Warren Buffett Stocks: GOOGL Among 41 Names on This Screen

Long-term leader of IBD cadence design systems (CDNS) and Monolithic power systems (MPWR) join parent Google Alphabet (GOOGL) on this stock screen by Warren Buffett, based on the Berkshire Hathaway CEO’s investment strategy.


Highlight for Warren Buffett’s stocks

Including GOOGL, CDNS and MPWR stocks, 41 companies make this stock screen.

building materials manufacturer Atkore (ATKR) tops the list with an impressive 90% sustainable earnings growth rate. (The rate is calculated by multiplying the company’s ROE by the earnings retention ratio, which is the percentage of earnings not distributed as dividends.)

Meanwhile, including Atkore, FirstSource Builders (BLDR) and Steel Dynamics (STLD), five companies on this screen had sustainable growth rates above 50%. Pool (POOL) and solar energy game daqo new energy (DQ) has also earned this distinction.

nucor (NUE) loses that distinction with a sustainable growth rate of 44%. Reliance Steel (RS) (25%) and Brazilian steel producer Gerdau (GGB) (17%) also do this screening of Warren Buffett’s stock.

retail stocks Lululemon Athletica (LULU), boot barn (BOOT) and Buckle (BKE) also do the cutting.

Led by DR Horton (DHI), home builders made a strong presence on this screen. SkipGroup (PHM), Lennar (LEN), Meritage Homes (MT) and Tri Pointe Residences (TPH) are also on the list.

GOOGL joins tech names among Warren Buffett stocks

Since the Oracle of Omaha has never written a book detailing its investment strategy, there is no definitive buying checklist. But parts of Buffett’s stock-picking strategy can be deduced from the company’s annual reports. Berkshire Hathaway (BRKB).

The list below highlights Warren Buffett’s actions such as Alphabet, Cadence Design Systems and Monolithic Power Systems in sync with Buffett’s focus on quality management and long-term growth.

In addition, reflecting the improvement in the technology sector after last year’s bear market hit, the display also features several other technology names. Warren Buffett’s latest stock list also includes STMicroelectronics (STM), PTC (PTC), Epam systems (EPAM) and Chinese online gaming platform NetEase (NTES).

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

  • In the top 25% of all stocks in terms of five-year annual EPS growth rate.
  • 15% or more sustainable earnings growth.
  • 12% or better return on average five-year equity.

Create your watchlist with IBD Stock Screener

Warren Buffett Stocks: MarketSmith Screen

Canvas created using MarketSmith March 17 data

Company Symbol % sustainable growth 5 year average ROE Compensation Assessment EPS Rating RS Rating SMR Rating
Atkore ATKR 90 72.1 95 92 95 A
FirstSource Builders BLDR 63 45.1 96 97 95 A
daqo new energy QD 62 22.6 87 99 63 A
Steel Dynamics STLD 54 38.4 93 81 93 B
Pool POOL 50 60.4 80 86 67 B
nucor NUE 44 31.9 89 67 90 B
cadence design systems CDNS 43 36.1 98 97 95 A
Clearfield CLFD 39 22.6 44 99 8 A
boot barn BOOT 38 26.4 86 76 85 B
Lululemon Athletica LULU 38 36.9 88 97 42 A
winnebago industries WGO 36 26.6 89 80 81 B
Old Dominion Shipping Line ODFL 34 28.3 97 97 92 A
STMicroelectronics MTS 34 17.4 98 98 95 A
Commercial Metals CMC 33 23.7 93 99 84 A
DR Horton DHI 32 25.8 95 91 94 B
Monolithic power systems MPWR 30 29.3 99 99 93 A
SkipGroup PHM 30 21.4 98 99 95 A
evercore EVR 28 45.7 87 57 89 W
Meritage Homes MTH 28 21 99 97 95 A
UFP packaging UFPI 28 22.4 80 92 75 B
Skirt SKIRT 26 18.7 97 91 94 A
PTC PTC 25 22.6 90 93 80 A
Regeneron Pharmaceutical REGIME 25 35 86 66 87 B
Reliance Steel and Aluminum LOL 25 19.6 90 81 95 B
super microcomputer SMCI 25 23.4 99 99 98 A
Epam systems EPAM 24 20.5 59 95 25 A
Alphabet GOOGL 24 22 68 73 54 B
West Pharmaceutical Services WST 24 22.5 92 83 92 B
perion nets PERI 23 15.7 98 98 98 A
Shutterstock SSTK 23 25.5 94 97 93 A
west lake WLK 23 17.4 63 50 71 B
Tri Pointe Residences TPH 22 16.7 98 97 95 B
Lennar LEN 21 17.3 96 87 94 B
NetEase NTES 21 21.7 82 89 81 B
newt international TRTN 18 19.4 86 90 58 A
Gerdau GGB 17 15.7 82 80 58 B
How much Services PWR 17 14.5 91 94 91 B
Buckle BKE 16 53.3 91 83 80 A
Danaher DHR 16 14.7 58 89 36 B
global GLOB 15 14.4 66 98 17 A
Laboratory Corp. of America LE 15 21.3 40 63 39 W

Warren Buffett’s stocks in demand by top funds

The latest list of new buys from the best mutual funds features several names also highlighted in this Warren Buffett stock screen.

On the technology side, Cadence Design Systems, Monolithic Power Systems and STMicroelectronics make both lists.

Also, from the construction sector, Atkore, Builders FirstSource, Meritage Homes and PulteGroup make the cut.

IBD vs. The Oracle of Omaha

IBD uses different criteria than those used for this list of Warren Buffett stocks. MPWR and SMCI, for example, score the highest possible composite rating of 99. The ranking means the stock is outperforming 99% of all companies in terms of key stock-picking characteristics. Cadence Design Systems obtains a score of 98 in the IBD Stock Checkup.

As GOOGL shares continue to rally after all the carnage in the tech sector last year, its composite ranking has improved to 68.

Including Alphabet, many companies on the list meet Warren Buffett’s typical criteria, but they don’t meet some benchmarks that CAN SLIM investors look for in other stock rankings that measure a company’s fundamental and technical strength.

Ranging from 1 (worst) to 99 (best), the composite score reveals how well a company is showing the seven telltale characteristics 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 selection criteria.

The EPS rating tracks a company’s annual and quarterly earnings growth, then measures how its numbers stack up against all other stocks. Like the composite score, a score of 95 means that the company’s EPS growth is in the top 5% of all stocks.

Similarly, by identifying stocks with strong fundamentals, the SMR Rating tracks sales growth, profit margins and overall return on equity. An A rating means that the company is in the top 20% of all stocks in terms of these key fundamental performance metrics. As it relates to the legendary investor’s focus on a company’s fundamentals, this could be a particularly useful rating for investors looking for potential Warren Buffett stocks.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


Semiconductor stocks trigger breakouts and buy zones

GOOGL’s 37% Growth Off Flat Base Brings This Lesson On Growth Stocks

Top funds pour billions into these five sectors

Navigate Bull and Bear Markets with This Simple Routine

Identify bases and buy points with this pattern recognition tool

Leave a Reply

Your email address will not be published. Required fields are marked *