET that will shape not only how the US stock market opens today, but also expectations for the Fed’s next course of monetary policy action. The U.S. Energy Information Administration (EIA) expects domestic production of crude oil, natural gas and coal will all increase next year compared with this year. It forecast US crude production rising 6.7% to an all-time annual high 12.7M bbl/day in 2023 from 11.9M bbl/day in 2022, US natural gas output climbing to 100B cubic feet (cf)/day from 97B cf/day, and US coal production inching up to 601M short tons in 2023 from an expected 599M this year. The EIA also modestly increased its 2022 average nationwide gasoline price forecast to $4.07/GALLON vs. $4.05 if called for last month. It now also sees 2023 prices at $3.59/GAL vs. its previous forecast of $3.57. Markets Stocks continued in their holding pattern waiting for the latest CPI print save for some fundamental stories pushing Technology names and small caps around. The Dow and the S&P 500 were down slightly at 0.18% and 0.42%, respectively while the Nasdaq Composite dropped 1.19% and the Russell 2000 closed down 1.46% on the day. Energy names led the way yesterday but were overpowered by Technology and Consumer Discretionary sectors. Here’s how the major market indicators stack up year-to-date: Dow Jones Industrial Average: -9.81% S&P 500: -13.51% Nasdaq Composite: -20.14% Russell 2000: -15.83% Bitcoin (BTC-USD): -52.08% Ether (ETH-USD): -55.38% Stocks to Watch Before trading kicks off, CyberArk (CYBR), Fox Corp. (FOXA), Jack in the Box (JACK), Nomad Foods (NOMD), Vita Coco (COCO), Tufin Software (TUFN), and Wendy’s (WEN) will be among the companies issuing their latest quarterly results and guidance. At 9 AM ET, Samsung (SSNLF) will hold its Galaxy Unpacked 2022 at which it is expected to introduce new Galaxy foldable smartphone models, a new Galaxy Watch, and Galaxy Buds. Shares of advertising technology platform company The Trade Desk (TTD) jumped after the company reported quarterly results that topped expectations and guided current quarter revenue above the consensus forecast. The RealReal (REAL) reported a smaller than expected bottom line loss for its June quarter as revenue for the period rose 47.2% YoY to %154.44 million, topping the $153.99 million consensus. However, the company issued downside guidance for both the current quarter and 2022. Revenue for the September quarter is now expected to be $145-$155 million vs. the $164.3 million consensus; for the full year of 2022, revenue is forecasted to be $615-$635 million vs. the $653.7 million consensus. Shares of Coinbase Global (COIN) moved lower after it reported June quarter results that missed top and bottom line expectations. Revenue for the quarter fell 63.7% YoY as Total trading volume fell 53.0% YoY and 29.8% sequentially to $217 billion. Monthly Transacting Users (MTUs) grew 2.3% YoY but fell 2.2% sequentially to 9.0 million. For the current quarter, Coinbase sees the number of MTUs trending lower sequentially and total trading volume to be lower compared to the June quarter. Shares of Sweetgreen (SG) tumbled in aftermarket trading last night after the company missed quarterly revenue expectations, lowered its 2022 forecast, announced it will lay off 5% of its workforce, and downsize to smaller offices. ChipMOS TECHNOLOGIES (IMOS) reported its July revenue was $65.1 million, a decrease of 19.4% YoY and down 7.7% MoM. Taiwan Semiconductor (TSM) reported its July revenue increased 49.9% YoY to NT$186.76 billion, which equates to a 6.2% MoM improvement. Electric vehicle subscription startup Autonomy placed a $1.2 billion order for 23K electric vehicles with 17 global automakers, including BMW (BMWYY), Canoo (GOEV), Fisker (FSR), Ford (F), General Motors (GM), Hyundai (HYMTF), Lucid Group (LCID), Mercedes-Benz (DDAIF), Polestar (PSNY), Rivian (RIVN), Stellantis (STLA), Subaru (FUJHY), Tesla (TSLA), Toyota Motor (TM), VinFast, Volvo Car (VLVOF) and Volkswagen (VLKAF). IPOs As of now, no IPOs are slated to be priced this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page. After Today’s Market Close Bumble (BMBL), CACI International (CACI), Coherent (COHR), Dutch Bros. (BROS), Red Robin Gourmet (RRGB), and Walt Disney (DIS) are expected to report their quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. On the Horizon Thursday, August 11 Germany: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August US: Weekly Initial & Continuing Jobless Claims US: Producer Price Index – July US: Weekly EIA Natural Gas Inventories Friday, August 12 Japan: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August China: China Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August Eurozone: Industrial Production - June US: Import/Export Prices – July US: University of Michigan Consumer Sentiment Index (Preliminary) – August Thought for the Day “The release date is just one day, but the record is forever.” ~ Bruce Springsteen Disclosures Tufin Software (TUFN), CyberArk (CYBR) are constituents of the Foxberry Tematica Research Cybersecurity & Data Privacy Index Canoo (GOEV), Fisker (FSR), Lucid Group (LCID), Rivian (RIVN), Tesla (TSLA), Vita Coco (COCO) are constituents of the Tematica BITA Cleaner Living Index Canoo (GOEV), Fisker (FSR), Lucid Group (LCID), Rivian (RIVN), Tesla (TSLA), Vita Coco (COCO) are constituents of the Tematica BITA Cleaner Living Sustainability Screened Index The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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