May 19, 2022

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Latest trading, investing, and financial news

Warren Buffett Stocks: Microsoft Among 29 Stocks On This Screen

Who joins Microsoft (MSFT) and Meta Platforms (FB) (formerly known as Facebook) on this list of Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO?


In addition to FB and MSFT stock, Boot Barn (BOOT) and steel stocks Nucor (NUE), Steel Dynamics (STLD) and Reliance Steel & Aluminum (RS) are among 29 names featured on this stock screen. Goldman Sachs (GS) has also bankrolled a spot on the list.

In addition to Boot Barn, fellow retailers Sprouts Farmers Market (SFM), Five Below (FIVE) and 1-800Flowers.com (FLWS) have secured space on the shelf.

Homebuilders Green Brick Partners (GRBK), Tri Pointe Homes (TPH) and Meritage Homes (MTH) join decking materials firm Trex (TREX) on the list.

While tech stocks have been slammed in this market correction, Monolithic Power Systems (MPWR) and Epam Systems (EPAM) maintain placement on this screen for Warren Buffett stocks alongside Microsoft and Meta Platforms.

With their track records of sustainable growth, Microsoft and Monolithic Power Systems also earn a spot on IBD Long-Term Leaders, fitting many of the parameters of Warren Buffett stocks.

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 (BRKB).

Highlighting Warren Buffett Stocks

The list below highlights Warren Buffett stocks like Microsoft, Nucor and Steel Dynamics that are in sync with his focus on management quality and long-term growth.

Looking at the closely watched Berkshire Hathaway portfolio, Buffett and his team have exited drugmaker Merck (MRK) and slashed holdings in AbbVie (ABBV) and Bristol Myers Squibb (BMY).

In Q4, Berkshire Hathaway bought shares in video game and esports leader Activision Blizzard (ATVI) for the first time.

Created in MarketSmith, the screen below emphasizes metrics to use 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 earnings growth.
  • 12% or better 5-year average return on equity.

Build Your Watchlist With The IBD Stock Screener

Warren Buffett Stocks: MarketSmith Screen

Screen created using MarketSmith | Data as of May 12, 2022

Company Symbol Sustainable Growth % ROE 5-Yr Avg Comp Rating EPS Rating RS Rating SMR Rating
Quidel QDEL 47 40.3 67 92 40 A
MarineMax HZO 30 19 77 98 45 B
Boot Barn BOOT 38 23.7 81 99 78 A
Daqo New Energy DQ 52 17 71 98 28 A
Meritage Homes MTH 27 17.9 70 99 33 A
One-800Flowers.com FLWS 27 18.2 25 60 11 C
Atlas Air Worldwide AAWW 22 14.4 78 95 60 A
Green Brick Partners GRBK 25 16.6 83 99 55 A
West Pharmaceutical Svcs WST 29 20.6 65 94 32 A
Nucor NUE 51 25.4 96 97 93 A
Steel Dynamics STLD 59 30.3 98 98 95 A
Tri Pointe Homes TPH 20 14.4 71 95 40 B
Copart CPRT 30 28.2 85 98 40 A
Reliance Steel & Aluminum RS 22 15.5 97 98 94 A
Service Corp Intl SCI 34 29.5 91 83 91 A
Winnebago Industries WGO 30 22.9 72 96 33 A
Houlihan Lokey HLI 20 28.3 79 99 51 A
Quest Diagnostics DGX 23 21.8 78 70 73 B
Epam Systems EPAM 24 20 77 98 19 A
Evercore EVR 56 51.2 65 91 36 A
Goldman Sachs GS 18 14.1 51 63 39 B
Monolithic Power Systems MPWR 23 25.8 93 98 69 A
Trex TREX 38 34.2 64 98 17 A
Meta Platforms FB 31 25.2 46 73 25 B
Danaher DHR 16 13 83 89 45 A
Five Below FIVE 28 19.7 73 89 29 A
Microsoft MSFT 34 43.1 76 93 60 A
Sprouts Farmers Market SFM 27 27 82 81 67 D
Ii-Vi IIVI 17 15.2 84 80 78 B

Rating Potential Oracle Of Omaha Stocks

While using different criteria than that used for this list of Warren Buffett stocks, Steel Dynamics, for example, scores a 98 Composite Rating, while Nucor earns a 96. Monolithic Power Systems’ 93 rating means it is outpacing 93% of all companies in terms of key stock-picking traits.

After plummeting earlier this month on earnings, FB stock has seen its Composite Rating in Stock Checkup fall to 46.

Including FB stock, many companies on the list do meet typical Warren Buffett criteria, but do not meet some 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.


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